The Department of Cooperative Governance and Traditional Affairs (COGTA) has released its 2024/25 annual report, showing that municipalities recorded R268 billion in unauthorised, wasteful spending. That is a rise from R264 billion the year before, indicating that poor financial control remains a major problem across South Africa’s local authorities.
The department defines the figure as money that was spent without proper approval, was not correctly accounted for, or in some cases was outright stolen. It does not mean every rand was lost to fraud, but the amount reflects weak bookkeeping, inadequate oversight and a systemic lack of consequence management.
In response, the cabinet has approved a Final Revised White Paper on Local Government, which will be launched by President Cyril Ramaphosa on 22 October 2026. The paper seeks to raise the bar on professionalism, accountability and financial sustainability in municipalities.
Key reforms in the revised White Paper
Among the changes, the automatic appointment of municipal candidates after a 14-day silence from the national department is removed. Any senior official now requires explicit financial approval from the national Minister before taking office. The White Paper also introduces mandatory qualification checks for all advertised municipal jobs, with COGTA monitoring postings from the first notice to ensure only suitably qualified candidates proceed.
After the next local government elections, new municipal councils will audit staff competence. Municipal Manager contracts will end one year after the election, and any manager found lacking will be redeployed to a role that matches their capacity, avoiding lengthy court battles. Mayors will have to review Section 71 financial reports each month to spot waste early, and any irregularities involving corruption or theft must be reported to law enforcement for criminal prosecution.
Minister Velenkosini Hlabisa highlighted the stark regional gap in wasteful spending. The North West province recorded the highest level at over R71 billion, followed by Gauteng with more than R53 billion. By contrast, the Western Cape reported the lowest figure at R2.77 billion. He warned that cronyism, cadre deployment and the appointment of unqualified staff have driven the problem.
For small and medium-size enterprises, the reforms matter because municipal service delivery, water, electricity and waste collection, directly affects operating costs. Better financial management could reduce the tax burden and improve the reliability of services that local businesses depend on. While the White Paper does not guarantee immediate change, it signals a shift toward stricter oversight that could create a more predictable environment for entrepreneurs.
Read more about the upcoming reforms in our Regulatory & Policy coverage.
In the 2024/2025 reporting period, 178 municipalities set up disciplinary boards, yet the number of dismissals or sanctions remained low because the councils themselves, rather than the national government, make those decisions. This arrangement has limited the impact of disciplinary measures, allowing many officials who contributed to wasteful spending to remain in post. The source notes that the scarcity of concrete actions stems from the independence granted to municipal councils over internal disciplinary outcomes, which has been a point of criticism in addressing financial mismanagement.
The revised White Paper introduces a ministerial vetting step for every Municipal Manager appointment. After local government elections, each recruitment must pass this new approval, and any existing manager’s contract will terminate one year after the election, creating a narrow window for assessment. This process ensures that the national Minister gives explicit financial consent before a manager assumes office, aligning senior leadership with the competency standards outlined in the reforms.
Job advertisements for municipal positions will now be tracked from the moment they are first published. COGTA will review each posting to verify that the qualification criteria meet the mandatory standards before any candidate can be interviewed or appointed. By intervening early in the recruitment cycle, the department aims to prevent non-compliant requirements from advancing, thereby reducing the risk of unqualified staff entering municipal structures.
Mayors are required to examine Section 71 financial reports on a monthly basis, a routine that is intended to surface irregularities quickly. When the reports reveal instances of corruption or theft, the municipality must formally open a criminal case with law enforcement, shifting the response from internal review to the judicial system. This procedural change seeks to ensure that financial misconduct is addressed promptly and with the appropriate legal authority.
Minister Hlabisa emphasized that municipalities with competent Chief Financial Officers, Municipal Managers and senior managers consistently achieve clean audits and avoid the massive wasteful spending highlighted in the report. He linked the presence of qualified staff directly to lower levels of unauthorised expenditure, suggesting that professionalisation and strict qualification checks are central to reversing the trend of financial mismanagement across provinces.
