‘Deeply concerning’: BCM receives another damning audit report

Buffalo City Metro’s financial woes have deepened after the auditor-general (AG) once again issued the municipality with a qualified audit opinion, flagging systemic governance failures, repeat compliance breaches and irregular expenditure that has now ballooned to more than R11bn. The latest audit outcomes for the 2024/25 financial year were presented to a virtual special council meeting last Thursday, with the AG warning that long-standing weaknesses in financial controls, performance management and project oversight had not been addressed. Vanuja Maharaj, head of portfolio in auditor-general Tsakane Maluleke’s office overseeing the Eastern Cape, Mpumalanga and KwaZulu-Natal, said the metro’s audit outcomes had remained unchanged for the past three years — a trend she described as deeply concerning.

“It is not a good thing that the city’s audit outcomes have remained stagnant, while irregular expenditure continues to escalate,” Maharaj told council. The municipality was again qualified on both compliance and performance, despite spending more than R18m on consultants to assist with financial reporting during the year under review. Maharaj said material misstatements relating to property, plant and equipment had not been corrected, while prior-year control weaknesses continued to undermine the credibility of the city’s financial statements.

“Current findings are a repeat of past issues, showing that systemic problems were not addressed,” she said. Irregular expenditure incurred but not prevented during the year amounted to R1.14bn, bringing the accumulated figure to R11bn. The AG further warned of serious risks to the metro’s financial sustainability, citing poor revenue collection, mounting debtor write-offs, cash-flow constraints, unpaid creditors, infrastructure deterioration and external economic pressures.

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She also highlighted widespread project failures, including poor planning, weak contract management, delays and substandard workmanship, as well as challenges in water provision, wastewater management, solid waste services, road infrastructure and human resource systems. “A culture of non-performance seems to be tolerated by the accounting officer and senior management,” Maharaj said. “The tone at the top is not established to communicate that effective service delivery, proper resource management, transparency and accountability are paramount.”

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