The scale of dysfunction in South Africa’s municipalities is not new. What is becoming increasingly clear, however, is that the reality is far worse than even pessimistic estimates suggested. Yet, as the extent of corruption and maladministration comes into sharper focus, accountability continues to lag.
In a recent briefing to the Standing Committee on Public Accounts (SCOPA), the Special Investigating Unit (SIU) reported on 19 municipal investigations – 15 completed and four ongoing – spanning 13 municipalities across the Free State, North West, Gauteng, and KwaZulu-Natal.
Alongside this, the SIU presented a consolidated summary of outcomes for the period 2012 to date. These include nearly R59 million identified for potential recovery, over R545m in contracts and administrative decisions set aside, and more than R1.14 billion in matters referred for civil litigation through the Special Tribunal. Actual recoveries thus far, however, amount to just R1.14m.
Notably absent from the summary is any indication of how many of the 362 matters referred to the National Prosecuting Authority (NPA) since 2012 have resulted in prosecutions or convictions.
Patterns of systemic failure
According to the SIU, the investigations disclose consistent patterns of governance failure across municipalities. These include irregular procurement processes, missing tender documentation, fraud, contractor non-performance, and misconduct by officials and bid committees – often in direct contravention of the Municipal Finance Management Act (MFMA).
These findings sit within a local government sector already under severe financial strain. As of early 2026, National Treasury indicates that the number of municipalities in significant financial distress remains at more than 150, with some reports citing as many as 162 to 168 struggling to maintain basic operations.
In his 2026 Budget Speech delivered on February 25, Finance Minister Enoch Godongwana noted that 63% of South Africa’s municipalities are in financial distress.
Several of the municipalities highlighted in the SIU briefing are among those already in crisis.
In the Free State, Masilonyana, as reported in Central News this month, has warned staff of delayed salary payments after its bank account was attached by creditors, while Maluti-a-Phofung faces a deficit exceeding R1bn. In North West, Ditsobotla continues to operate under a financial recovery plan following near-total collapse, with significant debts to Eskom, according to Newzroom Afrika. Matlosana and JB Marks have had funding frozen because of persistent non-compliance, while Mahikeng has been formally classified as distressed.
And in Gauteng, metros such as Tshwane and Johannesburg face ongoing cash flow constraints and governance instability.
The 19 investigations presented to SCOPA on 29 April cover a relatively small subset of municipalities. With more than half of the country’s municipalities in financial distress, the findings raise questions about the extent of irregularities that may exist beyond those investigated.
Investigations in focus: ongoing matters
The SIU briefing provided details on four investigations that remain ongoing:
- Masilonyana Local Municipality (Free State). Irregular appointment of service providers for the refurbishment of the Brandfort Water Treatment Works and raw water pump stations, as well as the upgrading of the Brandfort Sport Centre (Phase II).
- Mahikeng Local Municipality (North West). Procurement under Regulation 32 of the MFMA, involving contracts derived from other municipalities’ procurement processes for construction machinery (“yellow fleet”) and vehicles (“white fleet”).
- Tshwane Metropolitan Municipality (Gauteng). Procurement linked to upgrades and urgent refurbishment at the Rooiwal Wastewater Treatment Works, alongside a broader corruption investigation involving 65 roleplayers and 27 officials flagged for financial analysis.
- eThekwini Metropolitan Municipality (KwaZulu-Natal). Maladministration in water and sanitation service provision under Project Y6525AZ, involving seven contracts affected by procurement irregularities and non-performance.
Infrastructure-linked procurement, weak oversight, and failed contract management recur across these cases.
Completed investigations – from irregularities to systemic abuse
The SIU reported 15 completed investigations across multiple provinces:
- Free State:
- Maluti-a-Phofung Local Municipality (1)
- North West (three investigations):
- JB Marks Local Municipality (2)
- Matlosana Local Municipality (1)
- Ditsobotla Local Municipality (1)
- Gauteng (5 investigations):
- Johannesburg Metropolitan Municipality
- Ekurhuleni Metropolitan Municipality
- Tshwane Metropolitan Municipality
- City of Johannesburg
- City of Tshwane
- KwaZulu-Natal (5 investigations):
- Msunduzi Local Municipality (1)
- eThekwini Metropolitan Municipality (4)
Across these investigations, the SIU uncovered a range of irregularities and fraudulent activity.
In Matlosana, service providers were paid R2m for Covid-19 PPE without proper procurement processes. In Ditsobotla, a R25m generator contract was awarded irregularly. In Gauteng, investigations identified irregular procurement of fire engines, CCTV systems, and office furniture, alongside overpayments and fraudulent transactions. In KwaZulu-Natal, cases included fraudulent land transfers, inflated pricing, and corruption in security tenders.
Although each case raises concerns, two in particular show how governance failures lead to systemic loss.
Ekurhuleni Metropolitan Municipality: property transfers without authority
The investigation under Proclamation R.195 of 2024 spans more than two decades, examining the sale of 221 properties in Villa Liza Township between January 2002 and October 2024.
The probe centres on non-compliance with prescribed legislative processes governing the disposal of municipal property, and the identification of officials involved in the unlawful or irregular sale of these assets.
The SIU found that the transfers were not sanctioned by the municipality. Fraudulent documentation was submitted to the Deeds Office to facilitate the transactions, and the conveyancer involved had no mandate to effect the transfers.
The matter has been referred to the SIU’s Civil Litigation Unit, with proceedings under way in the Special Tribunal to reverse 208 of the property transfers, with an estimated value of R58m.
The scale of referrals reflects the breadth of the alleged misconduct. These include 208 criminal referrals to the NPA, 208 referrals to the Legal Practice Council, 208 referrals to the South African Revenue Service, and 174 referrals to the Financial Intelligence Centre.
The final report to the President is still under review.
eThekwini Metropolitan Municipality: housing programme irregularities
The SIU’s investigation into eThekwini, under Proclamation R.9 of 2021, focused on the disposal and transfer of immovable property linked to the municipality’s Human Settlements Infill Housing Programme.
The probe examined both the alienation of municipal or state-owned land for housing purposes and the role of developers appointed to transfer or sell vacant properties under the programme.
Findings point to multiple legislative contraventions, including breaches of the Income Tax Act, financial misconduct in terms of section 173(3) of the MFMA, and violations of anti-corruption legislation. The SIU also identified payments made to an official in circumstances raising concerns of improper conduct.
The outcomes include 20 criminal referrals to the NPA, four disciplinary referrals (resulting in two resignations, one dismissal, and one case where insufficient evidence was found), one referral to SARS, and 11 administrative action referrals targeting implicated entities and individuals.
From findings to consequences
Across these two and the other completed cases, the progression from referral to prosecution remains unclear.
Investigations are identifying wrongdoing and triggering referrals across multiple channels, but these have yet to translate into asset recovery, successful prosecution, or visible accountability.
Until that gap is closed, the risk is that these findings will continue to document loss rather than deter it – with severe consequences for municipal finances, service delivery, and public trust.
