WC’s audit results reveal progress, but five municipalities remain under pressure

Western Cape Municipal Audit Outcomes 2024/25: A deep dive into financial health, movers, and shakers behind the scenes.

The Western Cape is a star player, with most towns managing their money well. But even the best can trip up! Some places are getting better, fixing old problems and making smart choices. Others are still struggling, making it hard to build new roads or keep taps running. The province is helping these towns get back on track, because good money management means better lives for everyone.

How are Western Cape municipalities performing financially?

Of the 30 Western Cape municipalities audited in 2024/25, 20 achieved spotless financial records, five received unqualified statements with minor findings, three had qualified statements, one a disclaimer, and one an adverse opinion. This 83% unqualified rate keeps the province at the top nationally for the seventh consecutive year.

Behind the Ledger – What the Figures Reveal, Who Rose, Who Stalled, and the Quiet Fixes Underway

The Scoreboard in One Glance

1. How 30 Councils Fell into Five Ranks

Of the 30 municipalities scrutinised by the Auditor-General, 20 walked away with spotless books, five earned an unqualified verdict yet carried blemishes, three received qualified statements, one drew a disclaimer, and one suffered an adverse opinion.

That 83 percent unqualified rate keeps the Western Cape at the top of the provincial rankings for the seventh year on the trot. Still, seventeen percent of the councils remain in trouble, proving that even the country’s star pupil still has bruises.

2. Why an “Unqualified” Can Still Feel Like a Yellow Card

The AG tests every council on three pillars: whether the annual financial statements are free of material errors, whether legislators were obeyed, and whether service-delivery targets stack up to evidence.

A clean sweep means all three boxes are ticked. When the report is “unqualified with findings,” the numbers are broadly fair yet cracks appear - procurement corners, overdue accruals or phantom asset registers.

3. Why the Headlines Matter to Residents

Smooth audits lower borrowing costs, keep grant taps open and give investors the confidence to fund water plants or solar parks. When numbers slide, potholes linger, taps run dry and rates rise to patch holes.

Comeback Stories and Quiet Victories

1. Beaufort West – Dusting Off After a Lost Decade

From 2016 to 2023 the Karoo council ricocheted between qualified and adverse opinions. Vacant CFO and internal-audit posts, plus a broken supply-chain desk, bled the books.

Provincial treasury parachuted in a chartered accountant as acting CFO, digitised contract folders and began joint mayor-speaker-treasury monitoring sessions every month. Irregular spending plunged from a restated R73 million to R21 million, 92 percent of suppliers now get paid within 30 days, and an independent audit committee met for the first time since 2017. The AG praised “a palpable shift in leadership tone.”

2. Cederberg – Returning to the Winner’s Circle

The Berg council last earned a clean sheet in 2021. A 2023 move merged three separate supply-chain units into one shared-services hub in Citrusdal, cutting red tape and tightening bid specs.

Seven percent of the operating surplus was parked in a “growth reserve” – a provincially-endorsed fund that commits spare cash to capital work rather than day-to-day bills. The AG rewarded the discipline with a clean audit.

3. Unsung Upgraders and the Marathon Men

Saldanha Bay and Stellenbosch nudged from unqualified-with-findings to clean by clearing old irregular-expenditure files and wrapping up asset-verification drives. Overstrand notched its 13th straight clean audit, the longest streak outside the metros.

The Troubled Five – Anatomy of a Slide

1. Bitou – Sun, Sea and Shaky Books (Plettenberg Bay)

The council slipped from unqualified to qualified after auditors found R98 million in unsupported capital accruals and cancelled a R14 million beachfront sanitation project, tagging the cost as fruitless and wasteful. Three mayors in two years left a leadership vacuum; provincial treasury has seconded two “fiscal cadets” for six months.

2. Prince Albert – Remote Location, Remote Data

Auditors could not verify R112 million worth of water infrastructure still logged as work-in-progress. The CFO chair has stood empty since October 2023; the local government department is bankrolling a three-year remote-work package to lure a qualified accountant who can serve from George or Beaufort West.

3. Theewaterskloof – Big Budget, Stubborn SCM Woes

With a R1.7 billion budget the council remained stuck at qualified after 48 contracts worth R120 million bypassed competitive bids. A new council resolution, effective April 2025, will force every tender above R10 million to clear a “pre-procurement gateway” that includes AG and treasury observers – a South African first.

4. Kannaland – When Paperwork Vanishes

For the second year running the AG issued a disclaimer, unable to confirm 62 percent of balance-sheet values, including R430 million in water and sewer plants. The municipality also missed nine months of financial returns. On 1 March 2025 the provincial Cabinet invoked section 139(1)(b), handing control to an Advisory Financial Board chaired by a retired judge.

5. Laingsburg – Adverse and Under Water

An adverse opinion means the financial statements themselves are materially misstated. Laingsburg overspent by R49 million on drought-relief boreholes without authorisation, runs an internal-audit unit that exists only on paper, and carries a net-current-asset deficit of R68 million. A turnaround plan signed late in 2024 will hive off bulk-water services into a joint venture with the Department of Water & Sanitation and the Central Karoo District until 2028.

How the Province Keeps Score – and Offers a Hand

1. Early-Warning Dashboards and SMS Alerts

The treasury tracks 15 financial and SCM indicators weekly; mayors receive an SMS when any metric flashes red. The idea is to stop small leaks from becoming floods.

2. CFO Mentors and Treasury Support Teams

Councils that regress or linger at qualified status receive a seasoned CFO mentor plus a Treasury Support Team for a full year. The 2024 adjustment budget ring-fenced R54 million to fund secondments, audit top-ups and peer-learning trips.

3. When All Else Fails – Section 139

Only when leadership dysfunction threatens basic services does the province step in. Kannaland is the first council to reach Tier 3 intervention since 2019.

Where Clean Books Lead – Roads, Water, Watts and People

1. Tracking Every Rand – Irregular, Conditional, Uncollected

Province-wide irregular spending fell from R1.1 billion in 2021/22 to R510 million in 2024/25. The Municipal Infrastructure Grant was spent at 92 percent, the best in the country, building 39 kilometres of new tar roads in the Overberg and cutting apple-farm logistics costs by seven percent.

Revenue collection inched up from 94.6 percent to 95.2 percent; Swartland piloted an AI tool that fires off demand letters on day 45 and trimmed arrears growth by twelve percent in twelve months.

2. Water and Watts on the Ground

Theewaterskloof and Overberg joined forces on a R900 million pump-station upgrade that pushes an extra 20 million litres a day toward Steenbras Dam.

Cederberg’s clean audit unlocked funding for a R320 million reverse-osmosis plant at Leipoldtville, adding 6.5 megalitres daily and pushing back Day-Zero clocks to 2031 under normal rainfall.

Stellenbosch closed wheeling deals with five independent power producers for 55 MW – one-third of the town’s peak demand – while Saldanha Bay now lets large users install up to 50 MW of embedded generation thanks to its squeaky-clean books.

3. People, Not Just Pipes

The Municipal Capacity Support Programme hired 60 engineers, 45 chartered accountants and 150 technical trainees in 2024/25. To keep skills from drifting toward metros, the province created “remote-first” co-working hubs in Worcester where finance and engineering staff can serve far-flung councils three days a week without uprooting families.

Tech, Trust and the Next Wave

1. Blockchain Grader Plates and Open Data

Mossel Bay glued tamper-proof digital tokens to high-value assets; an asset count that once took two months finishes in 48 hours. An open-data portal launched by the treasury lets residents track ward-level spending every month; traffic spiked after a local radio slot dubbed it “Ratepayer Reality Check.”

2. Citizens as Inspectors

The Western Cape Community Monitoring Network trained 420 volunteers to photograph leaking pipes or illegal water links. Beaufort West used the photos to shut 1,800 illegal connections, a move the AG singled out as “enhanced controls through civic engagement.”

3. Twin Towns and Learning Loops

A sister-municipality programme pairs clean-audit councils with regressed ones over six months. George mentors Bitou; Stellenbosch mentors Prince Albert. Provincial treasuries from Gauteng and KwaZulu-Natal toured the system in February 2025 for replication notes.

Clouds on the Horizon – and the 2025/26 Scorecard

1. The City Keeps Growing

An extra 110,000 residents arrive each year. Secondary cities such as Drakenstein and Saldanha Bay already feel sewer strain; economies of scale that underpinned clean audits may erode.

2. Weather and Wallets

Floods in the Overberg in June 2024 cost R540 million in emergency fixes. Disaster-procurement spikes irregular-expenditure tallies; municipalities want a special condonement window from National Treasury.

3. Green Finance Gap

Reliable audits open green-bond doors, yet South Africa has no pooled guarantee for 15-year municipal solar deals. Investors still price in sovereign-wrap risk.

4. Targets the AG Will Watch

Cut repeat material findings by half, keep in-year spending within five percent of adjusted budgets, and publish annual performance agreements for every senior manager with hard service-delivery KPIs.

If these targets feel ambitious, remember the province has already moved the needle from R1.1 billion in irregular spending to half that in just three cycles. As one municipal manager put it, “Clean audits are no longer the ceiling - they’re the floor we build on.”

What is the overall financial performance of Western Cape municipalities in 2024/25?

Of the 30 municipalities audited, 20 achieved spotless financial records, five received unqualified statements with minor findings, three had qualified statements, one a disclaimer, and one an adverse opinion. This 83% unqualified rate positions the Western Cape as the top province nationally for the seventh consecutive year.

Why are "unqualified with findings" audits still a concern?

An "unqualified with findings" audit means that while the financial statements are generally fair, there are still issues, often related to compliance with legislation. These can include problems with procurement processes, overdue accruals, or inaccuracies in asset registers. While not as severe as a qualified or adverse opinion, these findings indicate areas where councils need to improve their financial management and adherence to regulations.

How does good financial management benefit residents?

Smooth audits and strong financial management lead to lower borrowing costs for municipalities, ensuring continued access to government grants, and boosting investor confidence. This confidence translates into funding for essential infrastructure projects like water treatment plants or solar parks. Conversely, poor financial management can result in delayed infrastructure, dry taps, and increased rates for residents to cover budgetary shortfalls.

Which municipalities have shown significant improvement in their financial standing?

Beaufort West has made a remarkable comeback, addressing years of financial instability by digitising contracts, reducing irregular spending, and ensuring timely supplier payments. Cederberg returned to a clean audit by consolidating supply-chain units and investing operating surpluses into a "growth reserve." Saldanha Bay and Stellenbosch also upgraded from unqualified-with-findings to clean audits by resolving irregular expenditure and verifying assets.

What challenges are some municipalities still facing?

Bitou slipped to a qualified audit due to unsupported capital accruals and wasteful expenditure. Prince Albert struggles with unverified water infrastructure and a vacant CFO position. Theewaterskloof faces persistent supply-chain issues with numerous contracts bypassing competitive bids. Kannaland received a disclaimer for its inability to confirm significant balance-sheet values, leading to provincial intervention. Laingsburg received an adverse opinion due to significant overspending and materially misstated financial statements.

How does the province support municipalities in improving their financial management?

The Western Cape Provincial Treasury employs several strategies, including early-warning dashboards and SMS alerts for mayors to monitor financial indicators. They also provide CFO mentors and Treasury Support Teams for municipalities that are struggling. In severe cases of leadership dysfunction threatening basic services, the province can intervene under Section 139 of the Constitution, as seen with Kannaland. These interventions aim to prevent small financial issues from escalating into major problems and to build capacity within local government.