1008577374__20260316__0 Auditor-General Tsakani Maluleke wants municipal officers to be held accountable for incurring unauthorised, irregular, wasteful and fruitless expenditure.
Image: Thobile Mathonsi / Independent Newspapers
South Africa’s mounting municipal financial crisis is coming under sharper scrutiny, with the National Treasury signalling a tougher stance against officials linked to staggering losses amounting to nearly R151 billion.
At the centre of the push is a renewed focus on accountability — not just exposing wasteful spending, but recovering losses directly from those responsible.
According to Tsakani Maluleke, municipalities must now begin recovering portions of the R151 billion in unauthorised, irregular, fruitless, and wasteful expenditure (UIFWE) accumulated across the country’s 257 municipalities.
Breakdowns from Auditor-General reports paint a stark picture: R137 billion in irregular expenditure, R8.5 billion unauthorised, and R5.27 billion classified as fruitless and wasteful.
National Treasury has made it clear that existing legislation already provides the tools to act — particularly Section 32 of the Municipal Finance Management Act (MFMA), which governs how municipalities must deal with such expenditure once it has been identified.
“Section 32 of the MFMA establishes the legal framework governing municipalities’ handling of UIFWE once it has been identified. The section does not primarily regulate how such expenditure is prevented,” Treasury said.
Crucially, Treasury emphasised that the law is built on a principle often overlooked in practice: that public losses should not simply be absorbed by municipalities when individuals are responsible.
“Section 32 of the MFMA is based on the principle that municipal resources must be protected and that losses should not be automatically absorbed by the municipality when individuals are responsible for causing them.
“It introduces a statutory liability structure that complements, rather than replaces, common-law remedies and other legislation.”
This means Section 32 does not stand alone. It must be read alongside labour law, criminal law, the Municipal Systems Act, supply chain regulations, and financial misconduct procedures — forming a broader accountability framework aimed at enforcing consequences.
“The section, therefore, operates as part of a broader accountability system rather than as a stand-alone provision,” Treasury added.
The MFMA also clearly defines who can be held liable: political office-bearers, accounting officers, and municipal officials — with responsibility tied directly to deliberate or negligent conduct.
“It identifies political office-bearers, accounting officers, and officials as potential responsible persons and links liability to deliberate or negligent conduct. The subsection also confirms that statutory liability under the MFMA exists in addition to any liability arising from common law or other statutes,” Treasury said.
Treasury stressed that municipalities must now move beyond merely reporting irregular spending and instead identify specific individuals whose actions contributed to the losses.
The push for accountability has been welcomed in some political quarters. The Democratic Alliance in Johannesburg said the updated MFMA circular strengthens efforts to recover funds, particularly in cases where goods or services were not delivered.
“Among others, this now allows for UIFW recovery if goods/services were not delivered. In Johannesburg, the city is facing an accountability crisis under the ANC-led coalition,” the party said.
The DA warned it would escalate action if necessary.
“The DA will not accept this as the status quo and will not hesitate to start opening criminal cases against officials and politicians as per Section 173 of the MFMA, which deals with criminal liability relating to financial misconduct, providing allowances for criminal prosecution as a result of failures,” it said.
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