Irregular Expenditure and Developmental Procurement in KwaZulu-Natal Municipalities

Municipalities in KwaZulu-Natal (KZN) continue to report high levels of irregular expenditure, mainly due to non-compliance with supply chain management (SCM) legislation. This study analyses the causes and recurrence of irregular expenditure in KZN municipalities over a ten-year period from 2014 to 2024. The study also considers whether municipal SCM processes are used to support developmental objectives, youth employment. The analysis is based on a review of the Auditor-General of South Africa’s MFMA general reports and the KwaZulu-Natal Department of Cooperative Governance and Traditional Affairs’ section 131 reports for all 54 municipalities in the province. A structured content analysis was applied to identify recurring audit findings related to SCM non-compliance. The findings show that irregular expenditure is not isolated but occurs repeatedly across financial years. Key causes include non-compliance with competitive procurement processes, misuse of deviation provisions, awards to non-compliant contractors, weak contract management, conflicts of interest, poor record keeping, and ineffective consequence management. The study further finds that SCM is largely compliance-driven, with limited use of procurement to support youth employment. The study concludes that strong compliance and consequence management are required before developmental procurement objectives can be effectively implemented.