Auditor-General Reports Only 43% of SA Municipalities Achieved Unqualified Audits

In a significant oversight report, Auditor-General Tsakani Maluleke unveiled that a mere 43% of South African municipalities were able to achieve unqualified audit opinions for the 2022/23 financial year. These outcomes have cast a spotlight on the state of local government and financial accountability across the nation.

The comprehensive general report released by Maluleke scrutinizes the financial health and compliance of South Africa's 257 municipalities. The 110 municipalities that received unqualified audits have presented credible financial statements that can be trusted in terms of their accuracy and reliability, a basic expectation for any accountable public entity. However, despite the seemingly positive indication of unqualified audits, a deep dive into the report discloses inherent weaknesses in the local government systems.

These unqualified financial statements merely scrape the surface of fiscal management, as many of these municipalities exhibit a persistent struggle to generate trustworthy service delivery reports. Moreover, a vast majority are entangled in compliance issues, neglecting the protocols and standards set out for lawful and efficient municipal governance.

The Auditor-General specifically highlighted the inert nature of financial accountability by citing that within the group of unqualified audits, 77 municipalities have been in this category for several years. This stagnancy indicates a lack of progression toward more thorough and pristine financial and operational governance.

Of the 257 municipalities, merely 34 attained the coveted status of a 'clean audit'. Clean audits demonstrate an admirable level of municipal conduct, including the delivery of accurate financial reports, reliable service delivery, and adherence to the pertinent laws and regulations governing financial operations. These municipalities exemplify the epitome of what the Auditor-General regards as success in municipal management.

The report underscores a concerning trend of municipalities that, despite earning unqualified audits, remain too complacent with their financial reporting and accountability. This complacency leads to inaccuracies in reporting service delivery progress and often results in procurement processes that defy legal obligations.

The Auditor-General's revelations send a stringent message to local government structures on the importance of rigorous financial governance, beyond just attaining an unqualified audit. This report serves not only as a mirror reflecting the current state of municipal management in South Africa but also as a clarion call for an overhaul in the way municipalities handle public resources, service delivery, and overall compliance with statutory regulations.

Local government performance is integral to the quality of life for South Africans, and Maluleke's report points to the need for immediate and decisive action to elevate municipalities to a higher standard of operational transparency and accountability – to exceed the minimum unqualified status and strive for excellence in governance.