Article re-cap
- The City of Cape Town received an unqualified audit with findings for the 2024/25 financial year, losing its clean audit status.
- Councillor Sue van der Linde stated this is Cape Town's 20th consecutive unqualified audit opinion since 2006.
- The Auditor-General's procurement concerns centred on Bid Evaluation Committee processes, including documentary proof of bargaining council registration and the use of previous contractor performance history.
- The City insists the findings relate to technical supply chain processes and do not reflect financial mismanagement or fraud.
- ActionSA has criticised the City administration, while the DA-led council argues the outcome should not overshadow two decades of stable financial management.
The Auditor-General reported that the City of Cape Town received an unqualified audit with findings and that metropolitan municipalities are regressing financially, according to Tsakani Maluleke.
Auditor-General Tsakani Maluleke stated that out of all municipal categories, metros are going backwards with no improvement. She made this comment during a briefing to the Cooperative Government Committee on Wednesday, June 25th, 2026.
Maluleke highlighted concerns around procurement processes within the City of Cape Town, citing red flags despite an unqualified audit. The City received an unqualified audit with findings. Internal controls regarding supply chain management require attention, she noted.
The City has since responded to the growing political fallout, insisting the findings reflect technical supply chain processes rather than financial mismanagement or fraud. Councillor Sue van der Linde noted that Cape Town has received an unqualified audit opinion for 20 consecutive years since 2006. She said the Auditor-General's concerns centred on Bid Evaluation Committee processes, specifically questions around documentary proof of a company's bargaining council registration and whether officials were permitted to consider a contractor's previous performance history when assessing new bids. The City argues those decisions were lawful and necessary, with van der Linde stating it is essential for the City to take into account previous failures by bidders when assessing bids for future contracts.
The loss of clean audit status has nonetheless handed opposition parties fresh ammunition. ActionSA has accused the City administration of allowing governance standards to decline under Mayor Hill-Lewis. In South African local government, a clean audit requires that a municipality's financial statements be free of material findings including compliance issues, whereas an unqualified audit confirms the statements are fairly presented even where concerns exist regarding governance or administrative processes.
The Auditor-General also raised concerns about entities within the City of Johannesburg, which received unqualified audits with findings. Eight metros account for 54% of the local government’s expenditure budget and warrant special attention.
Despite these challenges, Maluleke commended the country's 257 municipalities for achieving a 98% submission rate of their financial statements for the last financial year ending June 2025. This represents a significant achievement in municipal reporting across South Africa.
Frequently asked questions
What is the difference between a clean audit and an unqualified audit in South African local government?
A clean audit means a municipality's financial statements are free of material findings including compliance issues. An unqualified audit confirms the statements are fairly presented but allows for concerns around governance or administrative processes to still be flagged.
Why did Cape Town lose its clean audit status?
The Auditor-General flagged procurement concerns related to Bid Evaluation Committee processes, including questions about documentary proof of a company's bargaining council registration and the consideration of a contractor's previous performance history when assessing new bids.
How has the City of Cape Town responded to the audit outcome?
The City insists the findings reflect technical supply chain processes rather than financial mismanagement or fraud, and that procurement rules were followed in both substance and purpose. Councillor Sue van der Linde highlighted that Cape Town has received 20 consecutive unqualified audit opinions since 2006.
Source: ewn.co.za, capetownetc.com
