While Endumeni Municipality has moved from a disclaimer to a qualified audit with findings, serious financial and compliance challenges persist.

This was revealed at a special council meeting last week, where Sinenhlanhla Sibiya and her team from the KwaZulu-Natal Auditor-General’s office presented the 2024/25 audit report for the year ending June 30, 2025.

Overspending and weak controls under scrutiny

The municipality overspent its approved budget by R92.23 million, while irregular expenditure increased sharply from R5.20 million in 2023/24 to R20.5 million.

Sibiya said this was mainly due to non-compliance in procurement processes, including failures when calling for tenders and the approval of non-competitive bids.

Fruitless and wasteful expenditure rose by R10 million to R22.3 million, largely because of interest and penalties linked to the non-payment of Eskom debt.

Although about R135 million had been written off by council, Sibiya noted that management failed to provide reasons for not addressing unauthorised, irregular, fruitless and wasteful expenditure.

Debt collection remained poor, with debtors taking an average of three months to pay accounts, well above the national average. Electricity theft further worsened the situation, resulting in distribution losses of 46%.

‘Excessive use of consultants’

The Auditor-General’s office also criticised the excessive use of external consultants to prepare financial statements. Mayor Mcebo Mkhize and councillors present said they were unaware such consultants had been appointed, while in one case the consultants were not suitably qualified.

A material irregularity was identified in the municipality’s banking processes, with accounts not adequately reconciled. Acting municipal manager Martin Sithole has until January 15, 2026, to resolve the issue.

Service delivery problems were highlighted, particularly the Marikana Road project in Sibongile and the delayed Argyle Street upgrade. The Marikana Road contract grew from R8.6 million in 2019 to more than R11 million on completion in June, amid poor workmanship and contractor changes. Argyle Street remains in poor condition.

Concerns were also raised about the Glencoe landfill site, where poor management and monitoring have led to waste overflows and environmental risks. The site has been without electricity for three years due to cable theft.

Sibiya said a clear action plan was needed to investigate wasteful expenditure, strengthen financial controls and improve service delivery.

Welcoming the report, Mayor Mkhize said the municipality had emerged from the “dark cloud” of a disclaimer audit and committed to addressing the challenges ahead. Executive committee member Salim Abdool said he welcomed the report but remained concerned about the scale of the problems identified.