Municipal Accounting Research Articles

The Municipal Accountability in Service Delivery: Featherbrooke Homeowners Association v Mogale City Local Municipality

In the case of Featherbrooke Homeowners Association NPC v Mogale City Local Municipality the Johannesburg High Court presided over a matter which considered the role of municipal accountability in stormwater management. Schedule 4B of the Constitution of the Republic of South Africa, 1996 provides for basic municipal services such as stormwater management. Schedule 4B outlines other functional areas linked to promoting the right to an environment that is not harmful to one's well-being. These constitutional rights are often infringed upon, and the courts must decide to what extent local government is responsible for the alleged infringements. The courts must further decide to what extent local government accountability can be enforced through structural interdicts. This note contemplates the role of municipal accountability and responsibility in the pursuit of adequate service delivery in urban areas. It highlights the role of legislative interpretation in constitutional matters that relate to government accountability and overlapping mandates. It argues that state entities often shift the blame for their responsibilities. Furthermore, it evaluates the challenges of enforcing municipal accountability in service delivery and argues that public participation plays a key role in holding local government accountable for the delivery of such services.

Examining the effectiveness of the existing safety and crime prevention mechanism in Mopani district municipality, South Africa

Crime prevention has been recognised as one of the key national priorities in South Africa since the establishment of the National Crime Prevention Strategy (NCPS) in 1996. It is viewed to be the responsibility and duty of the South African Police Service (SAPS); however, with a range of crimes, caused by different factors, it is impossible to rely exclusively on the police to prevent crime. Thus, various stakeholders, such as businesses, communities, Non-Government Organisations, civil society, law enforcement and Municipalities, need to take a stand in maintaining peace and ensuring safety for law-abiding citizens within their municipal boundaries. This article examines the effectiveness of the existing mechanisms in ensuring safety in Mopani District Municipality (MDM). The Constitution mandates municipalities to take a lead in crime prevention to increasing people's feelings of safety and building safer communities. Using a qualitative research approach, a purposive sampling was used to select four municipal officials. The face-to-face interviews were conducted in Letaba local municipality, Greater Tzaneen local municipality, Ba-Phalaborwa local municipality and Maruleng local municipality. Data was analysed through thematic analysis. The results revealed that most local municipalities are involved in crime prevention through the establishment of the Community Safety Forums (CSF) who participate in tourism safety, school safety, road, social crime prevention and health safety. The findings revealed lack of resources, funding (Budget), political instability, lack of knowledge, training and experience as some of the major challenges hindering the effectiveness of local government involvement in crime prevention. The study recommends the establishment of a safety section in a municipality, professionalization of the crime prevention space, exploring other avenue for funding and municipal accountability to address safety issues

The effectiveness of Section 139 interventions in strengthening municipal accountability in South Africa

Background: Section 139 interventions invoked against failing municipalities in South Africa are becoming prevalent and causing considerable apprehension among stakeholders in local government. Though previous studies have highlighted that Section 139 interventions have generally failed to address governance challenges in municipalities, their effectiveness in strengthening municipal financial accountability has not been examined.Aim: This article investigates the effectiveness of Section 139 interventions in strengthening municipal financial accountability architecture.Methods: This article utilised qualitative document analysis to assess the effectiveness of a Section 139 intervention in strengthening municipal financial accountability. Furthermore, the study utilised audit outcomes as qualitative proxy indicators to assess the effectiveness of Section 139 interventions to strengthen municipal financial accountability. The study focussed on municipalities from Limpopo, North West, and the Free State that have been placed under Section 139 intervention.Results: The findings from the analysis of data showed that a year after interventions, municipalities from Limpopo achieved a notable improvement in their audit outcomes, while municipalities from North West and the Free State did not improve. Though there was a notable improvement from municipalities in Limpopo, the improvement did not result in clean audit outcomes.Conclusion: The poor audit outcomes are indicators that Section 139 interventions are ineffective in strengthening municipal financial accountability.Contribution: This article contributes towards the debates and potential measures to strengthen Section 139 interventions to address the accountability challenges in South African municipalities.

Los contadores municipales en la Corona de Castilla (siglos XIV-XVIII)

Este trabajo pretende abordar el estudio, desde planteamientos cercanos a la historia de las instituciones, de uno de los oficiales municipales más desconocidos. Nos referimos al contador, que se encargó del control y fiscalización de los ingresos y gastos en los principales ayuntamientos españoles desde la Baja Edad Media hasta bien entrado el siglo XIX. Una vez analizado su origen, relacionado con la creación de la Contaduría de Cuentas de la Real Hacienda a mediados del siglo XIV, y con la necesidad de fiscalizar las cuentas presentadas por los mayordomos y recaudadores, se aborda su presencia y evolución a lo largo de todo el Antiguo Régimen en algunas de las más importantes ciudades castellanas, caso de Sevilla, Córdoba, Jaén, Murcia, Madrid o Toledo, y en las de la corona aragonesa, estableciendo las diferencias y similitudes entre los contadores castellanos y los racionales, oidores de cuentas y otros oficiales de esa Corona. Para ello se utiliza básicamente la bibliografía específica aparecida en los últimos años sobre las haciendas municipales en España en ese período, completando esta visión de conjunto con el examen del contenido de las ordenanzas y ordenaciones municipales aprobadas en la época, que han sido muy poco utilizadas hasta ahora para planteamientos metodológicos como el perseguido en este estudio. Una vez realizada esa visión general, se analizan algunas características esenciales que configuran el oficio de contador municipal. En concreto nos detenemos en el tiempo que desempeñaban ese oficio, en el sistema de nombramiento, en el juramento realizado al tomar posesión, en su número, en su salario, en las cualidades exigidas para ser contador, y en sus funciones. Entre éstas últimas se encontrarían el examen de las cuentas municipales, el registro de las libranzas y el control de los ingresos. Estas funciones básicamente son las que actualmente desempeñan los interventores de la Administración Local. Pero en los cinco siglos anteriores pocos ayuntamientos, como Toledo, llegaron a disponer en sus plantillas de contadores profesionales que ejercieran su cargo de por vida y con salarios dignos, siendo lo habitual que este oficio fuera uno más de los sorteados cada año entre los regidores municipales, que limitaban sus funciones al examen de las cuentas presentadas por los mayordomos y administradores durante uno o varios días al año, careciendo por lo general de preparación específica.

Municipal accounting reform in Portugal by Costa Cabral and its impact in the 19th Century (1842-1900)

This study aims to understand the importance and scope of the municipal accounting reform developed from 1842 to 1849 by Costa Cabral, Portuguese Minister of the Kingdom (1842-1846, 1849-1851) and Prime Minister (1849-1851), analysing its content, effective application, the impact it had on Portuguese municipal accounting and how it contributed to a greater link between the local government and the central government. To this end, we present a brief analysis of the economic, social and political context of the 1840s and the transformations then operated at the administrative and fiscal level with an impact on municipal accounting; the literature review regarding municipal accounting, especially from the 19th century; the historical sources used and the methodology adopted; the nature of Costa Cabral's 1849 Instructions on municipal accounting, its application and importance, seeking to detect changes and the factors behind them. We conclude that the Portuguese State, by defining the regulation for itself and for the organizations that depended on it, intervened, innovated and disseminated the accounting transformations carried out with the 1849 Instructions, seeking to integrate municipalities into the national accounting system as a whole, in a clear exercise of power, in a political context of legal imposition and lack of revenues, but also within a cultural and technical context of modernization, rationality and efficiency of municipal services. Submitting municipalities to common procedures and practices, as well as to the same obligations, is a remarkable achievement.

Financial Accountability Framework for Local Municipalities in the North West Province

Achieving a clean audit report has been almost impossible for the local municipalities of the North West province due to mismanagement of financial resources by the municipal role-players. In this regard, this study was aimed at exploring the key enablers to achieve financial accountability as well as propose a framework for financial accountability. The Stewardship Theory underpinned this study which emphasises the need for public servants to serve their employers with utmost truthfulness. The social constructivist research paradigm and a qualitative research approach was adopted. An exploratory research design was applied and a semi-structured interviews was used as a data collection method. A total of thirty six participants participated in the study. At the end of data collection, Atlas-ti software (version 8.2) was used to analyse data. Themes and categories were presented using Atlas-ti network diagram and these were well interpreted and discussed. Findings obtained from the study indicated that the key enablers of municipal financial accountability include the facilitation of policies and legislation, the facilitation oversight functions of the Municipal Public Accounts Committee, risk management, benchmarking, internal control, and financial management. These factors were investigated in the empirical study and it was discovered that all are key enablers towards achieving financial accountability except benchmarking which was regarded as a growth tool. Added to these factors are the contributions to the body of knowledge which include training of financial employees and the implementation of consequence management against role-players who do not abide with the financial policies and legislation of the municipalities. The study recommends above all, that the municipality role-players (financial employees) should be adequately trained to ensure competency, MPAC should effectively conduct their oversight duties and recommendations, also legal actions should be adequately taken on all culprits without fear or favour. This is in an endeavour to enhance financial accountability of local municipalities in the North West province.

Adoption the international accounting and financial reporting standards to the Measurement of Municipal Lands and their Reflection on the Financial Statements ( An applied Study in the Municipality of Najaf )

The research aimed to apply the international accounting and financial reporting standards to the measurement of municipal lands and its impact on the financial statements. The problem of the research is represented by the acquisition of land by the municipalities without cash payment, which led to the difficulty of knowing the real cost of land because of shortcomings of the municipal accounting system in dealing with this situation. The system did not include the accounting procedures for the lands' investment that meet the conditions of classification as investment properties. The research reached a number of conclusions, the most important of them is that the accounting measurement requirements for land under the accounting system differ from The special requirements for municipalities under international accounting and financial reporting standards, the most important research recommendations were including the need to update the accounting system based on the municipalities of international standards to keep abreast of developments and to provide financial information and reliable data in the internal and external environment.

Examining the relationships between revenues and their components and expenditures and their components using Markov-Switching regressions. Evidence from the municipality of Coimbra (1557–1836)

ABSTRACT The present work aims to evaluate quantitatively the relationships between revenues and their components and expenditures and their components in the Municipality of Coimbra during the Early Modern era (1557–1836), according to the revenue and expenditure books of the Municipality of Coimbra. To examine the proposed relationships, we apply the Markov-Switching regression techniques. It is shown that the Markov-Switching analysis allows a different perception of changing regimes in municipal accounting. The analysis reveals that most accounting components had a significant impact on revenues and expenditures in the short and long term. It is argued that the lack of technological innovation that occurred at the level of accounting recording technologies had no impact on the evolution of revenue, expenditure, and its components. Our empirical results are important to motivate the debate on accounting methods, highlighting the importance of long-term dynamic analysis as opposed to short-term static views.

Accrual Based Double Entry Accounting - A Revamp in the Financial Administration of Urban Local Bodies

The Cash Based Single Entry System of Accounting (CBSESA) was usedby Urban Local Bodies (ULBs), since their inception for the purpose of financial recording and reporting. Because of the system’s inherent limitations, ULBs have failed to fulfil financial responsibility, transparency requirements, tapping new avenues of finance and efficient financial administration. The 11th National Finance Commission has made its apprehension on the accounting system followed in Local Self Governments (LSGs) and strongly recommended for a change in the accounting system as a good governance initiative. Time has proven that accrual-based double entry system of accounting is the most scientific method for financial recording and reporting, and the same has been in practice in commercial entities since 15th century. Unfortunately, the socalled scientific system could not be brought about in Government accounting or LSG accounting till the end of 20th century. As the first leap the Government of India suggested to adopt Accrual Based Double Entry System of Accounting (ABDESA) in ULBs in 2004. The state of Kerala adopted Municipal Accounts Manual and ABDESA in selected ULBs from 1st April 2007 (G.O.MS/8/2007/LSGD). Since, accounting information is largely used by stake holders for different purposes including financial administration and decisions, quality of such decisions (based on the published financial statements) rests largely on the shoulder of quality of information. The present paper is a detailed analysis of the quality of financial statements generated under ABDESA by the ULBs of Kerala, based on the primary data collected from five Municipal Corporations and 40 Municipalities.

Improvement of the external municipal financial control system in the context of public authority reform

The subject. The implementation of external municipal financial control cannot be called fully competent in Russia. Many practical problems are currently being addressed mainly through the transfer of powers to implement external financial control to a higher level. Amendment to Art. 131–133 of the Russian Federation's Constitution in terms of clarifying the powers of local self-government and incorporating it into public authority, predetermines subsequent amendments to the legislation on local self-government, which can be aimed, among other things, at improving the system of external municipal financial control. The aim of the article is to confirm or disprove the following hypothesis. The reform of public authority will lead to a change in the system of external municipal financial control. Therefore it is possible to propose ways to improve the activities of municipal auditing and accounting authorities on the basis of constitutional novels and the analysis of the existing problems of implementing external municipal financial control. The methodology. The authors apply general scientific methods of comparative, logical and statistical research. The study is based on the analysis of academic literature, statistical data about the practice of the auditing and accounting bodies of municipalities. Russian judicial practice is also analyzed. The main results, scope of application. The organization of a modern system of external municipal financial control shows that it actually works only at the level of urban districts and municipal regions, and that is not always effective. Municipal control and accounting bodies are not created in settlements and the authority to exercise external financial control is transferred either to the level of the municipal district or to the level of the region of the Russian Federation. Conclusion. The municipal auditing and accounting body should retain the authority to exercise control without transferring it to the level of the constituent entity of the Russian Federation. However, at the same time, its role should be strengthened by increasing its status (for example, fixing at the federal level the criteria for the number of employees of the control and accounting body, financial support guarantees).

Local Government: Getting the South African Municipal Finances Right

Local government in South Africa from Musina to Cape Town have faced strategic financial management challenges of budget shortfalls, financial shambles and distress, leading to unmaintained infrastructure, deteriorating services quality, increasing municipal deprivation and intensifying social exclusion which is the unfortunate history of many municipalities. Municipal effective control leads to design, muster and fiscal wealth may accumulate effective approaches that accomplish its duty to be answerable to its inhabitants. Financial control and stewardship are preceded by the interconnected management facets towards augmenting the growing design, catalytic and hands-on route. Financial control is facilitated by effective reporting and auditing is chiefly paramount for accountability in the local government environment. Weak municipal management accountability and oversight institutions prevailing in local government compromise its integrity and a potential loss to the public’s confidence. Local government is confronted, by municipal fiscal administration morass and forgone fiscal reserves. The efficient budget implementation should conform to the will of the legislature’s authorizations. The financial position of municipalities in terms of the business model represents assets, liabilities and equity and displays the financial health at a specific time. The community and major stakeholders use financial statements to determine the financial position of any organization. The financial position and health determine how efficiently a municipality is expanding its resources and investment. This paper seeks to close the gap that other studies have not ventured to. This paper qualitatively and descriptively explores municipal financial management enigma and proposes a turnaround to get local government finances right

Analysis of digitalization of municipal property accounting

Analysis of digitalization of municipal property accounting

Financial Condition and Government Accounts: An Analysis in the Municipalities of the State of Rio de Janeiro (2009 to 2015)

This research sought to analyze whether the opinion of government accountability of the municipalities of Rio de Janeiro by the Court of Accounts of the State of Rio de Janeiro (TCE-RJ), in the period from 2009 to 2015, considers the financial condition of these municipalities. The financial condition was measured based on the methodology created by the Canadian Institute Chartered Accountants and adapted to the reality of the Brazilian institutional and regulatory environment. Factor analysis was used to select and group the determinants of municipal financial health and the logistic regression analysis to assess whether the result of the opinion of the municipal accounts by the TCE-RJ considered the municipal financial condition. The results were conclusive in relation to the analysis of the accountability of municipal government accounts considering the financial condition factor that deals with the collection, as well as the opinion of the TCE-RJ indicated that it is related to the technical analysis of external control. It was not possible to conclude whether there is political influence from the governor in issuing the prior opinion of the plenary.

Fiscal windfall curse

Abstract We study the impact of a one-off exogenous fiscal windfall on local public finances in the canton of Zurich in Switzerland. In contrast to much of the literature of resource windfalls, the windfall occurred in a stable democracy with strong fiscal institutions. It was due to the IPO of Glencore on the London Stock Exchange in 2011. As a result, its CEO paid an extraordinary tax bill of approximately CHF 360 million. About CHF 238 million of that extra tax revenue entered the municipal resource equalization scheme and rained down on the municipalities of the canton of Zurich. This quasi-experimental setup and our unusually rich dataset allow us to estimate the causal effect of this one-off windfall on all municipal accounting positions. We show that it triggered large, permanent expenditure increases targeting specific groups (mostly public employees) at the same time as general tax cuts and user charge hikes. The resulting imbalances caused a 7.5-fold increase in gross debt relative to the windfall. This massive overreaction hints at a substantial fiscal windfall curse, even with strong fiscal institutions. (178 words)

National or sub-national parties: Does party geographic scope matter?

In many developing countries, local elections are increasingly dominated by political parties with a local or regional scope. This paper examines whether the geographic scope of a ruling party (national vs. sub-national) affects local policy outcomes. This party dimension can be important due to differences in parties' ability to select and discipline politicians, coordinate with other government institutions, or internalize geographical spillovers. Using a regression discontinuity design and data from Peruvian municipalities, we find that a party's geographic scope has negligible effects on most observable policy outcomes. We also document a small impact on the mayor's education and municipal accountability. The lack of stronger effects appears to reflect policy convergence driven by political competition. Overall, our results challenge the view that sub-national-party rule is detrimental to local governance.

The Effect of Party Geographic Scope on Government Outcomes: Evidence from Peruvian Municipalities

In many developing countries, local elections are increasingly dominated by political parties with a local or regional scope. This paper examines whether the geographic scope of a ruling party (national vs. sub-national) affects local policy outcomes. This party dimension can be important due to differences in parties' ability to select and discipline politicians, coordinate with other government institutions, or internalize geographical spillovers. Using a regression discontinuity design and data from Peruvian municipalities, we find that a party's geographic scope has negligible effects on most observable policy outcomes. We also document a small impact on the mayor's education and municipal accountability. The lack of stronger effects appears to reflect policy convergence driven by political competition. Overall, our results challenge the view that sub-national-party rule is detrimental to local governance.

Social Programs in the Structure of Expenditures of the Consolidated Budget of the Federa-tion Subject

The purpose of the study is to examine the role of social programs in the structure of expenditures of the consolidated budgets of the Russian Federation and the Volgograd region, to identify the main directions for improving the content of targeted programs aimed at implementing specific measures in the field of social policy.Materials and methods: the methodology includes structural and statistical analysis, methods of economic forecasting and modeling. The analysis uses official statistical data, as well as re-ports on the performance of the consolidated budgets of the Russian Federation and the Volgograd region in the period 2014-2018. The paper contains an analysis of both scientific periodicals and non-periodical publications devoted to the topic of this study.Results: the paper discusses the features of spending budget funds for the implementation of social programs at both the federal and regional levels, reflects the model of the impact of the volume of budget financing of the social sphere on the state of the regional economy. In the course of the work, recommendations were developed to improve the mechanism for allocating financial resources, including elements of public-private partnership, as well as to stimulate the development of socially-oriented non-profit organizations that can become effective intermediaries between government agencies and the population in the implementation of social policy measures. The study revealed an upward trend in the volume of budget funds allocated for the implementation of activities within the framework of social environment development programs. At the same time, it was noted that this growth is partially offset by the dynamics of inflation, which indicates the need to optimize expenditure items taking into account data on changes in the consumer price index and the level of real incomes of citizens.Conclusion: centralizing the management of socio-economic development processes seems to be the most rational course of action in an unstable economic system. Improving the quality of life of the population of the regions occurs in the conditions of transformation of economic systems, during which the regional economy joins allRussian course. In the course of the work, the need to improve the effectiveness of the implemented social policy was justified, which becomes especially necessary in the conditions of increasing rates of population outflow from the Volgograd region. The developed social sphere of the region makes it possible to form effective civil society institutions, in which the population independently participates in the process of improving the social environment. To ensure control over timely and complete budget execution, state audit methods can be used (we are talking about regional and municipal control and accounting bodies), including strategic audit, which allows proactive control of the effectiveness of upcoming events. The results of this study can be used to track the dynamics of budget spending in the implementation of socially-oriented programs, as well as to determine the most promising areas of budget financing of the social environment.

Determinants of mandatory disclosure compliance in Swedish municipalities

PurposeThe purpose of this article is to examine whether, and if so, to what extent, noncoercive isomorphism determines mandatory disclosure compliance at a later stage of an accounting reform.Design/methodology/approachThe analysis of compliance is based on data from 289 Swedish municipalities for 2016, which is nearly two decades after the initial legal reform in which mandatory requirements were imposed by the Swedish government in an effort to harmonize financial reporting practice. Following the standard approach in the literature, an unweighted compliance index was used as dependent variable. Proxies for municipal accounting networks and involvement in professional government accounting associations were used to explain individual municipalities' levels of compliance.FindingsDifferences in individual municipalities' levels of compliance were strongly related to the financial reporting practice of other municipalities in their accounting network. These results suggest that normative and mimetic isomorphic pressure stemming from these local networks, where accounting departments continually meet and share experiences, is a very potent force. In contrast, isomorphic pressure stemming from involvement in activities offered by professional government accounting associations is generally not a potent force at this stage.Practical implicationsIn settings where municipal accounting networks exist, it may be effective to stimulate de facto harmonization by directing information, education and other efforts toward the professional environment in which these networks operate.Originality/valueUnlike prior literature, the data in this study are from a later stage of a public sector accounting reform.

Diplomacy and the karczma/taberna: The role of Cracovian public houses in the diplomatic practice of the Jagiellonians (1430–1540)

Public houses – inns, taverns, and alehouses – during the Jagiellonian Dynasty (1385–1572) in Cracow functioned as important establishments in the diplomatic services of kings, city officials, and the nobility. Not only did these locales offer drink, food, and accommodations to emissaries for their travels and work, but they provided much more. For the diplomats, the inns, taverns, and alehouses were sites to learn the latest news, gossip, and public opinion. They provided a place to fraternize and they were also trusted locations for sensitive diplomatic negotiations. Public houses likewise served as “post offices” where envoys could receive their letters. Although scholars have studied these establishments, the diplomacy, and urban history throughout Europe in various epochs, they have neglected to analyze the role of the Cracovian public houses in diplomatic services in the Jagiellonian era. This article provides a comprehensive examination of sources, including royal and municipal accounting and personal correspondence, to reveal the role of public houses in the diplomatic practices of the Jagiellonian dynasty.

The external control of the accounts of the 144 municipalities of Pará: an implication in the evolution of Brazilian democracy

Purpose: to analyze the situation of the external control of municipal accounts in the state of Pará in relation to timeliness of information and its relation to the democratic process in the sense of accountability.
 Methodology: The research was developed with the support of the stakeholder theory, classified as exploratory, descriptive of quantitative approach. An exploratory investigation supported the investigated subject, starting from the cataloging of the 144 municipalities that form the state of Pará, with consolidated accounts. Using the empirical-analytical method, a longitudinal database of nine consecutive years was formed from 2008 to 2016. The data were collected on the website of the Court of Accounts of the Municipalities of the State of Pará (TCM / PA). The variable of analysis was the time spent by the court to render decisions on municipal accounts.
 Results: The findings revealed that the 146 municipalities delivered a total of 2,330 accounts in the period from 2008 to 2016, and only 600 cases were appreciated. Between the protocol date and the TCM / PA decision presented a median of four and a maximum of eight years.
 Contributions of the Study: The research contributes to the dissemination of information on the timeliness of assessments of municipal public accounts by the courts of accounts. For information to have utility to users it should be timely. The fact that the control of the courts of accounts happens a posteori, timing becomes relevant because it deals with information necessary to democracy. According to Melo, Pereira and Figueiredo (2009), government institutions with the purpose to control the acts of public power have attracted, in the last decades, a greater attention of society. Pinho and Sacramento (2009), investigating accountability in Brazil, demonstrate that society has participated more actively in the control of government actions in the last 20 years.