The City of Cape Town has lost its clean audit status after the Auditor-General flagged problems linked to procurement and supply chain management.

Auditor-General Tsakani Maluleke told Parliament’s Portfolio Committee on Cooperative Governance and Traditional Affairs that the city had regressed from its previous clean audit outcome.

Cape Town now has an unqualified audit opinion with findings. This means its financial statements were still accepted, but auditors found issues that need to be fixed.

The Auditor-General said the findings were linked to non-compliance in supply chain management and procurement processes.

Financial Reports Still Passed

Despite the regression, Cape Town was still credited for submitting quality financial statements and performance reports.

That is an important distinction. The city did not receive a qualified audit opinion, but it did lose the clean audit status it previously held.

A clean audit is usually seen as a major governance marker for municipalities. It shows that finances, reporting and compliance are being handled properly.

The latest finding means Cape Town must now address the procurement and supply chain failures identified by the Auditor-General.

Metros Under Pressure

Maluleke raised broader concerns about South Africa’s eight metropolitan municipalities.

She said metros need closer attention because they account for nearly 54% of local government spending and serve about 40% of the country’s population and households.

According to Maluleke, metros are not only regressing on audit outcomes. They are also showing signs of weaker financial health and service delivery.

She said local municipalities, intermediate cities and district municipalities had shown overall improvement, but metros were moving in the opposite direction.

Other Cities Also Flagged

The Auditor-General also pointed to long-running problems in other metros.

eThekwini remained in the unqualified audit category with findings, with weaknesses linked to procurement compliance, coordination across departments and infrastructure project management.

Johannesburg received a qualified audit opinion after years of unqualified outcomes. Maluleke said the city failed to correct financial statement errors identified during the audit.

Ekurhuleni also regressed to a qualified audit opinion, while Tshwane has remained in the qualified audit category for several years.

Maluleke said the findings show the urgent need for stronger governance, better financial controls and greater accountability in South Africa’s biggest municipalities.