These municipalities are drowning in debt, dysfunction and impunity, warns Agsa

The office of the Auditor-General of South Africa. Picture: Moneyweb A parliamentary briefing on audit outcomes for three KwaZulu-Natal and Free State municipalities has revealed a crisis of governance, crumbling infrastructure and billions in unresolved irregular expenditure, with little sign of improvement. The second-largest municipality in KwaZulu-Natal, Msunduzi, managed to improve its overall audit outcome to an unqualified financial opinion for the 2024-25 financial year, but auditors were quick to temper any optimism.

Sharonne Adams, head of portfolio at the Auditor General of South Africa (Agsa), told the joint sitting of the Standing Committee on Public Accounts (Scopa) and the portfolio committee on Cooperative Governance and Traditional Affairs (Cogta) that the three municipalities audited “reflect a different spectrum on the continuum when it comes to performance accountability, transparency and institutional integrity”. The improvement at Msunduzi was largely procedural in nature. Nomalungelo Mkhize, the Agsa’s KwaZulu-Natal business unit leader, explained that the municipality’s performance report improvements came only after auditors permitted corrections.

“It speaks to the fact that there is still reliance on the audit process in order for them to achieve the outcomes,” she said. Only 57.89% of the municipality’s key performance targets were achieved, barely above the halfway mark, while 88% of the budget was spent. High vacancy rates of up to 60% in technical units, ageing infrastructure and fragmented IT systems were cited as key contributors to service delivery failures.

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Msunduzi’s creditors wait an average of 191 days to be paid, against a legal requirement of 30 days, while at least R80 million in fruitless and wasteful expenditure is linked to unpaid Eskom and water board accounts alone. “Not dealing with this area has an impact on other areas such as financial health,” Mkhize warned, “particularly in the area of fruitless and wasteful expenditure.” The picture at Mafube Local Municipality in the Free State was considerably grimmer.

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