South African municipalities recorded a rise in unauthorised, irregular, fruitless, and wasteful expenditure (UIFWE) to R268.13 billion in 2024/25, up from R264.10 billion the previous year, according to the National Treasury’s latest report, reflecting systemic failures in financial management and oversight across local government structures.

Financial Audits Reveal Systemic Failures

The Auditor-General’s 2024/25 report found that none of the country’s eight metropolitan municipalities received clean audits, highlighting widespread weak financial discipline and persistent service delivery failures. Auditor-General Tsakani Maluleke stated, “Municipal finances are severely troubled and even though funds are constrained, mayors, councils and municipalities are displaying little fiscal discipline,” during the report’s release in May 2025.

In July 2026, the National Treasury froze equitable share transfers to 60 local councils due to ongoing financial mismanagement, stemming from irregular expenditure amounting to R145.21 billion. The Treasury further cited failures in internal controls and weak consequence management as primary causes for the worsening state of municipal finances.

Experts And Historic Reports Emphasise Leadership Crisis

The 2022 Municipal Financial Sustainability Index previously identified 107 municipalities at risk of financial dysfunction, attributing these risks to weak governance and ineffective management. Harlan Cloete, speaking to SABC News, linked the crisis directly to local leadership: “It all comes down to leadership, ethical and accountable leadership. If you have a mayor who is interested in the job, then you have good performance.”

National Treasury officials, responding to the most recent data, acknowledged that the Auditor-General’s consolidated 2024/25 local government audit outcomes largely corroborate their own findings of persistent weaknesses in municipal financial management. The lack of accountability among municipal officials and insufficient consequence management mechanisms remain central challenges.

The Treasury and Auditor-General continue to call for improved leadership ethics and stronger financial controls to restore municipal financial health and ensure reliable delivery of basic services to communities. The forthcoming budget cycle will test the implementation of these recommendations under close national scrutiny.