Home » Featured » A-G report pinpoints R32billion ‘irregular’ expenditure

A-G report pinpoints R32billion ‘irregular’ expenditure

  • A pathetic 7,3% of municipalities get a clean audit
  • Report reveals R32 billion of irregular expenditure, R7 billion more than 2017/2018
  • False declarations by suppliers and non-disclosure by employees amounted to R644 million
  • Cost of consultants to assist in financial statement preparation=R1,26 billion, even though only +/-R500 million was justified

THERE is not much cheer in the Auditor General’s latest report on the performance of local government, however the Drakenstein Municipality has once again been acknowledged for the way it runs its financial affairs. The Municipality is the largest municipality in South Africa and the only one of the country’s 19 secondary cities and eight metros to receive a clean audit opinion for the 2018/19 financial year.

In the Consolidated General Report on the Local Government Audit Outcomes released recently by Kimi Makwetu, Auditor-General of South Africa, for the 2018/2019 financial year, Drakenstein Municipality is described as one of the municipalities that display leadership with a desire and commitment towards clean administration.

Out of a total of 257 municipalities countrywide, the Auditor-General singled out only 20 that told a story of how well a municipality is managed. Thirteen of these municipalities are in the Western Cape and include Drakenstein Municipality, the Cape Winelands and West Coast District Municipalities, and the Bergrivier, Cape Agulhas, Cederberg and Hessequa Municipalities.

Makwetu acknowledged the efforts of those municipalities that tell the story of disciplined spending that achieves value for money; meticulous billing and collecting practices; assets that are maintained and safeguarded; careful investments and savings for emergencies and future projects; and commitments to creditors and the community being honoured.

“The best practices at these municipalities included a stable leadership that is committed to a strong control environment and effective governance. Continuous monitoring of audit action plans in order to timeously address any audit findings and a proactive approach to dealing with emerging risks were also common features at these municipalities,” says Makwetu.

According to the Consolidated General Report on the Local Government Audit Outcomes, Drakenstein Municipality is one of five municipalities that illustrate “a leadership with a desire and commitment towards clean administration. The management is responsive to our findings while specifically addressing the root causes identified; they also respond with the same rigour to internal audit findings as they do to external audit findings. They all have functional municipal public accounts committees and councils who carry out their duties effectively and hold their respective municipalities accountable.”

“The safe and clean hands that can be relied upon to look after the public’s finances in local government are few and far between”

The same however cannot be said for the vast majority of municipalities in South Africa. The report narrates a story of how the efforts of the diligent municipalities has been completely overshadowed by the overall regression in audit outcomes. In total, 91% of the municipalities did not comply with legislation, some failing to submit a report, which according to the regulations, is illegal. The level of irregular expenditure rose by R7 billion from the previous financial year to R32 billion.

Last year, Drakenstein Municipality was officially rated by National Treasury the Number One most financially healthy city in South Africa and in the Western Cape. In June this year, Drakenstein Municipality’s Internal Audit function underwent an external quality assurance assessment that assessed the function’s compliance with the Standards and Code of Ethics. It was awarded Generally Conforms, the highest rating on a scale of three ratings prescribed by the Institute of Internal Auditors.

Drakenstein Municipality covers Paarl, Wellington, Gouda, Hermon, Saron and Simondium.

Irregular expenditure & consultants fees – the culprits by Province.


Province Logged Plus flagged for audits finalised after the report cut-off date Consultants fees for financial reporting
Eastern Cape


R2,5 bn R4,2 billion R118 million
Free State


R1,4 bn R341,6 million R46 million


R1,7 bn R3,3 bn R341 million
KwaZulu Natal


R6,5 bn R17,2 million R95 million


R1,5 bn + R1,2 bn VBS loss. R594 million R249 million


R1,09 bn R358 million R98 million
Northern Cape


R390 m


  R47 million
North West


R3,7 bn R1,8 bn R227 million
Western Cape


R2,7 bn


R0 R42 million



To enquire about Cape Business News' digital marketing options please contact

Related articles

WC outperforms other provinces on service delivery

The DA in the Western Cape welcomes the release of the “non-financial census of municipalities” report by StatsSA. The report, which measured service delivery of...

Electricity wheeling and trading explained

THE South African landscape and electricity supply industry is changing rapidly, and as the market evolves, the incentive for municipalities and businesses to procure...


Over R100-billion to be invested in data centres in South Africa 

By Larry Claasen Amazon Web Services (AWS) plans to invest R46-billion in Cape Town by 2029. THE setting up of hyperscale data centres in South Africa...


Cape Business News
Follow us on Social Media