The South African Local Government Association (SALGA) has welcomed signs of improvement in municipal audit outcomes, saying the gains recorded during the 2024/25 financial year provide a strong foundation for the incoming seventh administration of local government.
The remarks follow the release of the consolidated local government audit outcomes report by the Auditor-General of South Africa (AGSA) on Wednesday.
SALGA President Bheke Stofile said while municipalities have not yet reached the desired standard, the latest report points to encouraging progress and highlights interventions that are beginning to yield results.
“The sector is not yet where we want it to be in so far as municipal audit outcomes are concerned, however, we do take note of what the AGSA calls ‘positive shoots’ that are emerging,” Stofile said.
SALGA noted a significant decline in disclaimer audit opinions, regarded as the most adverse audit outcome, from 29 municipalities in the 2020/21 financial year to just eight municipalities in 2024/25. It said the next local government term should aim to eradicate disclaimers entirely.
Compliance with financial reporting requirements has also improved substantially, with more than 98% of municipalities submitting annual financial statements on time during the 2024/25 financial year. For the first time, all 257 municipalities produced annual performance reports.
SALGA attributed some of the gains to its Municipal Audit Support Programme (MASP), which has expanded from assisting three municipalities in 2021/22 to supporting 18 municipalities and two municipal entities in the current financial year. Municipalities participating in the programme reduced audit findings by as much as 47%, while at least five municipalities achieved improved audit outcomes.
The association singled out several municipalities for maintaining clean audits since the 2016/17 financial year, including Midvaal Local Municipality, Cape Winelands District Municipality, Overstrand Local Municipality, Witzenberg Local Municipality and Cape Agulhas Local Municipality.
Despite the improvements, SALGA expressed concern that 39% of municipalities still received audit outcomes below the unqualified audit standard, citing ongoing weaknesses in governance, financial health and compliance with legislation. The association also noted that some metropolitan municipalities regressed during the 2024/25 period due to supply chain management failures, financial sustainability challenges and non-compliance with laws and regulations.
SALGA reiterated its call for stricter consequence management, saying municipalities must act decisively against financial misconduct and recover mismanaged funds.
The association further warned that municipalities face mounting financial pressures, with consumer debt exceeding R484 billion as of 31 March 2026, undermining their ability to provide essential services such as electricity and water.
SALGA also highlighted concerns over what it described as a structural funding imbalance, noting that municipalities deliver nearly 46% of government services while receiving only 9.1% of nationally raised revenue.
Looking ahead to the 2026 local government elections and the seventh administration, SALGA said it plans to intensify efforts to strengthen governance and institutional capacity through initiatives such as the Integrated Councillor Induction Programme, which will be rolled out immediately after the elections. The programme, developed in partnership with the National School of Government, aims to equip newly elected and returning councillors with skills in ethical leadership, oversight and financial accountability.
SALGA said it remains optimistic that sustained political commitment and targeted support will help increase the number of municipalities achieving clean audits and improve service delivery for communities across South Africa.