An Exploration of the Relationship between Section 139 Administration and the Adverse Audit Opinions in South African Municipalities: The Case of uMzinyathi, Madibeng and Naledi Municipalities

Abstract

Collapse of governance as a process and of governance structures that take decisions and play an oversight role in the implementation of those decisions in municipalities has been identified as one of the reasons why many municipalities are dysfunctional. It should also be noted that there is also a contribution of maladministration and mismanagement especially financial mismanagement to the dysfunctionality of municipalities that have been put under section 139 of the Constitution. There is generally a feeling and perception that section 139 of the Constitution, popularly known as intervention or administration would not be necessary if government departments were effectively providing the support as provided for in section 154 of the Constitution. Linked to this debate is also a question whether section 139 itself is effective especially because there are municipalities that have been under administration for more than 8 years and there is no improvement hence, they never get out of administration. Since most of the dysfunctional municipalities under section 139 intervention or administration have financial management challenges, there is a need to explore if there is any relationship between section 139 intervention or administration with the bad audit outcomes. It is for this reason that this study explored the relationship between Section 139 administration and the adverse audit opinions in South African municipalities with specific focus on uMzinyathi, Madibeng and Naledi municipalities.