The Auditor-General’s (AG) 2024-’25 consolidated report on local government reveals a Northern Cape municipal landscape defined by marginal audit improvements overshadowed by severe financial distress and deteriorating service delivery infrastructure. While the province has successfully moved several municipalities out of the worst audit categories, residents continue to suffer from unreliable services, including sewage overflows and massive utility losses.

The DA in the province in its reaction on the AG’s report, has described the latest findings as “nothing but doom and gloom”.

Improvement shown

The most significant success in the province is the marked reduction in disclaimed audit opinions, which dropped from four in 2020-’21 to just one in 2024-’25. This improvement was driven by strengthened internal controls and substantial support from provincial coordinating departments.

A notable highlight is that the Frances Baard District Municipality remains the only municipality in the province to achieve a clean audit status, a position it has sustained for five consecutive years.

Furthermore eight municipalities, including !Kheis, Joe Morolong, and Renosterberg, showed improvement from previous years. !Kheis, in particular, successfully moved from a disclaimed to a qualified opinion with support from the provincial treasury.

The timely submission of financial statements for auditing improved significantly from 65% in 2020-’21 to 94% in 2024-’25.

Despite these audit gains, the AG warned that many improvements may not be sustainable as they rely heavily on year-end fixes rather than embedded daily controls.

Financial woes

The province’s financial health is in a critical condition. Twenty-two municipalities (71%) adopted unfunded budgets, meaning they committed to spending money they do not have. Fruitless and wasteful expenditure reached R393,55 million, with 97% of municipalities incurring such costs.

Debt collection is failing, with an average of 62% of consumer debt classified as irrecoverable.

Municipalities manage a total expenditure budget of R13,03 billion, but collectively owe R5,63 billion to Eskom and R933,92 million to water boards.

The province continues to exhibit a heavy reliance on external financial consultants. Twenty-six municipalities spent R178,3 million on these services, yet 97% of those municipalities still submitted financial statements with material misstatements in the very areas the consultants were hired to handle. At Emthanjeni, an MI was issued regarding payments to consultants for work that should have been performed by municipal officials.

Infrastructure collapse

The report paints a dire picture of the state of basic services. Municipalities spent only 2% of the value of their infrastructure on repairs and maintenance, far below the 8% norm. This neglect has led to massive utility losses: Sol Plaatje lost a staggering 67% of its water and 26% of its electricity purchased, resulting in a loss of R326,29 million.

Failed infrastructure has caused sewage overflows and health risks in Sol Plaatje, !Kheis, and Kareeberg.

All five water and sanitation projects audited in the province were delayed, often due to grant funding being diverted to pay salaries or Eskom.

Material irregularities

The AG has identified 49 material irregularities (MIs) in the province, 24 of which relate to material financial losses totalling R464,97 million. Many accounting officers have been slow to respond to these irregularities, often due to leadership instability or inadequate investigations. Notably, Kamiesberg regressed back to a disclaimed opinion, the worst possible outcome, due to a failed financial system migration and a lack of properly trained staff.

The AG called on the provincial leadership to move beyond procedural compliance and focus on impact-driven governance.

Key recommendations include strengthening MPACs to effectively investigate and enforce consequence management; reducing consultant fees by building internal capacity within finance units and prioritising infrastructure maintenance to curb revenue losses and improve the “lived realities” of residents.

“Sustainable improvements,” the report concludes, “will require councils and municipal leadership to enforce consequences, stabilise key posts, and monitor delivery against funded plans”.

‘Province regressing’

Gizella Opperman, DA MPL, stated that financial mismanagement and poor decision-making continue to “rob residents… of basic services”.

The DA highlighted several critical points regarding the province’s trajectory. The party pointed out that the province has regressed from five clean audits in the 2020-’21 financial year to just one clean audit in 2024-’25.

Opperman noted that residents in towns like Kimberley, Ritchie, Jan Kempdorp, and Warrenton are all too familiar with “rivers of sewage,” dilapidated roads, and water shortages resulting from this mismanagement.

Opperman criticised district municipalities for failing to provide the technical expertise and support needed to mitigate “manmade disasters” at the local level.

The party highlighted that the R3,26 billion in irregular expenditure and R1,29 billion in fruitless and wasteful expenditure far exceed the national equitable share and grant allocations, making it impossible for municipalities to meet their constitutional duties.

Regarding the high spend on consultants, the DA noted that the AG found no evidence of skills transfer at 16 municipalities, despite the R180 million expenditure.