South Africa’s municipalities have failed to recover billions in public funds due to poor record-keeping and weak oversight committees, a National Treasury official has conceded, even as unauthorised, irregular, fruitless and wasteful spending climbed to more than R268 billion.
The National Treasury’s 2024/25 MFMA compliance report reveals a sharp rise in financial misconduct, with the total figure rising by R4 billion in the last year alone. The report also warns that more of this money is being written off instead of recovered, while fewer officials are facing disciplinary action.
Wayne McComans, the National Treasury’s Chief Director for MFMA Implementation, acknowledged the system is struggling to hold wrongdoers accountable.
“What we found in practice is that more often than not there’s poor record-keeping in municipalities, which means that when the municipal council wants to investigate, documents are missing and that makes the investigation difficult,” McComans said.
He pointed specifically to the Municipal Public Accounts Committees, the structures legally mandated to investigate the recoverability of losses. “More often than not, this structure is quite weak. They’re weak because they’re not being supported by the administration. The reshuffling of councillors is also impacting on the functionality of this key structure.”
When asked whether the system sends a message that malfeasance goes unpunished, McComans agreed. “It does send that particular message,” he said. He noted that while municipalities lose the opportunity to discipline officials who leave before investigations conclude, the law requires those cases to be reported to the South African Police Service. However, he admitted “a very significant weakness” exists in forcing municipalities to make those criminal referrals.
The Treasury has begun using constitutional powers to stop financial allocations to non-compliant municipalities as a consequence-management tool. McComans said this remedy “is to a large extent bearing some fruits that will probably be seen down the line.”
Despite the grim picture, McComans pointed to gains: financial statement submission compliance has increased from 91% to 98% since 2021, and municipalities have reported about R5 billion in savings under cost containment regulations introduced in 2019.
On the issue of excessive overtime spending, which the report identifies as a fiscal risk, McComans said overtime itself is not unlawful but is being abused as a “backdoor salary supplement.” He urged municipalities to introduce controls such as requiring accounting officer approval for overtime or implementing shift systems.
“Ultimately the responsibility is with the municipality to make sure they have proper controls in place,” he said.