[Press Release] UWC Launches new research tool: Public Finance Watch

The state manages billions of rands of taxpayers money, much of it meant for spending on social justice and development programmes.

A system of public finance set in law governs how national, provincial and local governments should manage our public finances.

South Africa has one of the most transparent systems of public finance in the world, but that has not put paid to corruption, mismanagement, non-compliance with the law, and weak enforcement, which aggressively corrode national assets, and will endanger the project of building a capable developmental state, if not addressed.

The Applied Constitutional Studies Laboratory (ACSL), a research unit at  the Dullah Omar Institute at the University of the Western Cape, has therefore launched a new research tool: Public Finance Watch (PFW). This is a University-based research project that produces and publishes data-driven research on public finance management accessible to the public. It aims to bridge the gap between the public and a subject that affects everyone but may seem technical and remote to many people.

“Our research tries to understand three main issues:  How well is the public finance management system working? What problems affect its performance? What is being done about them, and are those interventions working?”

This first issue of PFW looks at the problem of financial distress in municipalities.  This is a problem that is always in the media. We examine the National Treasury's recently published framework for measuring financial distress.  This tool can be used to detect problems, plan remedial action, and track recovery.

However PFW goes a step further - we correlate that measure with other data to determine whether it can also be used predictively, to flag the probability of financial crisis and trigger mandatory corrective intervention.

The results so far are interesting.

Public Finance Watch (Issue 1- November 2018) is available for download here.