The South African Human Rights Commission (SAHRC) is concerned over the “persistent lack of fiscal discipline in the country's municipalities”, warning that financial mismanagement directly undermines the constitutional rights of citizens.

Reacting to the Municipal Finance Management Act (MFMA) 2024/25 consolidated audit outcomes released by Auditor-General (AG) Tsakani Maluleke on Wednesday, the commission noted that despite marginal improvements in some areas, the overall state of local government finances remains a major threat to socioeconomic development.

The AG’s report highlights a few positive shifts. The number of municipalities operating under the worst-case disclaimed audit opinions dropped from 15 in the previous financial year to 8. Additionally, municipalities achieving unqualified opinions with findings rose from 99 to 117.

However, the SAHRC cautions against complacency. The most severe regression occurred at the highest levels of local governance, in which the number of municipalities achieving clean audits fell from 41 to 39.

Not a single metropolitan municipality in South Africa achieved a clean audit for the 2024/25 financial year while in both the North West and Free State provinces not a single municipality has managed to secure a clean audit since the 2020/21 financial year, the commission noted.

It warned that metros failing to manage their finances means millions of vulnerable residents bear the brunt.

A major point of contention for the SAHRC is the institutionalised reliance on external financial consultants. The AG's report revealed that municipalities spent a staggering R1.61-billion on third-party consultants, but have not produced meaningful material change to their audit outcomes.

The commission is calling for an immediate end to this financial drain by urging municipalities to aggressively close internal skills and vacancy gaps.

The SAHRC stressed that if consultants are hired, strict performance mechanisms must be legally enforced to ensure that skills are actively transferred to permanent municipal staff, rather than fostering permanent dependency.

The true cost of municipal dysfunction is measured in human suffering, the commission said. The AG recorded R6.36-billion in fruitless and wasteful expenditure over the financial year.

This directly correlates with deteriorating service delivery across the country, the commission added.

“It cripples the State’s ability to provide clean water, reliable sanitation, safe roads, and electricity, leaving marginalised and impoverished communities entirely uncushioned from economic hardship,” it said.

WHITE PAPER PROMISE?

The SAHRC said it is encouraged that the draft White Paper on Local Government proposes various reforms tackling, among others, wastage of funds.

In its submission, the SAHRC has called for the final White Paper to strengthen enforceable accountability systems, rights-based budgeting obligations, transparent procurement mechanisms, meaningful public participation standards, and measurable consequence management frameworks.