Not one municipality in the Free State has received a clean audit opinion in the past six years, Auditor-General (AG) Tsakani Maluleke found in her office’s 2021/22 local government audit. 

The province also has a history of councils failing to submit financial statements on time. In 2021/22, there were eight municipalities in the province where audits were not completed by the submission date – up from seven in 2020/21. 

These municipalities are: Mafube, Mohokare, Masilonyana, Tokologo, Maluti-A-Phofung, Mantsopa, Nketoana and Kopanong.

Read more in Daily Maverick: Local government litany of woe — municipal decay and its dire consequences for service delivery

The AG report shows that most audit outcomes remained unchanged from 2020/21, with two municipalities improving and one regressing. The audit opinions for Moqhaka and Setsoto local municipalities improved from a qualified audit opinion to an unqualified opinion with findings. 

Mangaung metro mayhem

Mangaung metro slipped from an unqualified audit with findings to a qualified opinion in 2021/22 “because the council did not prioritise filling vacancies in the critical leadership positions of city manager and department heads, which lessened accountability within the metro, contributed to the lack of cooperation from employees in providing supporting documents for audit purposes, and enabled a continuing culture of impunity”, said Maluleke. 

The municipality became the first metro to be placed under administration in 2019 after service delivery fell flat. Manguang was under provincial administration for more than two years before it was placed under national administration in April 2022. 

Last year, National Treasury determined that the financial recovery plan prepared when the municipality was under provincial administration was outdated and a new plan was developed. Although several interventions are still underway, the AG said the situation in the metro is “unlikely” to improve in the short term “due to instability in the council” and a “high vacancy rate across the metro. 

In the 2021 local government elections, the ANC won a majority of 51 seats on the council. However, despite being the majority party, the ANC lost the speaker position to the opposition DA in March this year. The election of an opposition councillor into what was meant to be a key ANC position prompted the expulsion of eight ANC members – including the deputy mayor and former speaker – from the party.

Read in Daily Maverick: ANC wins court bid to block newly elected Mangaung metro mayor

While political in-fighting continues to rock the metro, the AG flagged Mangaung Municipality as one of the 11 municipalities in the province in a dire financial position. 

“Municipalities’ financial health continued to deteriorate and 11 municipalities (73%) disclosed a material uncertainty about whether they would be able to meet their financial obligations as they became due,” said Maluleke. The 11 municipalities are: 

• Dihlabeng Local Municipality
• Letsemeng Local Municipality
• Mangaung Metro Municipality
• Matjhabeng Local Municipality
• Moqhaka Local Municipality
• Nala Local Municipality
• Ngwathe Local Municipality
• Phumelela Local Municipality
• Setsoto Local Municipality
• Tswelopele Local Municipality
• Xhariep District Municipality

The AG said: “The current financial constraints are likely to be felt beyond 2022/23, as 80% of municipalities will need to use at least half of the 2022/23 budget to pay for spending in the current year.”

Fruitless and wasteful expenditure

Irregular expenditure remained high among Free State municipalities. In 2021/22, irregular expenditure in the province totalled R1.57-billion – 7% of a total budget of R22.43-billion. 

Additionally, the closing balance for irregular expenditure in the province increased from R9.18-billion in 2020/21 to R11.27-billion in 2021/22. 

Shoddy service delivery

Although municipalities planned for basic service delivery, the AG found “they did not achieve most of their planned targets for electricity, water and sanitation because of poor financial management and project management – with a resultant impact on the quality of services delivered to communities”.

Read in Daily Maverick: Three years on, Free State villagers still wait for toilets and plumbing

Mangaung metro achieved only 13% of its planned targets related to basic service delivery, the AG found. 

“Mangaung metro held public participation sessions with communities and considered their concerns, but did not prioritise all these concerns due to financial constraints,” read the report. 

“We found that while the metro planned for all 35 standardised performance indicators prescribed by the National Treasury on outcomes related to its core functions (electricity, housing, roads, water and sanitation), there was no visible impact on service delivery, as the metro reported achievements of zero in relation to planned services for seven of these indicators and excluded a further 12 from its performance report.”

Read more in Daily Maverick:

• Gauteng municipalities lose ground amid R30bn in irregular expenditure, says AG report
• ‘Poor management’: Just two of 27 Limpopo municipalities receive clean audits, AG calls on leaders to ‘take charge’
• Auditor-General slams Northern Cape municipalities’ ‘inability to manage their resources’
• Cape Town and Prince Albert pave the way with clean audits but problems persist in Beaufort West, Laingsburg and Kannaland
• How the best-run municipality in SA gets the numbers right

Another area of concern was that municipalities did not deliver on crucial infrastructure projects needed to reduce “significant service delivery backlogs and improve the community’s access to basic service delivery”.

Maluleke added: “All roleplayers in the accountability ecosystem must instil a sense of urgency to shift the culture in local government to achieve the desired outcomes and restore the confidence of the province’s people in their government.” DM