Senior municipal officials in South Africa are prioritising service delivery over and above achieving clean audits, according to a survey by a leading fintech in municipal financial management solutions, Munsoft.
The study, which surveyed around 95 municipalities out of South Africa’s total 257, found that 65% of respondents ranked addressing core community needs as a higher priority than obtaining clean audit results.
“While clean audits are crucial, they do not inherently guarantee effective service delivery,” says Nicholas Maweni, CEO of Munsoft. “Several municipalities with clean audits still face substantial challenges in areas like infrastructure maintenance, water supply, and sanitation. This highlights that financial compliance must work in tandem with robust operational management to improve service delivery outcomes effectively.”
Overlooking financial controls in the pursuit of service delivery can lead to irregular expenditure and financial mismanagement. The Auditor-General’s reports have repeatedly highlighted instances where a strong focus on service delivery has resulted in unauthorised and wasteful expenditure – a consequence of insufficient financial oversight.
In her recent Consolidated General Report on Local Government Audit Outcomes, Tsakani Maluleke, auditor-general of South Africa, stressed: “I remain convinced that service delivery improvements in local government will be enabled by stable, capable, cooperative, accountable, and responsive municipalities delivering on their mandates – and by leadership creating a culture that values excellence and continuous improvement to bring about positive change in the lives of all South Africans.”
Audit outcomes, as outlined by the auditor-general, are based on a municipality’s compliance with financial reporting standards, performance objectives, and legislative requirements. A clean audit, therefore, indicates not only an unqualified financial opinion, but also an absence of significant findings on both performance reporting and legal compliance.
When municipalities neglect financial management, the delivery of critical services and government priorities suffers. Maweni notes that while focusing on service delivery is essential, it must be supported by strong financial management to ensure sustainable operations.
“In the long run, sustainable service delivery relies on a robust financial management system which ultimately contributes to improved audit outcomes,” Maweni says. “As municipalities navigate the complex landscape of service delivery, financial management, and governance it’s vital to strike a balance that meets community needs while upholding sound financial practices.
“This survey underscores the importance of strategic partnerships and innovative solutions to promote sustainable growth across our municipalities,” Maweni says.