Only two of Gauteng’s 11 municipalities received clean audits, says Finance MEC

Gauteng Finance MEC Nkululeko Dunga says only two of the province’s 11 municipalities achieved clean audits in the 2024/25 financial year.

He warned that deteriorating financial management is driving poor service delivery, crumbling infrastructure and rising irregular expenditure across municipalities.

Addressing a media briefing on Sunday on the 2024/25 Municipal Audit Outcomes in Makause informal settlement in Ekurhuleni, Dunga said Gauteng‘s overall audit outcomes had regressed. 

He said six municipalities received unqualified audit opinions with findings, two obtained clean audits, and three received qualified audit opinions.

Dunga said the six municipalities that received unqualified audit opinions with findings were Mogale City Local Municipality, Rand West City Local Municipality, Sedibeng District Municipality, Lesedi Local Municipality, and others he grouped within the same category, while stressing that Johannesburg and Ekurhuleni had both regressed to qualified audit opinions during the current audit cycle.

“We are here because we refuse to allow audit outcomes to remain numbers spoken about in offices, disconnected from the people whose lives those numbers are supposed to describe,” Dunga said.

“The residents of Makause have told us, in their own words, that their children drink water that makes them sick.”

He said the community had also complained about unemployment, inadequate sanitation and emergency services being unable to reach residents because of inaccessible roads.

“What the Auditor-General calls a qualified audit opinion, what the Auditor-General calls material irregularities, what the Auditor-General calls growing concerns and uncertainty, is not an abstraction; it is Makause informal settlement.

”It is the water your children drink, it is the toilet that has not been cleaned in weeks, it is the ambulance that cannot reach your gate.”

Dunga praised Midvaal Local Municipality and West Rand District Municipality for maintaining clean audit opinions for 13 and two consecutive years respectively.

“Proof that clean governance is possible in this province when leadership commits to it,” he said.

He also noted that audit opinions for Mogale City Local Municipality, Rand West City Local Municipality, Sedibeng District Municipality and Lesedi Local Municipality remained unchanged at unqualified with findings.

Dunga singled out Mogale City for opening the financial year with a zero balance on unauthorised, irregular, fruitless and wasteful expenditure but cautioned that this should not erase previous losses.

“A zero opening balance does not erase what was stolen or misspent in the years before it and we will continue to insist that money lost to irregularities and unauthorised expenditure in Mogale City’s past is accounted for and, where possible, fully recovered,” he said.

He also condemned the burning of the Lesedi mayor’s house, saying frustrations over governance failures should never result in violence.

“What we cannot and will not condone is the burning of the Mayor’s House,” Dunga said.

“Anger at governance failures must find its expression through accountability, through the ballot, through organised community voice, never through arson, never through violence against any person.”

The MEC said the City of Tshwane, Merafong City Local Municipality and Emfuleni Local Municipality remained on qualified audit opinions.

He said Tshwane had accumulated R12.17 billion in irregular expenditure, R5.22 billion in unauthorised expenditure and R3.61 billion in fruitless and wasteful expenditure over four years, the highest irregular expenditure recorded by any municipality in Gauteng.

According to Dunga, these financial failures continue to translate into deteriorating municipal services.

“Tshwane’s unauthorised, irregular, fruitless and wasteful expenditure means that water losses of R5.2 billion and electricity losses of R10.4 billion continue year after year, while residents in Soshanguve and Mamelodi carry the cost of infrastructure that leaks more than it delivers.”

Dunga welcomed the write-off of Emfuleni’s Eskom debt but warned that it should not be viewed as a success.

“We say plainly that a debt write-off is a second chance and not an achievement. Emfuleni must use it to change how it manages public money, not merely to breathe more easily under the same practices that got it into difficulty in the first place.”

He expressed particular concern over the regression of the City of Johannesburg and the City of Ekurhuleni, both of which moved from unqualified to qualified audit opinions.

“We will not soften this,” he said.

Dunga said Johannesburg accumulated R6.55 billion in irregular expenditure, R6.81 billion in unauthorised expenditure and R400 million in fruitless and wasteful expenditure over four years.

He said the consequences included a landfill site that was mismanaged to the point of harming the public, an underutilised bus station despite transport demand, and pollution of a water source during a period when residents required clean water.

However, Dunga said Ekurhuleni’s regression was even more concerning.

“Of the two, Ekurhuleni’s regression is more alarming, and we say so without apology.”

He said the metro accumulated R620 million in irregular expenditure over four years, R400 million in unauthorised expenditure in the second year alone and R80 million in fruitless and wasteful expenditure over three years.

Dunga said the Auditor-General had identified three separate material irregularities relating to polluted water sources and found procurement irregularities involving information and communication technology service providers.

“This is not mismanagement, it is more than just mismanagement,” he said.

“The city has now admitted for the first time that it is not confident to keep operating without help.”

Dunga said three municipalities – Johannesburg, Ekurhuleni and Emfuleni – disputed their audit findings, but every dispute was resolved in favour of the Auditor-General.

He said financial reporting across Gauteng municipalities had continued to deteriorate, with only 42% submitting good-quality performance reports.

Irregular expenditure across municipalities increased from R6.6 billion in the 2020/21 financial year to R14.44 billion in 2024/25.

Over the current administration, Gauteng municipalities accumulated R45.92 billion in irregular expenditure.

Dunga said the province’s most common areas of non-compliance included expenditure management, procurement management, material misstatements in financial statements and consequence management.

He argued that the figures represented more than accounting failures.

“Makause is what these numbers become when they are left unaddressed,” he said.

“It is the result of what happens when a whole system of financial governance is allowed to decay.”

Calling for stronger accountability, Dunga said the Auditor-General should make greater use of its referral and binding remedial powers to ensure accounting officers faced consequences for unresolved material irregularities.

“What we need instead is for the Auditor-General to bite harder, to use more assertively and more often the referral and binding remedial powers it already holds.”

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