Municipal Audit Gains Offset by Governance Concerns

Maluleke urged all spheres of government to provide coordinated support to municipalities to improve governance and institutional capacity.

Auditor-General Tsakani Maluleke has warned that municipalities have made only limited progress in improving governance, financial management and service delivery, despite some encouraging improvements in audit outcomes. Presenting the 2024-25 municipal audit outcomes report to Parliament, Maluleke said many municipalities continue to struggle with deteriorating infrastructure, unreliable services and weak financial health. She noted that mayors and councils serving during the sixth administration had achieved only modest improvements over the past four years, while communities and businesses continued to experience the effects of governance and service delivery challenges.

The report found that only 39 municipalities, representing 15% of all municipalities audited, achieved clean audits during the financial year. At the same time, 38 municipalities have regressed since the 2020-21 financial year, accounting for nearly a quarter of total local government expenditure. The country's eight metropolitan municipalities also continued to show declining audit and performance outcomes, affecting millions of residents who depend on municipal services.

Signs of improvement emerge in key audit indicators

The most significant improvement was the reduction in municipalities receiving repeat disclaimed audit opinions, which reached the lowest level recorded in several years. The number of municipalities receiving unqualified audit opinions increased to 61%, a level last achieved during the 2015-16 financial year.

There was also a notable improvement in the submission of financial statements, with 98% of municipalities submitting them on time. This represents the highest compliance rate recorded by the Auditor-General's office.

Maluleke said these gains reflect efforts by municipalities, national and provincial governments, Parliament and provincial legislatures to strengthen oversight and improve accountability. She welcomed the growing cooperation between different spheres of government in addressing audit findings and reducing severe audit outcomes. According to the Auditor-General, these improvements demonstrate that progress is possible when institutions work together and respond to audit recommendations.

AG calls for stronger accountability ahead of elections

While acknowledging the progress made, Maluleke stressed that much more needs to be done to strengthen local government institutions. She called for municipalities to professionalise their administrations through compliant appointments, targeted skills development and better retention of skilled professionals. The report also emphasised the need to build a stronger culture of ethics, accountability and consequence management to ensure that individuals are held responsible for misconduct or poor performance.

Maluleke urged all spheres of government to provide coordinated support to municipalities to improve governance and institutional capacity. With local government elections scheduled for November, she recommended comprehensive induction programmes for newly elected councillors, with particular attention given to members responsible for municipal finances, especially in metropolitan municipalities. She also stressed the importance of maintaining administrative stability in municipalities that are performing relatively well and avoiding unnecessary disruptions caused by frequent leadership changes.

The Auditor-General called on business, civil society and citizens to continue playing an active role in holding local government accountable, while reaffirming her office's commitment to using its expanded powers when accountability systems fail to address serious governance concerns.