Municipalities still falling short on financial compliance, Treasury says

Economics Editor

Financial management remains subpar in many municipalities, with unauthorised irregular fruitless and wasteful expenditure increasing to R268.13bn in the 2024/2025 financial year from R264.1bn previously, the National Treasury says.

Non-compliance with supply chain management regulations is still a headache, with many municipalities either failing to update their policies or not developing them at all, it said in its latest Municipal Finance Management Act (MFMA) compliance report.

“This assessment of municipalities’ compliance with the MFMA in 2024/25 reveals a governance environment that remains fragile and uneven, despite incremental progress in areas such as cost containment and submission rates of annual financial statements,” it said.

“Persistent systemic weaknesses — including unstable leadership, inadequate internal controls and weak consequence management — continue to undermine financial integrity and service delivery.”