Parliament, Friday, 26 June 2026 – The Portfolio Committee on Cooperative Governance and Traditional Affairs (COGTA) has raised concern about municipalities’ reliance on consultants to prepare financial statements and reports for audit purposes. COGTA called for a comprehensive plan to reduce the use of consultants and build internal capacity in municipalities to carry out these responsibilities.
The committee was briefed recently by the Auditor-General (AG) on the local government audit outcomes for 2024/25, in terms of the Municipal Finance Management Act. It congratulated the women leaders in the Office of the Auditor General South Africa (AGSA), describing their roles as a milestone.
In her presentation, the AG, Ms Tsakani Maluleke, reported that the number of municipalities using consultants to prepare their financial statements has increased from 179 10 years ago, at a cost of R586 million, to 225 currently, at a cost to the state of R1,6 billion. And the situation is worsening, Ms Maluleke said.
The AG noted that people are employed to conduct municipalities’ financial affairs but lack the skills to do so, forcing the municipality to use consultants to prepare financial statements. She also noted with concern the absence of any plan to reduce the reliance on consultants and emphasised that despite the use of consultants, municipalities are still submitting poor financial statements because the consultants’ work is not reviewed by anyone in the municipalities.
The committee also heard that, overall, municipalities’ general financial health is a big concern, with most showing signs of financial pressures. The AG called on mayors, councils, national and provincial executive authorities and legislatures to build capable institutions with coordinated intergovernmental support to strengthen and stabilise municipal governance, and ensure effective use of internal audits and audit committees
She also called on municipal and provincial executive authorities and legislatures to capacitate local government by supporting and implementing local government professionalisation initiatives. This can be achieved by making appointments that apply with the regulations, with targeted skills development, retaining scarce skills and instilling a culture of ethics and accountability through a shared vision of responsiveness and consequence management.
In welcoming the AG report, the committee Chairperson, Dr Zwelini Mkhize, noted areas of concern within a more encouraging picture. “It gives a clear sense of how municipal finances are being managed and how service delivery issues are being impacted upon. It is a very good guide in terms of how we, as committees of Parliament, will be following up in ensuring accountability and consequence management, and on how to improve the performance of these municipalities,” he said.
The Chairperson also observed that the committee has raised the problem of the use of consultants many times before. “There has to be a campaign to drive out consultants, get a clear plan of their replacement and get a commitment to build institutional capacity for each of these municipalities. A lot of the work done by consultants should be performed by internal personnel,” Dr Mkhize said.
He also noted that the committee will continue to ensure that the consultants issue receives proper attention.
The committee will also intensify its oversight and focus on other areas of concern raised by AG, which include the non-submission of financial statements, adverse audit outcomes, disclaimers, unfunded budgets, non-improvement of audit outcomes, procurement irregularities, management of infrastructure grants and revenue collection and expenditure management.
AGSA highlighted the impact of the intensified oversight that Parliament’s joint committees – the Portfolio Committee on COGTA and the Standing Committee on Public Accounts – have undertaken, along with support from the national and provincial spheres of government in enforcing proper governance.
The AGSA noted the improvement in municipalities’ submissions, which reached an historic 98% for the first time. Meanwhile, disclaimer opinions declined from 29 to a lowest-ever eight municipalities, with seven repeat disclaimers.
The committee agreed with the AG’s assertion that the capacity and integrity of elected counsellors is the most important factor in ensuring accountability and improvement of audit outcomes.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON COOPORATIVE AND TRADITIONAL AFFAIRS, DR ZWELINI MKHIZE.
For media enquiries or interviews with the committee Chairperson, please contact:
Name: Sakhile Mokoena
Cell: 081 705 2130
E-mail: smokoena@parliament.gov.za
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