The only Free State metro has failed to receive an unqualified audit with or without findings. Instead, the troubled metro could only receive a qualified audit with findings. The financial troubles of the metro have landed it under serious scrutiny by the national government and led to it being placed under administration.

According to the Auditor-General, Tsakani Maluleke, only seven Free State municipalities – except the metro – received unqualified audits.

These municipalities include the Lejweleputswa, Thabo Mofutsanyana, and Xhariep District Municipalities.

Mangaung, the Metsimaholo, Nala, Letsemeng, Fezile Dabi, Matjhabeng, and Dihlabeng Local Municipalities all received qualified audit opinions with findings.

Maluleke says the Qwaqwa-based Maluti-A-Phofung is the only municipality in the province that has a disclaimer audit report. No municipality received adverse findings.

Seven municipalities in the province, including the troubled Kopanong, Mantsopa, and Masilonyana Local Municipalities, are yet to have their audits finalised.

Recently, Maluleke said the Metro Municipality in the Free State is among several struggling municipalities in the country, which are said to be in a dire financial position.

ALSO READ: Mangaung Metro among municipalities in a dire financial position

In her report, she says the financial position of 70 (29%) of the 241 municipalities where the AG completed audits, was so dire that they had to disclose significant doubt about their ability to fully operate in the future.

Maluleke says these municipalities included the Tshwane and Mangaung metros in Gauteng and the Free State. Maluleke says these two metros were responsible for 10% of the total local government budget and service delivery to 9% of the households in the country.

The Mangaung Metro is still under the national government's administration after failing to recover from its financial woes.

ALSO READ – #BreakingNews: Mangaung stripped of its powers by the national government

The metro was placed under administration in 2019,  following its failure to perform the most basic service delivery functions.

OFM News previously reported that Free State municipalities – including the Mangaung Metro and Ngwathe, Metsimaholo, Moqhaka, and Matjhabeng Local Municipalities – are not complying with the Department of Water and Sanitation's Green Drop report of April 2022.  

Maluleke also said these municipalities failed to take reasonable measures to prevent pollution or degradation of the adjacent environment or water resources.

ALSO READ: Ailing Free State municipalities flagged by Auditor-General

“Local government is financially distressed due to reduced revenue and funding, and that municipalities were not prudently spending the limited funds available. Many of these municipalities made this disclosure multiple times over the term of the previous administration.  This means that they were not fully operational for many years as a result of their financial position. Typically, these are the municipalities that do not pay Eskom and water boards on time and do not deliver services at the required level."

She says overall, 33 municipalities have a better audit outcome than they did in 2020/21, while 29 have a worse outcome.

Maluleke has also expressed concern that the number of clean audits decreased, mainly due to the instability that occurred with the transition to the new administration.

She says the internal performance disciplines are not institutionalised – when the political transition occurs, the administrative functions must continue to fulfill their duties.

“Municipalities with a clean audit status managed 29% of the expenditure budget of the local government. Two metros fall in this category, namely Ekurhuleni (Gauteng) and Cape Town (Western Cape).

“The total number of municipalities with clean audit opinions decreased slightly, as more municipalities lost their clean audit status than improved to clean audit status. The regressions were due to instability in key positions and inadequate monitoring and review of controls relating to compliance.  The Western Cape continued to lead with the highest number of municipalities with clean audit opinions," Maluleke says.

OFM News