Municipal Procurement Governance and Audit Outcomes: Lessons from the Auditor-General of South Africa Reports

Municipal procurement governance in South Africa remains a persistent contributor to the weak local government audit outcomes that the Auditor-General of South Africa (AGSA) has reported over the past two administration cycles. Drawing on the AGSA's Consolidated General Reports on Local Government Audit Outcomes (2020-21 to 2024-25), the National Treasury's Municipal Finance Management Act Section 131 report (2024/25), and a triangulated review of peer-reviewed scholarship on procurement governance, this working paper analyses the relationship between procurement-and-contract-management compliance and the audit outcomes of South Africa's 257 municipalities. The study finds that 87% of municipalities received material findings on procurement and contract management in 2023-24, with 63% carrying findings material enough to be reported to council; that 87% of the irregular expenditure recorded since 2021-22 originates in procurement-and-contract-management non-compliance; and that consequence management remains weak, with 53% of municipalities materially non-compliant in 2023-24. The paper argues that while the constitutional and legislative framework is adequate, the persistent gap between design and execution is the principal driver of poor audit outcomes. The study contributes a synthesised baseline for reform-oriented research and offers targeted recommendations for councils, treasuries, and oversight bodies. Limitations include the absence of municipality-level primary financial data and the reliance on AGSA's own root-cause assessments; findings should be read as a synthesis of AGSA-reported evidence rather than independently constructed statistical inference.