Billions Burned, Budgets Busted: Why Accountants Are Key to Fixing Our Failing Municipalities
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R1.47 billion spent on consultants. 41 clean audits out of 257 municipalities. And a staggering R37.28 billion lost to water and electricity leaks. The Auditor-General’s 2023-24 report is in, and it reads more like a crime thriller than a budget breakdown.
In her no-holds-barred media release, AG Tsakani Maluleke lays out the ugly truth: local government is still on life support. Despite repeated warnings, metros and municipalities are sleepwalking into disaster, riddled with mismanagement, dodgy procurement, and a staggering lack of accountability.
So what’s the role of accountants in all this?
Here's the good, the bad, and the truly shocking
🟢 The Good: 41 municipalities earned clean audits. What’s their secret? Strong financial discipline, tight controls, and solid project execution. They’re the proof that good governance is possible.
🟡 The Slippery Slope: 99 municipalities got unqualified audit opinions but with major findings on performance and compliance. Worse, most only got there because auditors fixed their numbers. It’s a shaky win at best.
🔴 The Ugly: 113 municipalities ran on unfunded budgets, ignoring Treasury advice. 174 blew R31.8 billion in unauthorised spend. Over R37 billion was lost due to infrastructure neglect. And 219 municipalities paid consultants nearly R1.5 billion, only to submit flawed financials anyway.
The AG stressed that poor governance and accountability, especially in the worst-performing provinces, have a direct impact on service delivery, infrastructure failure, and the wellbeing of residents. The bottom line? Local government won’t improve without stronger institutions, professional financial management, and, critically, a culture of consequences.
Provincial breakdown
The best performing province, Western Cape stood out with the highest number of clean audits and the most stable financial and performance management practices. Municipalities in this province generally submitted quality financial statements and performance reports, demonstrating disciplined governance and credible reporting.
The worst performing provinces included the Free State, North West, and Northern Cape were flagged as having the poorest performance. These provinces had high levels of audit disclaimers, habitually late or non-submission of financial statements, and poor-quality performance reports. The Free State was especially singled out for municipalities repeatedly ignoring financial reporting deadlines.
What Does This Mean for Us?
For accountants in practice, this is your time to shine. Municipalities desperately need credible financial advice, clean reporting, and guidance on compliance. There's money to be made in helping them sort the mess.
For accountants in commerce, weak municipal service delivery hurts your supply chain, your clients, and your own business. Start asking harder questions about local financial health in board meetings—before the potholes hit your profits.
👉 Read more detail on the findings and conclusions in the full AGSA report.
