Evaluation of the application of Integrated Financial Management Information Systems in selected municipalities of KwaZulu-Natal

Abstract

This study evaluates the implementation and effectiveness of Integrated Financial Management Information Systems (IFMIS) in selected municipalities in KwaZulu-Natal (KZN), South Africa. The study is driven by the observation that the current financial systems in these municipalities are not fully integrated, contributing significantly to issues of corruption, fraud, and inefficiency. The primary aim is to assess whether the existing financial management information systems can generate credible reports that aid in strategic decision-making by management and stakeholders. Given the qualitative nature of the study, interpretivism emerged as the most suitable research philosophy. A purposive sampling method was employed to select municipalities that best addressed the research objectives, involving 12 senior officials from three municipalities. This study used in-depth interviews for data collection, and thematic analysis was employed to analyse data collected from selected municipalities, utilising a cross-case analysis approach to explore unexpected findings, commonalities, contradictions, and conclusions across multiple cases. Innovation Diffusion Theory and Technology-Organisation-Environment were used to underpin the study. The research highlights the significant gaps in the current systems, including limited reporting capabilities, inadequate training provided to the relevant officials, insufficient server capacity, a high level of UIFW expenditures, and weak security controls. These deficiencies contribute to sub-optimal financial management and service delivery performance. Moreover, the study identifies critical barriers to the successful implementation of IFMIS, such as resistance to change, and technical challenges. It also explores best practices and proposes new technological approaches that could enhance the financial management capabilities of municipalities. The research concludes by developing a framework for the successful implementation of IFMIS, aimed at improving financial accountability, transparency, and efficiency in municipal operations. The key findings suggest that while IFMIS has the potential to significantly improve financial management and service delivery, its success depends on addressing the identified challenges and adopting a comprehensive implementation strategy. The study provides valuable insights and recommendations for policymakers, decision-makers in the municipalities, and other stakeholders involved in enhancing financial systems in local government.