BCM: the danger of governance failure becoming ‘normalised’

BCM’s poor governance becomes entrenched when provincial intervention lacking For the fourth consecutive year, Buffalo City Metro (BCM) has received a qualified audit opinion on compliance and performance, according to the auditor-general of SA’s (Agsa) 2024/25 municipal audit outcomes. This is not a marginal deterioration nor an isolated lapse. It is a pattern of institutional stagnation in which material weaknesses recur unchanged, despite repeated warnings and escalating fiscal risk.

Qualified audits are not accounting footnotes. They signal that aspects of a municipality’s financial statements cannot be relied upon as credible representations of reality. In BCM’s case, the AG again flagged material misstatements in property, plant and equipment — a core balance-sheet item — left uncorrected year after year.

The failure to resolve such basic accounting deficiencies points to systemic weaknesses in financial governance rather than a lack of technical guidance. The most striking indicator of governance breakdown is the scale and persistence of irregular expenditure. BCM’s cumulative irregular expenditure has now exceeded R11bn, following an additional R1.14bn incurred in the latest financial year, according to the AG’s report.

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This continues a trajectory identified in earlier audit cycles, where cumulative irregular expenditure had already surpassed R10bn. Crucially, the AG has repeatedly recorded that no meaningful investigations were concluded, no recoveries made, and no individual liability established for this expenditure. National Treasury correspondence and provincial oversight records further indicate historic unauthorised expenditure of about R7.8bn and additional irregular expenditure of R3.39bn.

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