Only 34 out of 257 municipalities receive clean audits

The audit outcomes of the country’s municipalities have regressed and are far behind compared to the beginning of the current municipal administration in 2021. That’s the word from Auditor-General Tsakani Maluleke.

She was briefing the Portfolio Committee on Cooperative Governance and Traditional Affairs on the audit outcome of municipalities for the 2022/23 financial year. The outcomes indicate that only 34 out of 257 municipalities received clean audits.

The audit outcomes of the country’s municipalities for 2022-2023 have been tabled in Parliament.

Maluleke says despite Metros having significant budgets, their audit outcomes are not impressive.

“The political instability that often confronts the administration of Metros has the direct impact of weakening those institutions and weak institutions will always struggle to protect leakage or rather to protect public resources. They will always struggle to have the type of reliable and predictable controls and systems.”

The audits indicate a reduction in the amount of money used to pay consultants from R1.63 billion to R1.36 billion.

We found that 127 (58%) of the municipalities that used consultants for financial reporting had material misstatements in the areas in which the consultants did work#AGReport #MFMAInsights #MunicipalFinance pic.twitter.com/MP2wDSEZYW

— Auditor-General South Africa (@AuditorGen_SA) August 27, 2024

In addition, there’s an improvement in the rate of late submissions.

However, there are concerns about 10 dysfunctional municipalities in the Free State, Eastern Cape and North West. The Cooperative Governance and Traditional Affairs (CoGTA) Ministry says qualifications in key appointments are important to turn around these municipalities.

“We are determined to come with a new approach but what will determine everything is the political will to change and take decisive action when a need arises to do so,” says Velenkosini Hlabisa, CoGTA Minister.

Ekurhuleni, Johannesburg, eThekwini and Nelson Mandela Bay Metros all received unqualified audits.

While Buffalo City, Mangaung and Tshwane Metros received qualified audits.

“To turn around municipalities requires political will from national government, provincial and at municipal level. It also requires political will on the part of the parties that are participating in the municipality,” says Dr Zweli Mkhize, CoGTA Committee Chairperson.

The Auditor-General says 75% of Metros are unable to provide reliable service delivery reports, yet they have the resources to hire the skills needed to compile credible financial statements and credible performance reports.

Out of the eight Metros in the country only the City of Cape Town received a clean audit.

Video: Office of the AG briefs Cooperative Governance and Traditional Affairs Portfolio Committee