Financial management challenges in the South African construction procurement

Abstract

This study proceeds from the premise that the dissatisfaction of the construction clients with the outcomes of the construction projects stems from their objectives not being met by the industry. The study aimed at investigating financial management challenges in the South African construction procurement with a view to establishing how their efficiency and effectiveness could be improved during procurement processes. A qualitative mixed method research design was adopted in carrying out the study. This involved the use of semi-structured interviewsand open-ended questionnaires. Data were collected from National and Provincial Departments of Public Works as public sector client representatives in South Africa. The purposive sampling technique was adopted for the study. Data collected were analysed using content analysis to determine the themes and constructs leading to the identification of public key performance indicators. Further analysis was carried out using mean ranking analysis of factors associated with the strengths and weaknesses associated with public sector clients’ performance. The results of the research show that there are delayed/late payment to contractors, consultants and end user agents due to cash flow challenges; insufficient budgetary allocation for projects; insufficient funds for training of technical personnel; audit deficiencies; lack of financial incentives to employees to boost their morale at work places; poor project funding; late payment to service providers; late release of invoices and payment certificates by the internal project managers among others. Implementable recommendations were made to specific user departments. The financial management units in the South African National and Provincial Departments of Public Works should adopt the recommendation suggested in this study to improve the effectiveness and efficiency of professionals during their project delivery process.

Keywords: Challenges, Client, Construction Procurement, Financial Management, South Africa