Municipalities in fiscal turmoil as appropriations committee scrutinises financial mismanagement

IOL News

a day ago

The Standing Committee on Appropriations has raised an alarm over the dire financial state of metropolitan municipalities
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The Standing Committee on Appropriations has raised an alarm over the dire financial state of metropolitan municipalities during a recent engagement with the Mangaung Metropolitan Municipality in the Free State, as part of discussions surrounding the 2025 Division of Revenue Bill.
The committee's session focused on the pressing fiscal challenges exacerbated by unfunded mandates and poor financial management practices that continue to plague these vital urban areas.
One of the major points of contention was the late submission of critical documents by the City of Johannesburg, which arrived a mere 30 minutes before the meeting commenced, limiting the committee's ability to review and discuss its contents thoroughly.
In response, the committee has resolved to reconvene with Johannesburg next week in hopes of addressing these concerns in detail.
Particular emphasis was placed on the financial practices at the Mangaung Municipality, where several directorates are reportedly overspending their approved annual allocations by an alarming 10 to 12 per cent.
Much of this overspend can be traced back to bloated employee costs and outsourced contracted services. Committee members expressed their alarm at the continuing trend of outsourcing fundamental municipal responsibilities, arguing it undermines institutional capacity and invites potential misuse of funds by service providers.
Committee chairperson Mmusi Maimane did not mince words, highlighting the pervasive threat of corruption that continues to inflate service delivery costs.
'What should cost one rand ends up costing three, four or even five rands due to corrupt practices,' he emphasised.
The committee is firmly of the view that addressing corruption is essential to restoring financial integrity and ensuring that funds are used effectively for public services.
In a stern reminder of the consequences of mismanaged resources, the committee pointed to Mangaung's failure to achieve unqualified audit outcomes for the last three consecutive years.
The Auditor-General's reports have consistently pointed to significant financial management deficiencies, including weak internal controls and governance failures that undermine public trust.
Members of the committee urged Mangaung to clarify its outstanding debts to Eskom, emphasising the urgency of reporting on any progress made in tackling these fiscal obligations.
Maimane further lamented the broader decline of metropolitan municipalities across the country, particularly focusing on the deteriorating conditions in inner-city areas.
He warned that such decline leads to a profound loss of housing opportunities and vital economic infrastructure, exacerbating already strained urban living conditions.
As part of its discussions, the committee issued a pointed reminder to municipal officials to prioritise basic service delivery, which includes repairing potholes, installing traffic lights, ensuring reliable water access, and maintaining clean sanitation facilities in informal settlements.
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