South Africa’s Free State has been identified as the country’s most distressed and poorest-performing province for municipal governance, according to the Auditor-General’s 2024/25 Consolidated General Report, which highlights widespread failures in financial management, governance and service delivery.
The report paints a concerning picture of local government across South Africa, with Auditor-General Tsakani Maluleke warning that only limited progress has been made since the previous reporting cycle.
According to the report, 57% of municipalities recorded the same audit outcomes as in 2020/21, while 15% regressed. Only 39 municipalities, representing approximately 15% of all municipalities nationwide, achieved clean audits during the 2024/25 financial year. Those municipalities account for just 8% of the country’s total local government budget.
While the Western Cape remains South Africa’s strongest-performing province, the report notes that progress in provinces including the Eastern Cape, Limpopo, Mpumalanga, Northern Cape, North West and the Free State has been slow and, in many cases, unsustainable. It also highlights signs of governance regression in Gauteng, despite its critical role in the national economy.
Free State Records Country’s Weakest Municipal Performance
The Auditor-General identified the Free State as the province facing the most severe governance challenges.
One of the strongest indicators was its audit performance. The province recorded five disclaimer audit opinions—the highest number in the country. A disclaimer is the most severe audit opinion and indicates that auditors could not obtain sufficient evidence to express an opinion on a municipality’s financial statements.
By comparison, both the Northern Cape and North West recorded only one disclaimer audit each.
The report also noted that three of South Africa’s seven repeat disclaimer audits were issued to municipalities in the Free State.
In addition, the Free State was the only province where municipalities failed to submit all required financial information within the prescribed deadlines. Audits for Nala Local Municipality and Maluti-A-Phofung Local Municipality remain incomplete because financial statements were submitted late or not submitted at all.
The province has also failed to produce a single clean municipal audit for more than seven consecutive years.
Financial Mismanagement And Service Delivery Concerns Continue
The report found that the Free State recorded 104 material irregularities, the highest of any province. These cases involve significant financial losses, suspected fraud or serious harm to the public interest.
The figure far exceeds the North West’s 60 and the Northern Cape’s 49, with one in every five material irregularities nationally originating from the Free State.
Financial sustainability also remains under pressure. Together with Gauteng and Mpumalanga, the Free State has one of the highest proportions of municipalities operating with budget deficits.
Furthermore, 91% of municipalities in the province incurred unauthorised expenditure, while suppliers waited an average of 174 days to receive payment—the longest delay recorded anywhere in South Africa.
Opposition parties said the findings confirmed years of governance decline.
The Freedom Front Plus (VF Plus) argued that poor administration, weak financial management and a lack of accountability have undermined service delivery and public confidence in municipalities.
The Democratic Alliance (DA) attributed many of the problems to political instability, vacant senior management positions and an overreliance on expensive external consultants. The party called for independent administrators to be appointed to failing municipalities and urged government to strengthen accountability measures to improve governance and restore essential public services.
Source: Auditor-General South Africa (AGSA), Freedom Front Plus (VF Plus) and Democratic Alliance (DA).