n Journal of Public Administration - The recognition of revenue and the escalating debtors of municipalities in South Africa : political and social dilemmas vs. accounting realities

Volume 40, Issue 4
  • ISSN : 0036-0767



The culture of non-payment, and other reasons, have increased the outstanding debts of municipalities and other public institutions for services rendered by them to disturbing levels. This situation is so serious that one of the most important building blocks of the public sector, namely municipalities, can collapse. The accounting and control measures within municipalities with regard to outstanding debts, and in particular to the collection of these debts together with political interference by politicians, often leave much to be desired. If the preceding, as well as principles of Generally Accepted Accounting Practice (GAAP, GAMAP and GRAP) are taken into account, it is clear that there is more than enough reason for concern that the financial statements of many municipalities in South Africa do not comply with GAAP, and for the purposes of this article, the incorrect recognition and measurement of revenue and debtors. Municipalities, and the public sector as a whole, as well as other influential role players like the Auditor-General, politicians, audit firms involved in public sector audit work and regulating bodies of the auditing profession, the legal profession and prosecuting authorities, will have to consider seriously whether the overstatement of outstanding debtors of municipalities do not constitute window dressing of such serious extent that it can no longer be tolerated.

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