Municipalities Burned R268 Billion. Again.
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National Treasury just published the 2024/25 MFMA Compliance Report. The number that matters is R268.13 billion, that is how much municipalities have racked up in unauthorised, irregular, fruitless and wasteful expenditure. It is up from R264.10 billion the year before. The line is moving in the wrong direction.
What is this report
Every year, Treasury and the provincial treasuries have to check whether municipalities are sticking to the Municipal Finance Management Act. The Act sets out how local government must handle money, run procurement, fill key posts, and deal with people who mess up.
The 2024/25 report covers 1 July 2024 to 30 June 2025. It pulls data from the Muni eMonitor system, the Audit Action Plan system, and the Financial Management Capability Maturity Model. The numbers are pre-audit, which means the Auditor-General will still tighten them, but the trend lines are already clear.
The verdict is blunt: there is some progress on policy paperwork and cost containment, but the deep problems are still there, in leadership stability, in consequence management, and in actually doing what the policies say.
The findings that hurt
R268.13 billion in unauthorised, irregular, fruitless and wasteful expenditure. Irregular expenditure is the biggest contributor. Treasury says this is being driven by weak internal controls and ineffective consequence management. Even worse, when municipalities do deal with this expenditure, they tend to write it off rather than recover it from the people responsible. So nobody pays.
Senior posts are still empty. Only 84% of critical senior management positions are filled. The biggest gaps are at Chief Financial Officer, Chief Audit Executive, and Chief Risk Officer level. These are exactly the roles that exist to stop money walking out the door.
Supply Chain Management is still broken. Many municipalities have not updated their SCM policies, or never had proper ones to begin with. The Auditor-General flags the same issues year after year, and the same irregularities keep happening.
Disciplinary boards exist, but nothing happens. 178 municipalities now have disciplinary boards in place, but the number of financial misconduct cases reported, investigated, and acted on has actually gone down. Boards on paper. No teeth in practice.
Consultants are still doing the work. Even after R5.06 billion in cost containment savings (mostly from cutting consultants), municipalities are still leaning heavily on outside help for asset management, AFS preparation, audit support, and landfill provisions. Translation: the in-house finance function is not delivering.
Why this matters if you are an accountant
This is not just a public sector story. If you work in or near a municipality, this report has your name on it.
If you work in a municipality, you carry real personal risk. As CIBA covered in How One "Yes" Can Cost Your Career in Municipal Finance, MFMA section 62 places personal, non-delegable duties on accounting officers. "I was told to sign it" is not a defence. The VBS scandal proved that point. Finance managers who processed those payments were named, charged, and pursued. The MFMA Compliance Report shows that 178 disciplinary boards are now sitting and waiting. Make sure you are not the first name on their agenda.
If you advise municipal clients or contractors that bid for municipal work, your client's payment depends on a system that is failing internal controls. Late payments, contract disputes, withholding because of irregular expenditure investigations, these are now standard. You need to know how the MFMA SCM rules actually work so you can protect your client's cash flow and your own invoice.
If you are a CFO, CAE, or CRO looking for a move, the vacancy data tells you the public sector is actively hunting for finance leaders. Good money. Real impact. Real risk. As Government Said Sign It. The PFMA Says Otherwise lays out, the personal liability load is heavy. Go in with your eyes open.
For everyone else, R268 billion lost to waste and fraud is GDP that never reaches schools, clinics, roads, or refuse collection. SMEs in the construction, services, and logistics sectors that depend on municipal contracts get hit first when municipalities fall apart. When your local economy stalls, your client base stalls with it. The MFMA story is your client retention story.
What you can do this week
If you work in public sector finance, sit down with MFMA sections 32, 62, 78 and 171. Twenty minutes. Know what you personally carry.
If a client invoices a municipality, check that every quote, PO, and tender process meets SCM regulations. One missing signature can land a payment in the irregular expenditure column and freeze your client's cash.
Stop calling municipal work "compliance work". It is risk advisory. Charge accordingly.
If you have public sector experience, update your CIBA designation profile. CFO, CAE, and CRO vacancies in municipalities are not going away.
