Kannaland Local Municipality has earned the dubious title of being the Western Cape’s worst-performing local government, receiving a disclaimed audit opinion for three consecutive years running, according to the latest Auditor-General’s report.
The Auditor-General’s Consolidated General Report on Local Government Audit Outcomes for 2023/24 has exposed persistent failures in governance, accountability, and service delivery across seven municipalities nationwide – with Kannaland standing as a stark exception to the Western Cape’s otherwise stellar municipal performance record.
And due to these significant challenges with financial management and ongoing disruptions to the provision of basic services, the Western Cape Government has again instituted an intervention at the municipality.
What a disclaimed audit opinion really means
“When a municipality receives a disclaimed audit opinion, it means that it could not provide us with evidence for most of the information in its financial statements,” the Auditor-General’s report explains. “Therefore, we could not express an opinion on whether its financial statements were credible or determine what it had done with the funds that it received for the year.”
This financial lack of transparency leaves residents in the dark about how their tax money is being spent and often results in the deterioration of essential services like water, electricity, and waste management.
R3.48 billion budget cannot be accounted for
Seven municipalities across four provinces have consistently received disclaimed audit opinions, managing a combined expenditure budget of R3.48 billion in 2023/24. This includes R780 million in equitable share funding and R420 million in conditional grants – public money that cannot be properly accounted for.
The failing municipalities include: Eastern Cape: Makana and Sundays River Valley in the Eastern Cape, Nketoana in the Free State, Ditsobotla, Lekwa-Teemane, and Ratlou in the North West and Kannaland.
These seven councils are responsible for delivering services to 182 207 households, with five serving as water providers and six as electricity providers.
Kannaland: An anomaly in the Western Cape’s success story
The Western Cape is widely regarded as South Africa’s best-governed province, with 17 of the country’s 25 municipalities achieving consecutive clean audits located in the province. The North West, Limpopo, and Free State provinces recorded zero clean audits.
However, Kannaland Municipality, which encompasses the towns of Ladismith, Calitzdorp, and Zoar, serving just under 32 000 residents, represents a glaring exception to this provincial success story.
Systemic failures despite intervention attempts
Despite its small size, Kannaland has demonstrated a consistent inability to meet basic governance standards. The municipality was placed under the municipal debt-relief programme in August 2023 and has been under provincial intervention since November 2024.
Provincial treasury workshops yielded little improvement, with only junior staff attending financial statement training sessions. Even assistance from the South African Local Government Association consultant in 2023/24 failed to produce meaningful progress.
Material non-compliance across all areas
The Auditor-General identified material non-compliance with legislation across all seven municipalities every year since 2021/22. Violations span critical areas including procurement and contract management, revenue handling, strategic planning, performance management and human resource management.
The impact of Kannaland’s mismanagement extends beyond financial irregularities. The Ladismith refuse dump, which also services Zoar 28km away, has become essentially a mound of plastic waste exposed to the elements – a visible symbol of the municipality’s service delivery failures.
Western Cape Government steps in with recovery plan
Today (21 July) the Western Cape Government published a draft Financial Recovery Plan (FRP) for Kannaland Local Municipality and is now inviting residents to have their say on how to fix their failing council.
Following years of serious challenges with financial management and ongoing disruptions to the provision of basic services, the Western Cape Government is now intercepting and a support plan will also be developed to address the governance challenges that have plagued the municipality.
“I want to encourage the residents of Kannaland to submit their inputs on the FRP. It is crucial that the people who are directly impacted by this plan have a say on its content,” said Deidré Baartman, Western Cape Minister of Finance.
“I would like to thank the teams from National Treasury, Provincial Treasury, and the municipality for working together in developing this draft FRP. This draft plan sets out practical steps on how the municipality can improve its financial standing in order to improve service delivery to the people of Kannaland,” said Baartman.
