WILLIAM GUMEDE | Solutions for fixing municipalities are obvious, but political will is lacking

The reasons for the financial and service delivery failures of South Africa’s municipalities are well known, and the solutions are obvious, yet there is a clear lack of political will to tackle these failures head-on, because it would mean breaking entrenched patronage, partisan political and criminal interests.

Only 34 of South Africa's 257 municipalities had clean financial audits in the 2022/23 financial year. It's a decline from the previous low of only 38 municipalities receiving clean audits in the previous financial year. Cape Town was the only metro city with clean finances.

South Africa's auditor-general Tsakani Maluleke released the local government audit outcomes before parliament's portfolio committee on co-operative governance last week. Maluleke said the audit outcomes showed very little meaningful improvement from previous years. The auditor-general worried that municipal councils are indifferent to the financial crisis in the municipalities they oversee.

Very few municipalities comply — or have the skills to do so — with legislation regulating their operations. For example, 86% receive material compliance findings, meaning they did not comply with laws governing municipal finances. This was a further regression from 85% in the previous year.

Some municipalities do not submit their finances by the legislated date. Almost half of all municipalities do not comply with laws governing municipal financial management.

The information provided in the financial reports of half of municipalities is so poor, unreliable and irrelevant that it is difficult for the auditor-general or outsiders to assess their performance or introduce corrective action. This means that the financial reports of half of municipalities are not credible.

Municipal financial planning and budgeting across the board is poor. Money is often spent by municipalities when they have no budgets for it — and on unfunded mandates. Many municipalities use resources inefficiently, wastefully and nonsensically. Contract management in many municipalities are deficient. Municipal assets are neglected. There are high levels of nonpayment to suppliers, including to Eskom, water boards and service providers. In the municipal contracts selected by the auditor-general for audits, the majority, 72%, were deficient.

Financial skills are lacking in municipality management, among councillors and among the oversight institutions, such as municipal audit committees. The use of financial reporting consultants are widespread — but ineffective.

In the main, the poor audit outcomes are because of corruption, incompetence and waste. Financial management, financial planning and financial reporting skills are absent in most municipalities. Financial skills in most municipalities are also dire. Basic understanding of finances are often also missing among elected and appointed municipal officials. But oversight over municipal finance is also lacking in failing councils.

Poor financial management, planning and reporting go hand in hand with poor service delivery, infrastructure collapse and rising costs for citizens and businesses. The financial failures reduce the money available for public services, infrastructure and social services, and increase costs to citizens and companies.

Sadly, the reasons for the financial and service delivery failures of the country's municipalities have been repeated over and over.

Municipal government needs to be professionalised. The administration of municipalities are highly politicised. There has to be a firewall between the political and administrative interface of municipalities. Merit-based, rather than political-based or patronage-based appointments, are crucial.

In failing municipalities even the performance management of employees and contractors is politicised, corrupt or neglectful. Governing party deployees in the municipal public services or trade union-connected staff are often not performance-managed and are protected if they do wrong.

Residents, civil society organisations and opposition parties not involved in governing must hold elected and public officials accountable, participate in ward committees and Integrated Development Programme (IDP) processes.

Local government contracts must be cleaned up. Municipal contracts to deliver service must be done based on merit, competence and honesty.

The auditor-general has decried the lack of effective intervention by national and provincial governments to help distressed municipalities that fail to deliver services or which cannot put together a budget.

The constitution allows a provincial government to step in when a municipality cannot fulfil an obligation in terms of the constitution or municipal legislation. The province can take over the service or dissolve the municipal council and appoint an administrator until a new council is elected, if a municipality fails to deliver services, cannot raise the funds to put together a budget or faces a financial emergency.

Sadly, in most cases of municipal failures, the provinces and national government are slow to intervene. When they do intervene, it is politicised — failing to hold ANC peer leaders at municipal level accountable. For example, in municipalities put under administration, the same elected councillors and municipal managers who were responsible for the failures, often remain in their posts after the interventions.

Yet it is crucial to remove the councillors and the managers responsible for bringing the municipality to its knees and hold councillors and municipal managers personally responsible for financial losses. Wrong-doers must be held accountable, no matter their political connectedness.

Residents, civil society organisations and opposition parties not involved in governing must hold elected and public officials accountable, participate in ward committees and Integrated Development Programme (IDP) processes.

Ward committees, chaired by a councillor and consisting of 10 representatives elected from the community in the ward, have in many cases been captured, with proxies of governing parties masquerading as independent “community” members. Politicised ward committees cannot hold municipalities accountable. Very few municipalities have functional IDP structures and processes. And where IDP processes do take place, residents are also largely marginalised.

Communities must hold failing municipal leaders and officials accountable. As a start, residents and local community and civil society organisations must take back control of ward committees away from political patronage interests. Similarly, they should get actively involved in the IDP processes. Local residents must protest against financial mismanagement, corruption and service delivery failure.

Most importantly, they must not vote in corrupt, incompetent and uncaring individuals and parties, if they want municipalities to perform better. Sadly, though municipalities fail for years, voters continue to vote for the same corrupt, incompetent and uncaring political parties and leaders, based on past, colour, solidarity or ideology considerations.

This means there are no incentives for these corrupt, incompetent and uncaring parties and leaders to muster up the political will to break entrenched patronage, partisan political and criminal interests, which block efforts to improve the performance of municipalities. 

• William Gumede is Associate Professor, School of Governance, University of the Witwatersrand and author of Restless Nation: Making Sense of Troubled Times (Tafelberg).