R116 billion disappeared into thin air in South Africa

Over the last 3 years, municipal councils have dealt with R117.93 billion in irregular expenditure. 99% of this, R116 billion, was written off rather than being recovered.

This was revealed in the Auditor General’s (AG’s) 2024-25 Consolidated General Report on Local Government Audit Outcomes.

Auditor-General Tsakani Maluleke said there has been limited progress and that South Africa’s local government remains concerning.

“Only 39 municipalities achieved clean audits, and 38 municipalities have regressed over the last four years,” she said.

“The audit outcomes and performance of the eight metros continue to decline, affecting the daily lives of millions of people.”

Of particular concern was the growth in irregular expenditure. “R40 billion was incurred in 2024-25 alone,” Tsakani said.

Non-compliance with procurement and contract management legislation accounted for 87% of this total.

“Irregular expenditure caused by deviations from procurement and payment legislation and processes should remain a critical concern for all stakeholders,” she said.

The Auditor-General said that it serves as a tangible indicator of the failure to uphold the principles of good governance.

She added that officials who flout the rules, even those who are blatantly corrupt, seldom face consequences.

“Municipalities are slow to investigate allegations of financial and procurement misconduct and fraud indicators,” she said.

She added that they do not investigate or properly address unauthorised, irregular, fruitless, or wasteful expenditure.

“This has resulted in recurring non-compliance and delays in financial loss recoveries, disciplinary processes and referrals to law-enforcement agencies,” she said.

“These delays stall the entire accountability cycle and may result in financial losses becoming irrecoverable.”

This has resulted in one of the most concerning findings in the Consolidated General Report on Local Government Audit Outcomes report.

Since the 2021–22 financial year, municipal councils have dealt with R117.93 billion in irregular expenditure.

However, 99% of this irregular expenditure, R116.28 billion, was written off rather than being recovered.

“Only R1.21 billion has been or is in the process of being recovered, and R0.43 billion has been condoned over the same period,” the report stated.

Irregular expenditure incurred