There’s a crisis of accountability in local government – The Mail & Guardian

Auditor general Tsakani Maluleke has repeatedly made recommendations to improve municipalities’ performances but to little effect. Photo: GCIS

South Africa’s local government landscape is in a crisis, characterised by widespread governance failures and a pervasive lack of accountability. The auditor general is pivotal in promoting transparency, accountability and good governance by auditing municipal finances and operations. But the persistent failure of municipalities to implement the auditor general’s recommendations has severely undermined the effectiveness of these audits. 

Over the past decade, the auditor general has consistently highlighted the deteriorating state of municipal governance, yet the situation continues to worsen. For instance, the 2021-22 Consolidated General Report on Local Government Audit Outcomes reveals that only 16% of municipalities received a clean audit, a stark decline from the 33 clean audits recorded in the 2017-18 financial year and an even more significant drop from the 51 clean audits achieved in 2013-14.

The recurring nature of governance failures is alarming. Year after year, the auditor general’s reports reveal the same issues — financial mismanagement, weak leadership, inadequate financial controls and non-compliance with laws and regulations. 

For example, the 2016-17 auditor general report noted that irregular expenditure had risen to R28.4 billion, a significant increase from R16.2 billion in 2014-15. By 2021-22, this figure had ballooned to R32 billion, indicating a continuing disregard for financial discipline and proper governance. 

According to a study by myself and Dominique Uwizeyimana published in the African Evaluation Journal, the consistent inability to implement the auditor general’s recommendations is exacerbated by political interference, lack of capacity and inadequate consequence management. The research highlights that “the absence of political will and the ineffective enforcement of audit recommendations” are significant barriers to improving municipal governance. This cycle of mismanagement and deteriorating public services is particularly pronounced in marginalised communities where the effect of poor governance is most acutely felt.

The implications of these failures are profound, affecting both the financial health of municipalities and their capacity to deliver essential services. The auditor general’s report for the fiscal year 2021-22 revealed that 62% of municipalities were in financial distress, many of which relied heavily on grants and external assistance to remain operational. The situation has shown little improvement in the subsequent year; according to the 2022-23 results, only 34 out of 257 municipalities achieved clean audits, underscoring the persistent problems in municipal governance and financial management. 

Auditor general Tsakani Maluleke has highlighted the severity of the issue, stating, “Our municipalities are at a breaking point. The continued failure to implement our recommendations is not just a governance issue — it is a threat to the very sustainability of local government in South Africa,” the Mail & Guardian reported. 

This enduring financial instability, compounded by the widespread non-implementation of audit recommendations, poses a significant threat to the sustainability of local government in South Africa. The persistence of these issues underscores the need for urgent and comprehensive reforms to strengthen the implementation of the auditor general’s recommendations and restore public trust in local government institutions.

Addressing these problems requires more than just issuing audit reports — it demands a fundamental shift in how municipalities are held accountable for their actions. The auditor general has repeatedly called for more robust consequence management and extraordinary enforcement powers to implement its recommendations. Yet, the legislative and institutional frameworks in place have proven inadequate. As a result, the same issues continue to recur, eroding public trust and diminishing local governments’ capacity to fulfil their mandates effectively. 

Our research further supports this view, arguing that without a robust enforcement mechanism, “the AGSA’s recommendations risk becoming mere suggestions, with no real impact on improving governance at the local level”. This policy brief outlines the steps necessary to address these challenges, strengthen municipal accountability, and enhance the governance of local governments in South Africa.

Results of recurring governance failures

The failure to implement the auditor general’s recommendations is a pervasive and systemic issue that has persisted across multiple audit cycles. Over the past decade, the auditor general has documented a consistent pattern of governance failures in municipalities, with little to no improvement despite repeated recommendations for corrective action. The 2021-22 auditor general report revealed that 80% of municipalities still needed to address key recommendations from previous audits, leading to recurring issues in financial management, performance monitoring, and governance. This problem is not new; similar findings were reported in the 2012-13 audit, where only 9% of municipalities had fully implemented the recommendations. The persistence of these issues over such an extended period highlights the deep-rooted nature of governance challenges in South Africa’s local government sector.

Financial mismanagement remains one of the most critical issues plaguing municipalities. Unauthorised, irregular, fruitless and wasteful expenditures have become entrenched in the operations of many local governments. For example, in the 2013-14 financial year, irregular expenditure stood at R11.6 billion, which increased to R16.2 billion in 2014-15, and then soared to R28.4 billion in 2016-17. By the 2021-22 financial year, this figure had escalated to R32 billion, underscoring the ongoing failure to implement AGSA’s financial management recommendations. This trend of escalating financial irregularities not only reflects poor governance but also severely compromises the ability of municipalities to deliver services effectively.

Leadership and governance issues are equally concerning. The auditor general’s reports have repeatedly highlighted the lack of accountability at the highest levels of municipal administration as a significant contributor to governance failures. In the 2021-22 audit, 67% of municipalities had substantial weaknesses in leadership, including ineffective oversight by municipal councils and a failure by senior management to take decisive action on audit findings. This mirrors findings from earlier reports, such as the 2010-11 audit, which identified leadership failures as a critical factor in the poor performance of municipalities. The recurring nature of these governance issues points to a systemic problem that requires urgent intervention.

The effect of these governance failures extends far beyond the financial realm, directly affecting the quality of public services. The auditor general’s 2021-22 report notes that more than 50% of municipalities failed to maintain essential infrastructure, leading to frequent service disruptions in areas such as water supply, sanitation, and electricity. These service delivery failures are not new; similar issues were reported in the 2017-18 audit, where infrastructure maintenance was identified as a significant issue for many municipalities. The ongoing failure to implement the auditor general’s recommendations on infrastructure management has resulted in a steady decline in service quality, disproportionately affecting vulnerable and marginalised people.

The need for urgent reforms

The persistent failure to implement the auditor general’s recommendations has significant implications for public service delivery, financial accountability, and governance in South Africa’s municipalities. The auditor general’s reports have consistently highlighted the absence of meaningful consequences for non-compliance with audit recommendations, which has entrenched a culture of impunity within many municipal administrations. This culture of impunity allows poor governance practices to continue unchecked, leading to repeated instances of financial mismanagement and service delivery failures. Without urgent and comprehensive reforms, the cycle of poor governance, financial instability, and inadequate service delivery will continue, further eroding public trust in local government institutions.

A key policy implication of the auditor general’s findings is the urgent need for more robust consequence management mechanisms. Despite repeated calls from the auditor general for the introduction of more stringent penalties for municipalities that fail to implement audit recommendations, little progress has been made. The auditor general’s reports from 2010 onwards have consistently emphasised the need for legislative reforms to empower the auditor general with enforcement powers, including imposing penalties and referring cases of financial misconduct to law enforcement agencies. 

But the legislative framework remains inadequate, limiting the auditor general’s ability to hold municipalities accountable. Strengthening the Public Audit Act to grant the auditor general more extraordinary enforcement powers is essential for improving accountability and ensuring audit recommendations are taken seriously.

Another critical policy implication is the need to enhance the capacity of municipal leadership to implement the auditor general’s recommendations effectively. The auditor general’s reports have repeatedly identified weak leadership as a significant contributor to governance failures in municipalities. For example, the 2018-19 audit noted that many municipal leaders lacked the necessary skills and knowledge to manage their municipalities effectively, leading to poor governance outcomes. Addressing this issue requires a concerted effort to build the capacity of municipal leadership through targeted training and development programmes. This includes enhancing the technical skills of municipal managers and senior officials and fostering a culture of accountability and ethical leadership.

In addition to these reforms, there is a need to improve public engagement and transparency in implementing the auditor general’s recommendations. The auditor general’s reports have highlighted the importance of involving citizens in monitoring municipal governance to enhance accountability and transparency. Public awareness campaigns to increase understanding of the auditor general’s findings and the importance of audit recommendations can be crucial in mobilising citizen participation in this process. 

Encouraging citizens to take an active role in monitoring the implementation of audit recommendations through mechanisms such as community scorecards and public hearings helps ensure that municipal leaders are held accountable for their actions.

The persistent governance failures identified by the auditor general underscore the need for a comprehensive review of the current community-based monitoring (CBM) framework. The auditor general’s findings suggest that the existing CBM tools are not effectively addressing the governance challenges facing South Africa’s municipalities. This calls for rethinking the CBM framework to include more dynamic, accessible and technology-driven solutions that can enhance citizen engagement and improve the implementation of audit recommendations. By leveraging the power of social media and other digital platforms, the government can create more effective channels for citizen participation and feedback, thereby strengthening the overall governance framework.

Policy recommendations

Several key policy actions are necessary to address the challenges of implementing the auditor general’s recommendations. First, there is a need to strengthen monitoring and evaluation (M&E) mechanisms in municipalities to ensure that the auditor general’s recommendations are implemented effectively. This can be achieved by establishing dedicated M&E units in municipalities to track the implementation of audit recommendations and report directly to municipal councils. These units should be equipped with the necessary resources and authority to enforce compliance, including the ability to escalate issues to higher levels of government if necessary.

Second, the legislative framework governing municipal accountability must be strengthened to ensure that there are real consequences for non-compliance with the auditor general’s recommendations. This includes amending the Public Audit Act to grant the auditor general more extraordinary enforcement powers and introducing new regulations requiring municipalities to take corrective action in response to audit findings. 

Introducing penalties for non-compliance, including fines and the possibility of criminal prosecution for those responsible for financial misconduct, would serve as a strong deterrent against poor governance practices. The auditor general’s reports from 2010 to 2022 consistently advocate for these measures, yet implementation has been slow, underscoring the need for urgent legislative action.

Third, capacity building and leadership development should be prioritised to enhance the ability of municipal leaders to implement the auditor general’s recommendations effectively. This includes investing in targeted training and development programmes for municipal managers and senior officials, improving their technical skills and fostering a culture of accountability and ethical leadership. The recurring findings of leadership failures in the auditor general’s reports from 2010 through 2022 highlight the critical need for this intervention. 

Addressing the issue of political interference in municipal appointments is also crucial to ensuring that leadership positions are filled based on merit and expertise rather than political considerations.

Finally, there is a need to enhance public engagement and transparency in implementing the auditor general’s recommendations. Public awareness campaigns to increase understanding of the auditor general’s findings and the importance of audit recommendations can play a crucial role in mobilising citizen participation in this process. Encouraging citizens to take an active role in monitoring the implementation of audit recommendations through mechanisms such as community scorecards and public hearings helps ensure that municipal leaders are held accountable for their actions. Additionally, leveraging social media and other digital platforms can create more effective citizen participation and feedback channels, strengthening the overall governance framework.

Dr Lesedi Senamele Matlala is a lecturer at the University of Johannesburg’s School of Public Management, Governance and Public Policy, College of Business & Economics.