By Thapelo Molefe
The country’s metropolitan municipalities continue to face serious financial and governance challenges, with Ekurhuleni reporting an estimated R2.5 billion loss linked to information technology failures and cyber breaches, while Mangaung accumulated R8.9 billion in unauthorised expenditure.
The findings are contained in the Standing Committee on Public Accounts’ (SCOPA) draft report on hearings with five metropolitan municipalities held between May and June.
Ekurhuleni and Mangaung emerged among the metros facing serious concerns over financial management, governance, service delivery and consequence management.
The report found that Ekurhuleni’s financial governance had deteriorated from clean audits in 2020/21 and 2021/22 to a qualified audit opinion for the 2024/25 financial year.
The Auditor-General of South Africa (AGSA) found that weaknesses in Ekurhuleni’s IT controls allowed unauthorised manual adjustments and system overrides in its computerised accounts receivable system.
This compromised the reliability of the municipality’s consumer debt records and contributed to the qualified audit opinion.
The report said the municipality’s IT environment had also suffered cybersecurity vulnerabilities that were successfully exploited during penetration testing, while weaknesses in backup and disaster recovery systems further exposed the metro to operational risks.
“The municipality’s 2024/25 audit outcomes revealed an estimated R2.5 billion loss due to IT control failures and cyber breaches,” the report states.
Ekurhuleni told SCOPA that a forensic investigation had confirmed external penetration of its systems as well as internal collusion involving municipal officials.
The municipality reported that approximately R800 million had been recovered, with disciplinary, criminal and civil processes underway.
It also said it was implementing measures, including a 24-hour security operations centre and tamper-proof transaction logs, to strengthen cybersecurity controls.
The metro recorded R137.65 million in irregular expenditure during 2024/25, taking its closing irregular expenditure balance to R1.083 billion.
It also had a closing balance of R68.766 million in fruitless and wasteful expenditure, while R391.107 million in unauthorised expenditure remained under investigation.
Ekurhuleni also recorded R625.775 million in contract deviations during the year, with AGSA finding that R32.701 million in deviations from competitive bidding processes had been approved without exceptional circumstances.
The metro’s service delivery performance was also questioned.
Despite spending 96% of its allocated budget, Ekurhuleni achieved only 71% of its planned targets.
The city planned to construct 6km of municipal roads but delivered only 1.06km. It also planned to complete 20 stormwater systems but completed nine.
Water and sanitation response targets were similarly missed, with only 43.07% of sanitation and wastewater callouts and 52% of water-related callouts resolved within 48 hours, against a target of 85%.
The municipality also recorded electricity losses of R3.067 billion, representing 15.5% of electricity purchased.
Of this, R2.209 billion was attributed to non-technical losses, including electricity theft, meter tampering, illegal connections, faulty meters and administrative errors.
Traffic fine collection was another major concern, with R2.74 billion, or 82% of traffic fine debtors, impaired during 2024/25.
The report also raised concerns about the integrity of the Ekurhuleni Metropolitan Police Department.
A criminal record verification exercise covering 3,586 officers found 63 officials with 82 prior convictions and 55 officials with 72 convictions incurred while in service.
A further 114 officers were facing 173 pending criminal cases, including allegations involving murder, attempted murder, robbery, kidnapping, fraud, corruption and extortion.
SCOPA questioned whether officers facing serious charges remained on active duty and whether those under investigation had been removed from operational duties or had their firearms taken away.
Mangaung’s financial woes
Mangaung received a qualified audit opinion for the third consecutive year, with AGSA identifying serious weaknesses in revenue management, expenditure controls and infrastructure management.
AGSA could not verify R1.676 billion in water revenue from conventional meters because the municipality did not have reliable consumption records.
It also found that incomplete billing resulted in an understatement of revenue and water trade debtors by R291.240 million.
Mangaung recorded R1.360 billion in unauthorised expenditure during 2024/25, bringing its cumulative unauthorised expenditure to R8.9 billion.
The metro also incurred R323.866 million in irregular expenditure during the year, increasing its cumulative balance to R4.067 billion.
A further R67.236 million in fruitless and wasteful expenditure was recorded, mainly linked to interest on late payments, supplier overpayments and fines.
The report found that the municipality repeatedly failed to investigate unauthorised, irregular and fruitless and wasteful expenditure to determine whether officials should be held personally liable.
“The reduction in UIFW balance due to write-offs by the council does not make unlawful expenditure lawful and can’t be presented as evidence of improved internal controls and governance,” the report stated.
Mangaung remained under national intervention and was implementing a Financial Recovery Plan, but only 58% of the activities in its first rescue phase had been completed by June 2025.
The municipality owed the water board R642.048 million and Eskom R1.598 billion as at June 2025.
AGSA also reported that only 2% of the metro’s expenditure was channelled towards repairs and maintenance of critical service delivery infrastructure.
Several infrastructure projects were found to be severely delayed.
The Maselspoort water treatment works refurbishment, initially valued at R104.564 million, had reached only 26% completion despite R40.599 million having been spent.
The Dewetsdorp Extension 8 water and sanitation project was 51% physically complete after R23.560 million had been spent, while nearby wastewater facilities remained non-operational because of vandalism, resulting in raw sewage being discharged into the environment.
The report also found that 11 wastewater treatment works operated without valid licences and 13 wastewater facilities lacked adequate security and maintenance.
Mangaung had 27 material irregularities identified by AGSA, involving estimated financial losses of R112 million and substantial harm to the public.
Only one of the 27 material irregularities had been resolved at the time of the hearings.
“The committee was generally disappointed by the extent to which the municipal management has not addressed the financial management weaknesses identified in the audit reports,” the report stated.
SCOPA also questioned the metro over a seven-member study tour to Surabaya, Indonesia, in November 2025 despite the municipality’s financial difficulties and national intervention.
The committee noted that municipal cost-containment regulations generally cap participation in international conferences, meetings and study tours at three officials or political office bearers.
The report said the municipality justified the seven-member delegation by saying the visit covered areas including trade, finance, tourism, manufacturing, infrastructure, governance, and arts and culture.
SCOPA held follow-up hearings with both Ekurhuleni and Mangaung in June after initially hearing from them in May, requiring further information on audit findings, financial misconduct, infrastructure failures and corrective measures.
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