A parliamentary briefing on audit outcomes for three KwaZulu-Natal and Free State municipalities has revealed a crisis of governance, crumbling infrastructure and billions in unresolved irregular expenditure, with little sign of improvement.
Msunduzi shows modest gains, but structural rot remains
The second-largest municipality in KwaZulu-Natal, Msunduzi, managed to improve its overall audit outcome to an unqualified financial opinion for the 2024-25 financial year, but auditors were quick to temper any optimism.
Sharonne Adams, head of portfolio at the Auditor General of South Africa (Agsa), told the joint sitting of the Standing Committee on Public Accounts (Scopa) and the portfolio committee on Cooperative Governance and Traditional Affairs (Cogta) that the three municipalities audited “reflect a different spectrum on the continuum when it comes to performance accountability, transparency and institutional integrity”.
The improvement at Msunduzi was largely procedural in nature.
Nomalungelo Mkhize, the Agsa’s KwaZulu-Natal business unit leader, explained that the municipality’s performance report improvements came only after auditors permitted corrections.
“It speaks to the fact that there is still reliance on the audit process in order for them to achieve the outcomes,” she said.
Only 57.89% of the municipality’s key performance targets were achieved, barely above the halfway mark, while 88% of the budget was spent.
High vacancy rates of up to 60% in technical units, ageing infrastructure and fragmented IT systems were cited as key contributors to service delivery failures.
Msunduzi’s creditors wait an average of 191 days to be paid, against a legal requirement of 30 days, while at least R80 million in fruitless and wasteful expenditure is linked to unpaid Eskom and water board accounts alone.
“Not dealing with this area has an impact on other areas such as financial health,” Mkhize warned, “particularly in the area of fruitless and wasteful expenditure.”
Governance vacuum with a R1.4 billion liability gap
The picture at Mafube Local Municipality in the Free State was considerably grimmer.
The municipality received a qualified audit opinion for the third consecutive year, with disclaimer conclusions on its predetermined objectives.
Presenting on behalf of the Free State business unit, Luthando Mbandazayo told the committee that Mafube achieved only 15% of its key performance indicators while spending 151% of its budget, a disparity that drew sharp questioning from members.
The municipality’s liabilities exceed available cash by R1.4 billion, water losses stand at 71%, and it takes more than 2 300 days to collect outstanding debt from residents.
“The municipality was put in administration around June 2022,” Mbandazayo noted, “but from then onwards we’ve not seen any major improvement in terms of the municipality.”
A housing project worth R36.9 million which was intended to supply water storage capacity was stalled following a contractor termination dispute, and the Agsa identified a potential overpayment of R1.6 million on the project.
Four material irregularities were issued, including one related to pension fund contributions that remain unpaid.
“The municipality did not adequately implement the recommendation,” Mbandazayo said of the Agsa’s remedial action, with the municipality only responding months after the remedial notice was issued.
A decade of disclaimers and a province forced to step in
Masilonyana Local Municipality, also in the Free State, received its tenth consecutive disclaimer of audit opinion, the most severe possible outcome.
Deputy business unit leader Sue Ellen Steenbock told the committee that 19 significant line items in the municipality’s financial statements were disclaimed, including assets, receivables, cash and grants.
“We cannot ensure the financial sustainability of the municipality,” she said flatly, adding that “the council at Masilonyana could not exercise oversight of the municipality.”
The municipality had no functional audit committee, did not prepare annual reports for five consecutive years, and its accounting officer failed to implement Agsa recommendations.
86% of the municipality’s cash comes from government grants, of which 55% is spent on salaries and councillors’ remuneration.
The provincial government intervened under section 139(1)(b) of the constitution in December 2025.
“The outcomes will not change through technical fixes alone,” Steenbock concluded, “but with decisive leadership, accountability and consequence management being implemented.”
The accountability gap
Committee members pressed the Agsa delegation on why consequence management consistently fails across all three municipalities.
Adams acknowledged the systemic nature of the problem, noting that an amendment to the Municipal Finance Management Act is currently in circulation that would rethink how consequence management is driven at the municipal level.
“There’s no proper consequence management,” she said. “It creates a culture of impunity as the transgressors are not being dealt with.”
Cogta committee chairperson Dr Zwelini Mkhize echoed the frustration, calling for a coordinated response involving both provincial and national government.
“These municipalities are suffering from a number of issues,” he said. “On their own, they can never really cure themselves of this kind of challenge.”
