GERMISTON, Gauteng – The latest Gauteng municipal audit outcomes have exposed a severe regression in local government financial management, prompting Gauteng Finance MEC Nkululeko Dunga to announce a rigorous new oversight framework. Delivering his response to the Auditor-General’s consolidated report, Dunga painted a stark picture of the province’s financial health, warning that without immediate intervention, the collapse of municipal finances and service delivery is imminent.
Out of Gauteng’s 11 municipalities—comprising three metropolitan municipalities, two district municipalities, and six local municipalities—overall audit outcomes regressed during the 2024/2025 financial year. Only two municipalities, the Midvaal Local Municipality and the West Rand District Municipality, managed to secure clean audits (unqualified with no findings). Midvaal sustained this achievement for 13 consecutive years, while West Rand achieved it for two consecutive years. Six municipalities received unqualified opinions with findings, and three received qualified audit opinions.
Metros in Crisis: Regressions and Billions in Irregular Expenditure
The province’s three major metropolitan municipalities—Johannesburg, Tshwane, and Ekurhuleni—all experienced alarming regressions, dropping from unqualified to qualified audit opinions.
Dunga singled out the City of Ekurhuleni’s decline as particularly concerning. Over a four-year period, Ekurhuleni accumulated R620 million in irregular expenditure, incurred R400 million in unauthorized expenditure in a single year alone, and amassed R80 million in fruitless and wasteful spending over three years. The Auditor-General also identified three material irregularities involving the pollution of water sources that harmed the public, alongside an ICT panel collusion that cost the metro an extra R6.99 million, resulting in R37.68 million in irregular expenditure in a single year.
The City of Tshwane recorded the highest irregular expenditure of any municipality in the province, accumulating R12.17 billion over four years, alongside R5.22 billion in unauthorized and R3.61 billion in fruitless and wasteful expenditure. This financial mismanagement has been accompanied by massive infrastructure failures, including R5.2 billion in water losses and R10.4 billion in electricity losses.
Meanwhile, the City of Johannesburg accumulated R6.55 billion in irregular expenditure, R6.81 billion in unauthorized spending, and R400 million in fruitless and wasteful expenditure over four years. Dunga noted that these financial failures translate to severe real-world consequences, including mismanaged landfill sites harming the public, underutilized bus stations leaving commuters in Alexandra and Soweto waiting, and polluted water sources during critical times.
Humanizing the Numbers: Makause and Lesedi
To underscore the human cost of these audit qualifications, Dunga deliberately held his media briefing at the Makause Informal Settlement in Germiston rather than a traditional civic center boardroom. He connected abstract financial terms like “material irregularities” and “going concern uncertainties” directly to the lived realities of residents.
“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 stated. He highlighted that residents in settlements like Makause have lived without security of tenure for over 30 years, rely on uncleaned mobile toilets, drink water that makes them sick, and cannot be reached by ambulances or police vehicles due to inaccessible streets.
Addressing community frustrations, Dunga also spoke plainly about the Lesedi Local Municipality, where violent protests recently led to the burning of Mayor Mluleki Nkosi’s house. While acknowledging the legitimate anger over governance failures, Dunga unequivocally condemned the arson. “Anger at governance failures must find its expression through accountability, through the ballot, through organized community voice, never through arson, never through violence against any person,” he asserted.
Root Causes and Strict Consequence Management
Identifying the root causes of this financial decline, Dunga cited legacy issues, systemic corruption, late submission of financial statements, a lackluster culture, and a dangerous over-reliance on external consultants. He noted that municipalities continue to carry these problems forward, citing overcommitted projects like the Cleveland project where funds are spent without visible changes in service delivery.
In response, the MEC announced a comprehensive program of action to ensure it is “not business as usual.” This includes:
- Heightened Oversight and Tracking: The introduction of an Auditor-General finding tracker to monitor municipalities continuously and ensure problems are not carried from one financial year to the next.
- Internal Capacity Building: A review of supply chain management policies and a push to build internal audit units to reduce the province’s over-reliance on costly consultants.
- Quarterly Assessments: Regular evaluations of the functioning of internal audit units and audit committees at every municipality.
- Collaborative Workshops: Audit preparation workshops convened with the Auditor-General’s office and provincial oversight bodies to clearly define the roles of municipal managers, Chief Financial Officers, and audit committee chairs ahead of the 2025/2026 cycle.
Furthermore, Dunga warned of strict consequence management. He indicated that municipal managers could be held personally financially liable for irregularities identified under their watch, and that the province will not flinch from pursuing litigation where necessary.
While acknowledging positive steps, such as the write-off of Emfuleni’s Eskom debt—which Dunga called a “second chance and not an achievement”—the MEC maintained that the province must work tirelessly with the Auditor-General to ensure that the bleak picture painted by the current audit outcomes becomes a thing of the past.
