Blockchain-Based digital records management for auditing process : a case study of Msunduzi Local Municipality

Abstract

The Auditor General of South Africa frequently identifies poor records management as a major issue during auditing process, resulting in absence of supporting documentation and challenges in proving allegations of misconduct in Municipalities. To address this issue, the study explores the importance of a functional digital records management system and the feasibility of using blockchain technology to enhance records transparency, authenticity, security, and privacy in Msunduzi Local Municipality. It seeks to determine whether the municipality has a digital records management system, assess the potential benefits of blockchain technology, and investigate the likelihood of improved audit results through its implementation. This research employed the Records Continuum Model as a theoretical framework. Post-positivist paradigm and qualitative research approach were used in this study. The study collected data using semi-structured interviews with 15 participants from records management and auditing staff in the municipality, and data was analyzed using thematic analysis. Results from this study indicate that Msunduzi Local Municipality needs a functional digital records management system, which may positively impact audit processes. The use of blockchain technology is perceived as a viable solution to enhance records transparency, authenticity, security, and privacy. Participants in the study believe that implementing blockchain can significantly improve audit results and mitigate issues like maladministration and negative cash flows. Recommendations include the urgent establishment of a digital records management system and a feasibility study on integrating blockchain technology to strengthen records management and auditing practices in the municipality. These measures are seen as essential for promoting transparency and accountability in the public sector.