- South Africa’s Auditor-General, Tsakani Maluleke, has revealed the shocking state of local municipal councils and metros in her report on the 2023-24 local government audit outcomes.
- She tabled the bad news Parliament’s Cooperative Governance and Traditional Affairs (COGTA) committee on Wednesday this week.
- Some municipalities have completed imploded in debt forcing Eskom to take over the management and billing of electricity infrastructure and supply and in the case of Emfuleni municipality, Rand Water has taken over water and sewerage infrastructure. Read more
Excerpt
“Three years into the administrative term, metros still struggle to take the lead in ensuring service delivery to all their residents in a financially responsible manner. Actions taken to eradicate disclaimed audit opinions have had little impact in 2023-24 and more municipalities regressed into this category. Municipal finances are severely troubled and, even though funds are constrained, mayors, councils and municipalities are displaying little fiscal discipline. Money paid by residents and funded from the national purse is often wasted through poor financial and procurement decisions and project failures.
Failure at municipal level has a direct and significant impact across South African cities and towns. Residents and businesses face regular disruptions in service delivery and have to contend with water leaks, potholes and filth in their streets. Municipalities are operating landfill sites in an irresponsible manner and are neglecting wastewater treatment works, displaying a blatant disregard for the environment and the impact that the resultant pollution has on the wellbeing of nearby communities. Communities are yet to experience quality service delivery through new and well-maintained infrastructure, despite national government making available R68,4 billion for infrastructure projects in 2023-24.
Despite continued advocacy for intergovernmental support and collaboration, the opposite is evident in the lack of partnership among the three spheres of government at most municipalities and in the weak oversight by provincial legislatures and Parliament – particularly at metros. Where the political leadership of municipalities respond well to the support and guidance provided by national and provincial government, improved governance follows.” – Tsakani Maluleke, South Africa’s Auditor-General.
Related news: Ballooning municipal debt is an existential threat to Eskom
Metros
Only Cape Town received a clean bill of health. Johannesburg, eThekwini and Ekurhuleni received unqualified audits with findings. Buffalo City, Tshwane, Mangaung and Nelson Mandela Bay all received qualified audit opinions with findings.
Metros are plagued by poor revenue management, debt collection and budgeting practices, coupled with financial losses due to poor-quality spending. Metros have listed debt and significant loans to service, while they are financially strained. City of Tshwane and Mangaung metros have – for at least the past four years – disclosed significant doubt on their ability to continue fully operating as a going concern.
Weaknesses in infrastructure project delivery and ineffective preventative maintenance are as common in metros as in other municipalities, despite having better access to resources. Most metros did not adequately assess the condition of roads and infrastructure for solid waste and wastewater, and some did not have maintenance plans.
Municipalities
Municipal managers, mayors and councils all contributed to poor financial management in municipalities.
Of the 247 municipalities audited, only 41 municipalities (16%) obtaining clean audits. While 59 municipalities have improved their audit outcomes since 2020-21 (the last year of the previous administration), 40 have regressed.
Thirteen municipalities did not submit their financial statements and performance reports for auditing by the legislated date. Seven of these municipalities (five of which are in the Free State), disregard the legislated requirement and submit their financial statements and performance reports late every year – or do not submit them at all. In 2023-24, these seven municipalities managed a combined budget of R6,85 billion.
Link to the full report HERE
Author: Bryan Groenendaal
