South Africa's National Treasury found persistent financial misconduct and internal control failures across 257 local municipalities in a recent compliance report [1].
These findings highlight a systemic breakdown in local governance that threatens the transparent use of public funds. When internal controls fail, the risk of corruption and waste increases, directly impacting the delivery of essential services to citizens.
The report focused on the financial year spanning July 2024 through June 2025 [1]. It identified a recurring pattern of supply-chain-management non-compliance and a failure to maintain adequate internal oversight [1, 2, 3].
A primary driver of this instability is the lack of formal accountability structures. The Treasury said that only 127 out of 257 municipalities had signed a system of delegation [1]. Such systems are critical for defining who has the authority to spend public money, and who is responsible for those decisions.
Further complicating the oversight process is a lack of cooperation from local authorities. Approximately 23% of municipalities did not respond to inquiries regarding their delegation systems [1]. This silence suggests a significant gap in administrative transparency, a hurdle for auditors attempting to track the flow of municipal budgets.
National Treasury officials said that weak oversight and low accountability allow these failures to persist [1, 2, 3]. Without signed delegations and strict adherence to the Municipal Finance Management Act (MFMA), the Treasury said financial misconduct remains a systemic issue in most municipalities [2, 3].
“Only 127 out of 257 municipalities had signed a system of delegation.”
The failure of nearly half of South Africa's municipalities to implement signed delegation systems indicates a structural void in local government accountability. This lack of formal authorization frameworks makes it difficult to prosecute financial misconduct, as the lines of responsibility are blurred. Consequently, the National Treasury's findings suggest that legislative frameworks like the MFMA are not being enforced at the local level, leaving public coffers vulnerable to mismanagement.
