Western Cape Leads with Clean Municipal Audits amid National Fiscal Struggles

In a panorama dominated by fiscal challenges and the quest for accountability within South African local governance, the Western Cape stands out as a beacon of administrative excellence, according to the Auditor-General of South Africa (AGSA). The latest audit outcomes paint a complex fiscal canvas, with only 34 out of 257 municipalities achieving clean audits in the 2023 financial year, and a remarkable 20 of these commendable institutions preside within the Western Cape.

Diving into the consolidated general report for 2022-23 released by AGSA, the revelations point to a concerning trend across the majority of South Africa's municipalities, with a mere 13% attaining this desirable audit status. Imperatives for municipal governance—credible financial statements, reliable service delivery reports, and stringent adherence to legislation—remain elusive for many. Yet, the municipalities with clean audits have established robust disciplines and controls ensuring prompt issue detection and resolution, distinguishing themselves as models of sound governance.

The Auditor-General, Tsakani Maluleke, noting the importance of these clean audits, emphasized that although they do not signify perfect administration, they clearly indicate that fundamental structures are in place, with public resources being judiciously allocated and utilized. Maluleke also highlighted areas of concern, where municipalities face struggles with revenue accounting due to incorrect billing, deficient management of debtor books, and irregular spending.

Furthermore, the struggle extends to the proper accounting and care for municipal infrastructure, leading to depreciating assets and lackluster maintenance plans. Despite the dismal picture, positive movements are observed in municipalities striving for better audit results and increased punctuality in the submission of financial statements.

The audit outcomes also underscored that political instability, especially in coalition-governed metros, undermines municipal administration. Among the eight metropolitan areas, only Cape Town achieved a clean audit, setting a remarkable example for others to follow.

Material irregularities are another domain where AGSA has stepped up its vigilance. The enhanced power to demand action in addressing these financial inconsistencies has led to substantial recoveries and prevention of losses amounting to hundreds of millions. However, the overarching narrative remains one of municipalities underperforming, an issue that has tangible impacts on the lives of South Africans.

The Auditor-General's report concludes with a clarion call for sweeping change across the power spectrum, from municipal councils to mayors and provincial leaders. Augmenting service delivery and responsible fiscal management will be the byproducts of capable, cooperative, and responsive municipalities that steadfastly adhere to their mandates.