The Auditor General Tsakani Maluleke yesterday released her latest report on local government audit outcomes, revealing a regression of clean audits in the 2022/23 financial year.

Out of the 257 Metropolitan, District and Local Municipalities, only 34 received clean audit outcomes, and while 45 municipalities have improved their audit outcomes since 2020/21, 36 have regressed.

The Cape Town Metro is the only metro municipality in the country to receive a clean audit.

Maluleke’s findings indicate that 110 municipalities collectively incurred R27.3 billion in fruitless and wasteful expenditure.

In addition, 74 municipalities reported that they were unable to collect more than 80% of their billed revenue, leading to significant shortfalls in their operating budgets.

She says poor financial stability and controls have a direct impact on the lives of communities living in municipalities.

“Wasted money and resources means reduced funding for service delivery priorities and, eventually, a greater burden on taxpayers. The lack of credible reporting on performance and finances weakens not only municipal accountability processes, but also the council’s ability to assess the municipality’s performance or to make decisions in response to underachievement. These continuing failures in the most critical part of municipal operations are not receiving the necessary attention from the elected leadership.”

Meanwhile, the City’s Mayoral Committee Member for Finance, Councillor Siseko Mbandezi, says the AG has lauded the City as ‘pocket of excellence’.

He says at its heart, what this recognition means is that public money, that is earmarked for service delivery is spent correctly, transparently and within all the requirements of legislation governing public spending.

“The ones who ultimately win when government performs well are the residents. We go out to bat for our residents every day and will continue to find ways to improve on our service delivery, building on the sound backbone of accountability and good governance that we’ve developed over more than a decade. We are proud to have a clean audit, but to be the only metro in South Africa to get a clean audit is a real concern. Nevertheless, the City will continue to strive to maintain this accolade.”

On the provincial front, the Western Cape Provincial MEC’s of Finance and Local Government has welcomed the release of the report.

The report revealed that the 20 municipalities in the Western Cape achieved an unqualified audit with no findings (clean audits) and 6 municipalities achieved an unqualified audit with findings.

Finance MEC Deidre Baartman says while there has been a slight regression in the number of Western Cape municipalities with clean audits in the 2022/23 financial year, the fact that 17 municipalities were able to sustain their clean audit status is commendable.

“These results, however, still highlight the work that needs to be done in ensuring sound financial management to improve service delivery within local governments across the Western Cape. Clean audits are not merely a measure of good governance and financial management, they also speak directly to service delivery and the improvement of residents’ lives.”

The two qualified audit outcomes were in the Knysna and Beaufort West Municipalities, the adverse audit outcome was in the Laingsburg Municipality, and the outstanding audit was received in the Kannaland Municipality.

READ: Western Cape achieves 100% unqualified audit

The South African Municipal Workers Union has expressed alarm at the AG’s report, calling for urgent and decisive action to address the financial, governance, and service delivery challenges facing the country’s municipalities.