The FW de Klerk Foundation notes National Treasury’s decision to withhold transfers to non-compliant municipalities and Parliament’s call for their urgent compliance. These developments confirm what has become crystal clear: Many municipalities across South Africa faces a deep and persistent governance crisis.

The Auditor-General’s 2024–25 report shows only limited progress in improvement in municipal audit outcomes and continued widespread non-compliance with the law. Irregular expenditure remains a serious concern. Since 2021/22, municipalities have incurred R145,21 billion in irregular expenditure, 87% of which is attributable to non-compliance with procurement and contract management requirements. Treasury’s intervention follows repeated failures by municipalities to meet their legal obligations despite ongoing support and assistance.

The Foundation’s research points to the root causes of this crisis: Weak financial oversight, political interference, unstable coalition governments and the consistent failure to enforce existing laws. Poor audit outcomes, conflicts of interest and persistent non-compliance reflect a culture in which accountability is too often absent.

“Municipal failure is not an abstract governance problem,” says Christo van der Rheede, Executive Director of the FW de Klerk Foundation. “It affects the daily lives of residents. When municipalities fail, essential services deteriorate, economies collapse and public trust declines. These outcomes are inconsistent with the Constitution’s value of open, accountable and responsive government.”

Daniela Ellerbeck, an attorney and the manager of the Foundation’s Constitutional Rights Programme, says that the solution lies in implementing the law consistently and impartially. “The Foundation has consistently called for consistent consequence management, including criminal prosecution where appropriate and personal liability for serious misconduct. Municipal administrations must be professionalised through merit-based appointments and coalition governments strengthened through transparent and binding agreements. And the public must have access to a single online platform that tracks performance, procurement and accountability.”

Van der Rheede adds that: “The Auditor-General’s findings make it clear that this is not primarily a resource problem. It is a governance problem. Treasury’s decision to impose tangible consequences on municipalities that have failed to comply with the law, places real pressure on municipalities, but it also demonstrates that persistent failures in governance have consequences. Accountability cannot remain optional when public funds and essential services are at stake.”

Ellerbeck concludes: “Restoring municipalities requires a renewed commitment to constitutional values. Transparency, accountability and capable institutions are essential. Above all, the law must be applied impartially and consistently.”

The Foundation urges government to act decisively to enforce existing laws, restore constitutional governance and rebuild public confidence in local government.

ENDS