The South African Local Government Association (SALGA) has achieved a clean audit for the 12th consecutive year, reporting no material non-compliance findings in an impressive display of financial stewardship.
This feat underscores the association’s effective governance as it strives to bolster capabilities within the country’s struggling municipalities.
For the financial year ending in 2023, SALGA reported an operational surplus of R122.7 million, a substantial increase from R77.2m the previous year.
The association met 87% of the 39 targets set for the year, falling short on five goals, which equates to a 13% shortfall.
SALGA has expressed optimism, noting that this high success rate was indicative of robust strategic planning and organizational execution.
“While this shortfall highlights areas needing further attention and intervention, the high success rate serves as a testament to the strategic planning and execution capabilities within the organization,” SALGA national executive committee member, Thami Ngubane, stated during their appearance before the Portfolio Committee on Cooperative Governance and Traditional Affairs on Friday.
“The 87% achievement signifies substantial progress in meeting organisational objectives, contributing to the broader goals set for the year. However, the unachieved targets also offer valuable insights and learning opportunities.”
Revenue figures further illuminate SALGA’s strong financial position, showing a 59% increase, with total operating revenue rising 5.7% to R847.8m from R801.9m in the previous year. This growth can be attributed largely to inflationary adjustments and organic growth in membership levies.
Correspondingly, total operating expenditure also increased by 4.1% to R815.3m, reflecting SALGA’s commitment to fulfilling its mandate of supporting municipalities. Notably, when disregarding the impact of doubtful debts, operating expenditure saw an increase of 7.3% to R811.4m.
However, SALGA acknowledged a decrease in performance targets achieved from 98% to 87%, despite an increase in the number of interventions that went beyond the originally planned targets for the year.
Additionally, net non-operating revenue surged by 53% to R90.2m, attributed primarily to increased bank interest as a result of additional cash and cash equivalents held.
On the staffing front, SALGA saw a decline of 5.3%, equating to 17 fewer employees, a change influenced by both terminations and a recruitment freeze that was ultimately lifted in October 2023.
These financial achievements come against a backdrop of pressing challenges within South Africa’s municipal landscape.
SALGA’s results have gained attention amid Eskom’s recent concerns regarding unpaid municipal debt, which is currently estimated at R85 billion and projected to potentially double by 2030 if left unaddressed.
Eskom’s 6th Multi-Year Price Determination (MYPD 6) seeks a 36% tariff increase for direct customers in its first year alone, moving towards cost-reflective tariffs while implementing a R480bn National Treasury-sponsored debt relief programme.
In spite of these challenges, SALGA said it has not lost sight of its mission as it celebrated milestones such as the training of 4 514 municipal councillors and officials across 32 programmes, ultimately benefiting 202 municipalities.
These initiatives are designed to enhance decision-making, governance, and service delivery—ensuring a more resilient local governance landscape.
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