'Unacceptable': R1. 4 billion spent on consultants as service delivery continues to falter for South Africans

IOL News

11-06-2025

Johannesburg residents queue for water as ongoing water shortages persist pointing to a lack of planning and service delivery issues. the The latest Auditor-General's 2023/24 report found that 59% of municipal financial statements contained material misstatements - despite more than R1.4 billion being spent on consultants.
Image: Bhekikhaya Mabaso / Independent Newspapers
Cogta Committee chairperson Dr Zweli Mkhize has lambasted the deepening governance and financial crises in South African municipalities.
Speaking at a committee briefing, Mkhize cited widespread failures in financial management, leadership, and service delivery. He called for urgent and coordinated action across all tiers of government.
Describing local government as 'under immense strain,' Mkhize referenced the Auditor-General's 2023/24 report, which found that 59% of municipal financial statements contained material misstatements - despite more than R1.4 billion being spent on consultants.
'It's unacceptable that such exorbitant spending yields so little value,' Mkhize said, noting that municipalities already employ permanent staff for this work.
He revealed that 113 municipalities are operating with unfunded budgets. 'This amounts to planning for failure. It undermines infrastructure delivery, leads to poor project execution, delays, cost overruns, and often substandard workmanship,' he said.
Only 16% of municipalities met basic governance standards, while 84% failed to meet the conditions of a national debt relief programme.
'This is not just an audit report. It's a mirror held up to our governance structures,' Mkhize said, blaming poor audit outcomes on political failures, lack of accountability, and a growing culture of impunity.
He criticised the continued use of uncompetitive procurement practices and illegal awarding of contracts to government employees:
'The rules exist, but enforcement is failing. This must stop.'
Mkhize announced that Parliament will intensify oversight, especially in the worst-performing municipalities.
'The community is no longer interested in excuses,' he said. 'We are calling for performance, consequences, and the prioritisation of quality service delivery.'
Mkhize also highlighted the need for structural reform over crisis management:
'We cannot afford to normalise failure. We must shift from analysis to action, from recognition to consequence.'
Mkhize noted that the Portfolio Committee on Cogta will continue to lead efforts to restore the credibility, capability and constitutional purpose of local government through firm oversight and unwavering commitment to service delivery.
In a statement and response to the 2023/2024 audit outcomes, the South African Local Government Association (Salga) welcomed the Auditor-General's report and praised municipalities showing improvement.
Salga spokesperson Tebogo Mosala said: 'The increase in clean audits from 34 in 2022/23 to 41 in 2023/24 is commendable and reflects the commitment of municipal leadership to uphold financial discipline.'
SALGA noted that 55% of municipalities received unqualified or clean audits, accounting for over R378 billion (66%) of the local government budget, an indication that a majority of public funds are handled with 'a degree of accountability.'
However, Mosala was clear that serious problems remain: 'Salga remains deeply concerned that 45% of municipalities received audit outcomes that fall below the standard. The non-submission of financial statements and recurrence of fruitless and wasteful expenditure must be decisively addressed.'
Salga echoed the call for stronger leadership, highlighting that improved audit outcomes correlate with capable and ethical appointments in key roles like municipal managers and CFOs. Mosala added that municipalities must also address the R405 billion owed to them by consumers, including other government departments, which severely compromises their financial health.
Salga also stressed the need to reform the fiscal framework, pointing out the mismatch between municipalities' responsibilities and the only 9.1% of nationally raised revenue they receive.
Adding to the concern, Matthew George, ActionSA's Parliamentary Head of Media, criticised the chronic over-reliance on external consultants:
'ActionSA has consistently expressed our opposition to the widespread use of external consultants to perform functions that should be carried out by professionals employed within municipalities. The continued reliance on such consultants is a damning indictment of the failure to build and retain internal capacity in local government.'
George argued that the solution is already available through existing frameworks:
'The solution is clear: the employment of skilled financial administrators, as already provided for in existing frameworks, and an end to the appointment of unqualified and unscrupulous individuals. These appointments often serve only to obscure financial reporting and shield financial mismanagement from proper scrutiny.'
While supporting legislative and oversight reform, George emphasised enforcement as the real missing link:
'While ActionSA recognises the potential value of legislative or oversight reforms, we believe that the greater issue lies in the lack of enforcement of existing mechanisms, which for too long have been treated as suggestive rather than obligatory.'
He added that ActionSA is committed to pursuing legislation on consequence management, along with further measures aimed at professionalising and depoliticising the public service.
Dr Harlan Cloete, Research Fellow at the Centre for Gender and Africa Studies at the University of the Free State, provided deeper insight into the systemic nature of the crisis.
On municipalities' reliance on consultants, Cloete said:'There's a genuine crisis of confidence within municipalities. You have people in positions who are not necessarily qualified. Political instability spills over into the administration, creating more dysfunction. There's a lack of both capacity and capability.'
He noted that despite the Skills Development Act being in place since 1998, municipalities have failed to cultivate talent from within.
'That we cannot grow our own is really an indictment on the system.'
On building internal capacity, Cloete pointed to integrated development plans (IDPs) and workplace skills plans as existing tools.
'You have to start with what you have. I've seen people move from interns to CFOs through structured internal development. The frameworks are there,the problem is execution.'
Cloete stressed that training alone is not enough:'Training is often seen as the beginning and end. But what's needed is coaching, mentoring, and long-term institutional development.'
He warned of the consequences for sustainability and credibility:'You cannot outsource responsibility. It's easy to bring in consultants to solve short-term problems, but the Skills Development Act calls for a long-term view. Leadership matters. Where there's a committed CFO, municipal manager, or mayor, things can turn around.'
Cloete also referenced his recent research into the Municipal Staff Regulations of 2021.
'We conducted 240 interviews across 32 municipalities. These regulations aim to professionalise local government. But many municipalities aren't listening or acting. There's little consequence management.'
He noted the review of the White Paper on Local Government, but added: 'It identifies nine key challenges. What's missing is the tenth: the institutional ability to manage the development of people. We have good people, but they don't get the opportunities. This lack is what perpetuates the dependency on consultants.
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