The Endumeni Local Municipality is facing severe financial challenges, with cash flow constraints making it difficult to sustain daily operations and deliver basic services.
This came to light during a briefing to the KwaZulu-Natal Legislature’s Cooperative Governance and Traditional Affairs (COGTA) Portfolio Committee, where the municipality outlined key concerns around financial management.
The Auditor-General of South Africa (AGSA) recently issued the municipality with a disclaimer audit opinion, citing the absence of supporting documentation for financial information in its annual statements.
This outcome forms part of a broader pattern of poor financial oversight, which prompted the COGTA committee to conduct hearings into ongoing issues including project delays, weak accountability, and irregular spending.
According to AGSA’s 2023–2024 audit report for the year ending 30 June 2024, the municipality has made little headway in addressing previous audit findings, only four of 26 issues identified in prior years have been resolved.
The report further revealed repeated non-compliance with legislation, poor oversight by leadership, weaknesses in procurement and contract management, and a general lack of consequences for financial mismanagement.
The scale of the problem is underlined by irregular expenditure of R21 million and unauthorised, irregular, fruitless, and wasteful (UIF&W) expenditure totalling R70 million.
AGSA recommended holding officials accountable for failing to implement the audit action plan, initiating investigations into all UIF&W expenditure, and enforcing appropriate disciplinary or legal measures.
It also urged the municipality to adopt a robust financial recovery plan focused on revenue generation, spending controls, and better cash flow management. Improved budget credibility and realistic revenue projections were also highlighted as priorities.
During the committee meeting, the municipality disclosed that its total debt burden stands at approximately R228 million. Of this, R157 million is owed by households, R51 million by businesses, and R20 million by organs of state.
Provincial Works is reportedly the largest state debtor, and COGTA has stepped in to facilitate efforts to recover this outstanding amount. Ongoing government-to-government debt engagements are being used to address these and other disputes.
COGTA Portfolio Committee chairperson Marlaine Nair described the meeting as productive, noting that it allowed legislators to fully grasp the underlying causes of the municipality’s long-standing issues and evaluate the steps being taken to address them.
Members of the committee also proposed actionable solutions and outlined follow-up steps to ensure improved governance and financial accountability.
Endumeni Local Municipality is located within the Umzinyathi District and encompasses towns such as Dundee and Glencoe.
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