Municipal finances need urgent attention across SA

THE Auditor-General's (AGSA) 2023-24 Municipal Finance Management (MFMA) report paints a sobering picture of South Africa's municipal governance.

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While there are glimmers of progress, the overall message is clear: municipalities are failing to deliver on their mandates, and the consequences are being felt most acutely by our citizens who rely on basic services.

Two issues stand out starkly in this year’s report: the ineffective use of financial consultants and the troubling disconnect between budget expenditure and actual performance outcomes.

Let's start with financial consultants. Municipalities spent a staggering R220 million on consultants in the 2023-24 financial year. This would be justifiable if it led to improved financial management, skills development, and long-term sustainability.

But the reality is far from that. The AGSA found that consultants were often brought in to perform basic functions that should be handled internally — and worse, there was no evidence of skills transfer or capacity building.

In many cases, the same consultants are rehired year after year, creating a cycle of dependency that drains public funds without building institutional resilience.