South Africa’s gangster municipalities

Municipalities have lost over R5 billion to material irregularities over the past few years, with many people warning that officials from South Africa’s municipalities are intentionally taking money from the state coffers.

Governance expert Sandile Swan told 702 that the legislation safeguards against a disproportionate amount of material irregularities is sufficient. However, there are no consequences for government officials who intentionally abuse their positions.

“The legislation itself is enough. The problem has been that the people installed as councillors and mayors and, at times, the senior managers at municipalities are doing this intentionally,” he said.

“In other words, we are running a gangster state. So, when you have people who do not want to do the right thing, no matter which law you pass, it’s not going to help anything.”

Swan’s comments come after City Press reported that a North-West municipality paid R38 million for a prefabricated structure used as a call centre. 

The publication reported that, despite spending just over R38 million on the centre, the district municipality is also paying around R1.4 million a month for the equipment used in the call centre.

The Standing Committee on Auditor-General said in a statement last week that 268 material irregularities of non-compliance and suspected fraud were recorded between 2019 and 2023.

These irregularities have resulted in an estimated R5.19 billion of material financial losses.

Public administration expert Dr Harlan Cloete told 702 that material irregularities refer to any non-compliance with legislation, fraud, theft, or breach of fiduciary duty identified during an audit performance.

“All these irregularities are in a basket that normally results in material or financial loss, misuse of public and material resources and that causes public harm,” he explained.

These irregularities often occur because many municipal councillors and administrators are “sleeping on the job”. “How else do we explain these bizarre spending patterns?”

While there are examples of people who have been convicted, Cloete said there is a lack of consequence and administrative and political will to prosecute these officials.

“The Auditor-General reports these findings year after year, and there’s no consequence,” he said.

“People that are supposed to be working are not working, and I don’t want to generalise, but if you look at the figures from the Auditor-General’s office, then there is reason to worry that there seems to be a lack of leadership in municipalities.”

Local government is an important institution in terms of servicing and meeting the direct needs of people in their respective districts.

However, other factors are hampering the local government’s ability to deliver. These factors include diminished human resource development, the accumulation of debt, and a lack of political and administrative will.

“I think the biggest of all of this is a lack of administrative and political will in the local sphere. There’s a lot of goodwill amongst our people, but that goodwill is not matched by administrative and political will,” Cloete said.

Swan said that while many municipalities have not achieved a clean audit in years, several others simply do not submit their statements for auditing.

This means that the R5.19 billion figure may not tell the full story, as there could be far more material irregularities that have simply not been audited or reported.

Heading for collapse

Recently, former President Kgalema Motlanthe warned that South Africa’s municipalities are heading for collapse, with 90% of them facing distress or dysfunction and 66 being completely dysfunctional.

Motlanthe said his foundation has focused on issues with local governments since 2019, as they are where the majority of service delivery failures are occurring. 

Furthermore, it is the sphere of government that is closest to the people and is “at the coalface of service delivery”, Motlanthe said. 

The former President urged the national government to drive municipalities to increase their efficiency and capacity. 

According to data from the Ministry in the Presidency for Planning, Monitoring, and Evaluation, 90% of municipalities face distress or dysfunction. 

Motlanthe said 66 of them are totally dysfunctional, and 163 are currently distressed. 

Data from the Auditor-General shows that 38 municipalities and only 2 out of 8 metropolitan areas achieved clean audits for the past financial year.

Furthermore, many of these municipalities are underspending their infrastructure grants from the National Treasury despite the dilapidated nature of municipal infrastructure.