Metro Open Budget Survey

Yonatan Fessha, Dullah Omar Institute, University of the Western Cape

Relevance of the Practice

As local governments go about implementing their service delivery duties, budget accountability has emerged as one of the key issues. Budget accountability stands on the three pillars of public participation, oversight, and transparency. Although formal oversight of the budget by elected representatives is essential, it is not enough. It needs to be supplemented with direct public participation throughout the budget process. While councillors are elected formally to represent their wards in the budget process, it is also important that local government tap directly into the preferences of ordinary citizens when planning, implementing and evaluating the budget process. Equally important is also that the budget process is transparent. Literature suggests the existence of a strong connection between budget decision-making that involves the public and is subject to systematic oversight, on the one hand, and enhanced public trust in government and a deepening commitment to accountability in the use of public resources to provide basic services on the ground, on the other. The findings of the Metro Open Budget Survey (Metro OBS) for 2019 shed light on accountability and the budgeting process in South Africa’s five metropolitan municipalities.

Description of the Practice

The Metro OBS is modelled on the global Open Budget Survey (OBS), an independent, comparative assessment of budget accountability, initiated by the International Budget Partnership in 2006. To date, the International Open Budget Survey has been conducted six times to evaluate national government budget processes in 115 countries across six continents. In 2019, IBP South Africa, in partnership with the Dullah Omar Institute (DOI) at the University of Western Cape, applied the OBS methodology to objectively assesses the availability of budget information, public participation opportunities, and strength of oversight in five of the eight metropolitan municipalities (metros) in South Africa: City of Cape Town, City of Johannesburg, City of Ekurhuleni, eThekwini Municipality, and Nelson Mandela Bay Municipality. Budget information, transparency and oversight was assessed based on generally accepted good practice for public financial management. The survey sought to determine whether budget accountability is reflected in all the four phases of the budget process (i.e. budget formulation, budget approval, budget implementation and audit/oversight).

In so far as transparency is concerned, most metros, according to the findings of the survey, perform better in the approval and audit phases of the budget process. It must be noted that none of the metros fully complied with transparency in budget formulation. A key finding is that the metropolitan cities of Cape Town and eThekwini performed well in the approval phase. Not only were the documents of the two metros relatively comprehensive, they published their Medium Term Revenue and Expenditure Frameworks (MTREFs) on time, thus facilitating transparency in the budget approval phase. Although all metros, with the exception of the City of Johannesburg, published their monthly budget statements on their websites, it is only the City of Cape Town that fully facilitated transparency during the implementation phase. This is because it is the only metro that published all of its monthly budget statements on time for the twelve months preceding the assessment. The City of Cape Town has not, however, performed as well as the metropolitan cities of Ekurhuleni and Nelson Mandela Bay in the audit phase. The latter two ‘provided more budget information (comparing budgeted estimates and actual outcomes) than what the audited financial statements require’. [1] The Metro OBS also ranked the Nelson Mandela Bay top of the group for a transparent public procurement process that published information on awards of contracts and on procurement deviations and extensions timely. Unlike the other metros that limited the information available about their Bid Adjudication Committee meetings to the time, date and venue for the meetings, Nelson Mandela Bay metro published the full agenda as well as all documents.

On the issue of oversight, a key finding was that metros performed strongest during the audit phase, when council and Section 79 committees of the council,[2] the principal oversight structures in the metro, were assessing the annual report and audited financial statements. All five metropolitan councils did not take more than two months to consider the Annual Report after its tabling. It also took most of the metros the same amount of time to adopt the Oversight Report on the Annual Report. An examination of the oversight reports reveals that the councils do not simply endorse the report. The same cannot be said of the oversight during the budget formulation, approval and implementation, which was weak. In particular, the findings underscore that oversight structures are not really visible during budget formulation phase, which is evidently dominated by the executive and the administration. It is pertinent to note that the City of Cape Town is a leader when it comes to the budget formulation, approval and implementation stage. It out-performs Johannesburg, Ekurhuleni, eThekwini and Nelson Mandela Bay metros. The poor performance of the metros is attributed to the fact that there was no indication that the council or the council committee(s) ‘considered certain documents’[3] or, if they had, the deliberations on the same were not made publicly available.

On the issue of participation, a major finding is that generally the metros perform better when the budget is approved and audited. They complied with the duty of facilitating pubic participation during those phases. The same cannot be said with respect to the level of public participation during the formulation and implementation phases of the budget process. Of the five metros, Nelson Mandela Bay and Ekurhuleni performed better in facilitating public participation during the budget formulation phase. The former used a combination of the traditional method of engaging the public through public meetings and innovative mechanisms that include an Integrated Development Plan (IDP) App and an IDP Input Form that can be completed online. The latter engages directly with communities through its ward councillors. The City of Cape Town outperformed the others during the implementation of the budget by announcing in advance all council meetings that deliberate on budget implementation ‘as well publishing relevant reports and minutes’. [4]

Assessment of the Practice

The Metro OBS 2019 is a good initiative that appears to facilitate greater budget accountability in metropolitan municipalities in South Africa. Arguably, it inspires improvements by highlighting both the challenges and opportunities for achieving greater budget accountability, transparency, oversight, and public participation in the budgeting process of metropolitan municipalities. It has the potential to nudge metro governments to become more responsive and accountable.

As the findings of the 2019 Metro OBS reveals, however, metro governments appear to be grappling with the challenges of facilitating greater budget accountability. Seemingly this is indicated by the fact that there is mixed performance on budget transparency, oversight, and participation in the five metros that were assessed. Each of the five metros assessed appears to be placing more emphasis on various aspects of the budget process, making compliance somewhat erratic. Nevertheless, all hope is not lost as these are early days in implementing the tenets of the budget process fully. If anything, there is a lot of room for improvement. Better performance is possible.

Although the 2019 Metros OBS focused on metropolitan areas, one can confidently predict that rural municipalities face a much harder challenge of facilitating budget accountability. This is particularly true with regard to the aspect of the budgeting process that requires prudent financial management. There is, however no reason why rural municipalities should not be expected to adhere to an open and visible municipal budgetary process. Perhaps, it might be a good idea to build on the success achieved by the metro governments by implementing the reforms that are recommended by the team of independent researchers and reviewers. For the purposes of promoting transparency, the survey encourages the publication of a pre-budget statement as well as producing and publishing more disaggregated monthly budget statements timely. The inclusion of rather detailed and specific capital project information in the Medium Term Revenue and Expenditure Framework (MTREF) and a timely publication of information on award of contracts and on procurement deviations and extensions of contracts might also go a long way in improving transparency. Municipalities, both rural and urban, can also do a better job of facilitating public participation in the budgeting process. They can do so by ensuring that Section 79 council committees examine the draft MTREF and submit their recommendations to council. They should also encourage the public to attend not only council meetings but also Section 79 committee meetings where budget implementation is discussed.

References to Scientific and Non-Scientific Publications

Legal Documents:

Constitution of South Africa, 1996

Municipal Financial Management Act 56 of 2003

Scientific and Non-Scientific Publications:

—— ‘Measuring Transparency, Public Participation and Oversight in the Budget Process of South Africa’s Metropolitan Municipalities: Findings from the 2019 Metro Open Budget Survey’ (IBP South Africa and Dullah Omar Institute 2019) <>

[1] ‘Measuring Transparency, Public Participation and Oversight in the Budget Process of South Africa’s Metropolitan Municipalities: Findings from the 2019 Metro Open Budget Survey’ (IBP South Africa and Dullah Omar Institute 2019) 9 <>.

[2] According to section 79 of the Municipal Structures Act, ‘a municipal council may establish one or more committees necessary for the effective and efficient performance of its functions or the exercise of any of its powers’.

[3] —— ‘Findings from the 2019 Metro Open Budget Survey’, above, 11.

[4] —— ‘Findings from the 2019 Metro Open Budget Survey’, above, 15.