Gauteng municipalities face scrutiny over audit failures and questionable spending - IOL

Gauteng municipalities are being warned to tighten financial controls as audit failures, procurement weaknesses, and hundreds of millions of rand in questionable expenditure raise fresh concerns over whether public money is translating into reliable services.

The latest municipal audit outcomes, tabled in June 2026, showed that only two of Gauteng’s 11 municipalities achieved clean audits in 2024/25. Six received unqualified opinions with findings, while three were qualified.

Thursday, Gauteng Co-operative Governance and Traditional Affairs MEC Jacob Mamabolo said the findings showed the need for stronger preventative controls, tighter supply-chain management, and consequence management.

“Our message to all municipalities is that public resources must be protected,” Mamabolo said. “Every municipality must have effective systems to prevent financial losses, identify problems early and ensure accountability when controls fail.”

The warning comes as Ekurhuleni faces questions over R693.7 million in unauthorised, irregular, fruitless and wasteful expenditure recorded over three financial years.

The figure includes about R397.1 million in unauthorised expenditure, R296.2 million in irregular expenditure, and more than R407 000 in fruitless and wasteful expenditure.

The city’s 2024/25 Auditor-General findings recorded R42.95 million in irregular expenditure, with the majority attributed to breaches of supply-chain management regulations and the Preferential Procurement Regulations. Some contracts were awarded to bidders based on points for legislative requirements that differed from those in the original invitation to bid.

The Auditor-General said: “Similar non-compliance was reported in the previous year” and found that some contractors and service providers were not monitored monthly as required by the Municipal Finance Management Act.

The city reported only about R1.2 million in recoveries over the three years, while indicating that none of the irregular expenditure identified in its latest response had been condoned and no financial misconduct cases had resulted in disciplinary proceedings.

Mamabolo said the audit findings must now translate into concrete corrective action.

“Ekurhuleni must now translate these findings into a clear programme of corrective action. We want to see stronger controls, improved accountability and a sustained improvement in the city’s audit outcomes,” he said.

The concerns extend beyond Ekurhuleni, with Emfuleni and Merafong facing formal government intervention over governance, financial, and service-delivery challenges.

In July, Gauteng Premier Panyaza Lesufi said the two were the only municipalities among the province’s 11 that required immediate assistance.

“Not all our municipalities are going through difficulties. I mean, of the 11 municipalities, it’s only two that ... need immediate assistance, which are Merafong as well as Emfuleni,” Lesufi said.

Lesufi later made clear that Emfuleni remained a priority for the province.

Last week, Co-operative Governance and Traditional Affairs Minister Velenkosini Hlabisa also reiterated in Parliament that Emfuleni and Merafong were the two Gauteng municipalities under Section 139 intervention.

Hlabisa said 38 municipalities nationally had been identified as distressed as of August, while 37 remained under Section 139 intervention.

Emfuleni’s financial problems have been accompanied by persistent service-delivery pressures. The municipality returned about R640 million in unspent funds to Treasury in 2025, while residents continued to raise concerns over sewage spills, potholes, refuse collection and deteriorating infrastructure.

The financial concerns have also drawn action from National Treasury. In July, Treasury withheld equitable-share transfers from 69 municipalities, including Emfuleni and Merafong, over persistent non-compliance with the Municipal Finance Management Act and related regulations. 

The funds were released later that month after the municipalities took steps to meet Treasury’s conditions.