Auditor-General Tsakani Maluleke Slams Failing Municipalities at Local Government Indaba 2025: ‘Lives Left in Limbo’ Amid R31 Billion Waste
South Africa’s municipalities are in deep trouble, with Auditor-General Tsakani Maluleke delivering a harsh wake-up call at the Local Government Indaba 2025 in Midrand. She warned that despite billions poured in since 1994, poor governance and wasteful spending have left citizens without basic services, turning democratic promises into broken dreams. Cooperative Governance and Traditional Affairs Minister Velenkosini Hlabisa echoed her concerns, calling for a shift from paper compliance to real accountability. The two-day event at Gallagher Convention Centre, running from 2 to 3 October 2025, brings together leaders to tackle these issues head-on, with outcomes set to shape the future of local government ahead of the 2026 elections.
The indaba, themed around building resilient communities, comes as public anger boils over service failures like water shortages and crumbling roads. Maluleke and Hlabisa stressed that without urgent fixes, the gains of the past three decades risk being lost. With President Cyril Ramaphosa addressing the gala dinner, the gathering marks a key moment for reflection and action in a sector plagued by debt, skills gaps, and corruption.
A Moment of Reckoning: Maluleke’s Stark Warning on Municipal Failures
Speaking at the indaba on Thursday, Maluleke said the gathering could not be treated as symbolic, but must be seen as a “moment of reckoning” for the state of service delivery. “This is not just a ceremonial milestone. It is a moment of reckoning, a moment to ask: What have we built? What is broken? And what must now become?”
She reminded delegates that since 1994, local government has been the face of South Africa’s democratic dividend, where the promise of a better life is either fulfilled or deferred. Maluleke listed undeniable progress, including more than 5 million subsidised houses, over 80% household access to water, electricity, and sanitation, and over R500 billion already mobilised for infrastructure.
But these gains are undermined by weak governance, poor financial management, and unethical leadership. In the 2023/24 municipal audit cycle, only 16% of municipalities (41 councils) received clean audits. R31 billion in unauthorised expenditure was recorded. Water and electricity losses amounted to R37 billion. Municipalities spent R1.47 billion on consultants, often with little value delivered.
“These are not just numbers. They are missed opportunities. They are broken promises. They are lives left in limbo,” Maluleke said.
She pointed out that fruitless and wasteful spending hit R5.26 billion, up from R4.9 billion the year before, while irregular expenditure stayed high at R25.2 billion. Many councils failed to submit financial statements on time, with 32 municipalities regressing in audit outcomes and only 14 improving.
The Auditor-General also revealed that her office has identified over R8.7 billion in financial losses through the material irregularity process since 2019, but less than half of those cases have been resolved. This process, aimed at stopping losses early, has clawed back R1.2 billion and prevented R3.5 billion in further harm, but slow action from accounting officers remains a big hurdle.
Human Resource Crisis: Vacant Posts and Ineffective Oversight
Maluleke also warned of a human resource and capacity crisis. Fifty municipalities had vacant CFO positions in 2023/24. Two hundred-and-nineteen municipalities relied on consultants for financial reporting, yet many still submitted poor-quality statements. Audit committees and internal audit units were ineffective in more than 80% of municipalities.
“We must professionalise local government. We must attract and retain skilled professionals. We must build municipalities where engineers, planners, and financial managers want to work and are empowered to lead,” she urged.
This skills shortage has led to over-reliance on outsiders, with consultants often failing to transfer knowledge, leaving councils no better off. In provinces like Free State and North West, disclaimed audits – where records are so poor no opinion can be given – remain common, with 10 municipalities stuck in this category for over five years.
Maluleke called for a renewed social compact between government and citizens. “We must move from a culture of tolerance for wrongdoing and misconduct to one of intolerance. Ethics must be the heartbeat of every municipality. Consequence management must be swift, fair, and consistent.”
She stressed that without ethical leadership and strong oversight, even the best plans fall flat. This includes enforcing the Municipal Systems Act more strictly to ensure qualified appointments and performance reviews.
Hlabisa’s Call: Accountability as the Backbone of Governance
At the same time, Cooperative Governance and Traditional Affairs Minister Velenkosini Hlabisa told the indaba that municipalities remain the backbone of democratic governance and service delivery, but their failures reflect a deep culture of weak accountability.
“Since the last summit in 2022, we’ve implemented the District Development Model to build resilient, sustainable, and connected communities. Over the next two days, we’ll assess progress, challenges, and reimagine our nation’s future.”
Hlabisa said the latest audit outcomes show slight improvement but reinforce long-standing failures. While 41 municipalities achieved clean audits, another 99 municipalities received unqualified opinions with findings, and 16 municipalities received adverse opinions. Several municipalities, particularly in the Free State, have still not submitted financial statements for audit.
“In addition, 20% of municipalities face uncertainty about their ability to continue operating as going concerns,” he said.
He highlighted how unstable coalitions in hung councils have worsened matters, leading to service breakdowns and financial woes. In metros like Johannesburg and Tshwane, political fights have stalled budgets and projects, leaving residents without basics.
Hlabisa pushed for stable metros to save the economy, noting that big cities drive over 60% of national GDP. He proposed a national dialogue with business chambers to fix challenges and build partnerships.
Both leaders agreed that the culture of local government must shift from compliance on paper to accountability in practice. Hlabisa noted the District Development Model’s successes in some areas, like coordinated infrastructure in districts, but admitted rollout has been uneven due to funding shortfalls.
Broader Context: Three Decades of Progress Undermined by Systemic Issues
Since democracy dawned, local government has transformed from apartheid-era structures to 257 municipalities serving 60 million people. But chronic problems persist: over R200 billion in consumer debt, with households owing R129 billion and businesses R32 billion.
In the 2023/24 cycle, 153 municipalities were in financial distress, up from previous years. Provinces like Eastern Cape and Limpopo lag, with no clean audits, while Western Cape leads with 25.
The indaba builds on past efforts like the 2022 summit and the White Paper review, aiming for a “reset” through better intergovernmental coordination. Delegates discussed professionalising the sector, with calls for minimum qualifications for managers and stricter vetting.
President Ramaphosa, in his gala address, urged unity to fix the “broken” system, promising more support via the Presidential Infrastructure Coordinating Commission.
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