Control and oversight measures for ethical conduct in procurement processes at the Raymond Mhlaba local municipality

Abstract

In 1994, after the end of apartheid, the South African government initiated reforms to address socio-economic challenges, focusing on improving public finance management. One key reform was the introduction of a new approach to procurement and supply chain management (SCM), aimed at ensuring efficient resource use and meeting citizens' needs. Previously, public sector procurement was governed by outdated rules that prioritised the lowest price, lacked integration with budgeting and failed to address broader strategic goals. To rectify this, a new SCM Policy Framework for Public Sector Procurement in South Africa, was introduced on 10 September 2003 to standardise and improve the consistency of procurement practices across the public sector. Despite these reforms, issues like fraud and corruption persist, primarily due to weak controls and poor procurement management. The aim of the study is to assess the effectiveness of the current control and oversight mechanisms in place in promoting and enforcing ethical conduct within procurement processes and to explore the underlying reasons for non-compliance with the legislative and regulatory framework guiding procurement processes. The literature reviewed in the study explored various control and oversight measures designed to ensure ethical conduct in procurement processes; procurement processes in the public sector; challenges faced when procuring goods and services; ethical conduct in the public service; causes of unethical behaviour; ethical dilemmas in procurement processes as well as measures to ensure ethical conduct. The theories of ethics were used to explain the motivations behind an individual's actions and describe the characteristics that define a virtuous person. The literature further examined the legislative and regulatory framework that guides procurement processes in the South African public sector. The study was conducted using a qualitative research method. Data was collected through document analysis and interviews with demand and acquisition management, asset management and project management sections at the Raymond Mhlaba Local Municipality. The findings of the study show that, internal controls at the Raymond Mhlaba Local Municipality are not functioning effectively, resulting in deficiencies. The study also revealed that there was non-compliance with SCM legislation and SCM regulations at the Raymond Mhlaba Local Municipality. The proposed conceptual framework may enhance the effectiveness of control and oversight measures to ensure ethical conduct in procurement processes, ultimately leading to improved service delivery and reduced risks of corruption and misconduct. The current study contributes to the existing body of knowledge on weak internal controls and increased ethical risks in public procurement, demonstrating how recurring deficiencies enable non-compliance and misconduct. Additionally, the findings of this study contribute to the existing body of knowledge on oversight failures and persistent audit issues which signal deeper cultural resistance to reform.