Auditor-General Tsakani Maluleke tabled the 2024/25 Consolidated Report on Local Government Audit Outcomes this week. The report points to a continued decline in financial discipline across local government, with worsening audit outcomes, rising financial risk, and serious regression in several of the country’s major metropolitan municipalities.

Only 15% of municipalities, or 39 out of 257, achieved clean audits. This shows that most municipalities are still failing to meet the basic standards of financial transparency, accountability, and sound administration expected of them. In the private sector, a firm that failed to get a clean audit would typically fire its executive management team.

Out of 30 audited municipalities in the Western Cape, 20 achieved clean audits. This means a staggering 51% of all clean audits in South Africa are in one province.

The financial position of local government is even more concerning.

Around 51% of municipalities, or 123, are technically bankrupt, meaning their liabilities exceed their assets. In total, 72%, or 174 municipalities, face severe and ongoing cash flow problems.

Many councils are also approving budgets they cannot afford.

The report found that 45% of municipalities, or 116, approved unfunded budgets. This means they voted in favour of expenditure they did not have the income to fund. These budgets created a combined funding shortfall of R288 billion, deepening the risk that municipalities will be unable to maintain services, pay creditors, or invest in infrastructure.

The report also shows that 15% of municipalities regressed from their previous audit status. This included three major metropolitan municipalities, Buffalo City, Tshwane, and Johannesburg, which is especially serious because metros are responsible for a large share of local government spending and serve a major share of South Africa’s population.

The regression of major metros is one of the most worrying findings in the report. South Africa’s eight metropolitan municipalities manage 54% of local government expenditure and provide services to 40% of the population.

According to the Auditor-General, “[The] outcomes reveal concerning regressions at metropolitan municipalities. Oversight by councils and mayors at these municipalities remains ineffective; controls continue to deteriorate; and non-compliance with legislation is frequently trivialised as merely procedural, despite a heightened risk of fraud in procurement and significant financial loss arising from inadequate contract management. Fiscal discipline remains weak, with funds being mismanaged and wasted through deficient procurement practices and poor project planning, execution, and implementation. There are also widespread contraventions of environmental laws and the continued failure to deliver, maintain, and sustain adequate infrastructure”.

Sounding desperate, the Auditor-General called on “mayors and councils, as well as the ministers, members of executive councils (MECs), and committees in Parliament and provincial legislatures that are responsible for local government to diligently perform their legislated governance and oversight responsibilities”.

But that is unlikely to do much good as it overlooks the root of the problem – because above all else, the financial chaos at local government level is a reflection, not of a lack of diligence, but of three decades of cadre deployment, affirmative action, and empowerment policy that put ideological and social engineering objectives above merit in appointments and thereby provided cover for the looting of public money. Improving outcomes will not happen via appeals for diligence and better government, but will instead require dismantling the ideological scaffolding that has allowed the extent of the chaos and looting to take hold in the first place.