BCM’s poor governance becomes entrenched when provincial intervention lacking
For the fourth consecutive year, Buffalo City Metro (BCM) has received a qualified audit opinion on compliance and performance, according to the auditor-general of SA’s (Agsa) 2024/25 municipal audit outcomes.
This is not a marginal deterioration nor an isolated lapse.
It is a pattern of institutional stagnation in which material weaknesses recur unchanged, despite repeated warnings and escalating fiscal risk.
Qualified audits are not accounting footnotes. They signal that aspects of a municipality’s financial statements cannot be relied upon as credible representations of reality.
In BCM’s case, the AG again flagged material misstatements in property, plant and equipment — a core balance-sheet item — left uncorrected year after year.
The failure to resolve such basic accounting deficiencies points to systemic weaknesses in financial governance rather than a lack of technical guidance.
The most striking indicator of governance breakdown is the scale and persistence of irregular expenditure.
BCM’s cumulative irregular expenditure has now exceeded R11bn, following an additional R1.14bn incurred in the latest financial year, according to the AG’s report.
This continues a trajectory identified in earlier audit cycles, where cumulative irregular expenditure had already surpassed R10bn.
Crucially, the AG has repeatedly recorded that no meaningful investigations were concluded, no recoveries made, and no individual liability established for this expenditure.
National Treasury correspondence and provincial oversight records further indicate historic unauthorised expenditure of about R7.8bn and additional irregular expenditure of R3.39bn.
This is not merely about money lost. It is about a failure to uphold the enforcement architecture of the Municipal Finance Management Act (MFMA), which rests on consequence management as its central deterrent.
The Agsa is explicit in exposing that current findings are repeat findings.
Weaknesses identified in prior years, particularly in supply-chain management, contract oversight and performance reporting, still remain substantially unresolved.
This is despite BCM having spent more than R18m on consultants ostensibly to improve financial reporting and audit outcomes.
The implication is unavoidable.
External advisory support cannot substitute for internal accountability where political and administrative leadership does not enforce compliance.
Agsa reports across the province have consistently highlighted a culture of tolerance for non-performance at senior management level.
The drivers of BCM’s qualified audit outcomes are well documented in Agsa and parliamentary oversight findings:
- Ineffective internal controls to monitor compliance with the MFMA and Municipal Systems Act;
- Persistent procurement and contract-management failures, including the awarding of contracts above regulatory thresholds without competitive bidding;
- Chronic vacancies in key financial and technical posts; and
- Findings by oversight committees, including the Standing Committee on Public Accounts, citing poor project planning, design deficiencies and the absence of consequences across infrastructure programmes.
These weaknesses translate directly into aborted projects, cost overruns and underperforming capital expenditure, outcomes repeatedly observed in joint parliamentary and provincial oversight reviews.
BCM has submitted multiple audit improvement plans over successive years.
Yet the AG notes that these plans are either inadequately implemented or overridden by political interference.
Under the MFMA, accountability ultimately rests with the accounting officer, chief financial officer, and political executive charged with oversight.
The persistence of adverse outcomes raises uncomfortable questions about the effectiveness of intervention by the provincial executive authority, where constitutional responsibility for municipal oversight resides.
The evidence from audit outcomes points to a need for structural intervention:
- Enforce consequence management;
- Stabilise leadership and rebuild capacity;
- Reform procurement and financial controls;
- Radical transparency;
- Strengthen oversight; and
- Link budgets to service outcomes.
BCM’s latest audit outcome documents a long-running erosion of governance discipline, in which warnings were issued, acknowledged and then ignored.
The AG’s reports leave little room for interpretive ambiguity.
Beyond identifying technical non-compliance, they repeatedly conclude that BCM exhibits “a lack of consequences for transgressions and poor performance”, “regression in key controls”, and “no credible action plans to address repeat findings”.
These formulations point to a sustained failure of political and administrative leadership in local, district and provincial governance in the Eastern Cape to uphold the constitutional principles of accountable, responsive and effective public administration.
Section 139 of the constitution requires a provincial executive to intervene when a municipality “cannot or does not fulfill an executive obligation” in terms of legislation such as the MFMA.
All of these indicators are present, in aggravated form, in BCM’s audit record.
Yet provincial responses have remained largely procedural — characterised by monitoring, correspondence and the acceptance of audit action plans that the AG itself has described as “not addressing root causes”.
The oversight failure must also be understood in relation to Section 105 of the constitution, which vests executive authority in the premier and executive council and, by implication, responsibility for ensuring provincial departments exercise effective supervision over local government.
The AGSA has cautioned that where provinces “do not decisively intervene despite clear early-warning signals”, poor governance becomes entrenched and progressively more costly to reverse.
In such circumstances, accountability cannot be confined to municipal officials alone.
The predictable outcome is an environment in which material irregularities are repeatedly disclosed without remedial action, disciplinary processes are delayed or abandoned, and governance failure is normalised.
This dynamic erodes not only municipal capacity, as can be seen in many Eastern Cape municipalities.
The failure of these municipalities has also eroded the constitutional system of cooperative governance by rendering its corrective mechanisms ineffective in practice.
This is how people lose faith in the rule of law, which is a much more dangerous scenario for a young constitutional democracy such as ours.
Mphuthumi Ntabeni is a Komani-born writer