The number of South African municipalities that received clean audits decreased in 2022, with the Auditor-General telling lawmakers on Wednesday that a dearth of skills, inadequate leadership as well as a lack of accountability in local governance is contributing to ongoing service delivery failures.

Auditor-General Tsakani Maluleke was presenting her findings on the audit outcomes of SA's 257 municipalities to Parliament, which showed only 38 received clean audits, down from 41 in 2021.

More than half of the clean audits came from the Western Cape, while no municipalities received clean audits in the Free State or the North West.

"The deterioration of institutions in the local government sphere is unfortunately continuing," she said. 

"Our teams have witnessed the impact of water supply issues, and experienced directly the impact of untreated wastewater," she said. "They have seen that in far too many communities there is inadequate sanitation". 

She said the deaths from Cholera in Hammanskraal was "a harsh reminder" of the impact of "continued neglect".

In the year to end June 2022, the AG identified R25-billion in unauthorised expenditure. 

The vast majority of municipalities were not budgeting enough for the upkeep of infrastructure, she said. Instead, money was being spent on salaries, which was crowding out other spending. 

Despite billions of rands in funds flowing through municipalities, the AG said that in many cases infrastructure was neglected and crumbling.

The root causes of poor service delivery was inadequate skills and capacity, a lack of leadership, and a lack of accountability and consequences. 

"We have got to start setting a culture where there is an insistence on performance [and] integrity, and an attention to matters of transparency and accountability". 

Maluleke said that around half of municipalities had approved unfunded budgets. And a quarter were not certain that they could continue as going concerns. 

The AG acknowledged that what she as saying was not new. 

"Much of what I am saying will be familiar to you," she told MPs. 

"The real problem we will place at the door of those that lead the municipalities."