Auditor-General demands answers from Dihlabeng over R850 million write-off

Staff Reporter

Bethlehem – The Auditor-General of South Africa (AGSA) has demanded an investigation into R850 million in unauthorised, irregular, fruitless and wasteful expenditure (UIFWE) written off by Dihlabeng Local Municipality.

“There is no finding in the MPAC report, that warrants such sanctions” – Dihlabeng spin doctor spins a report that recommended MM and CFO to be charged

The demand follows an exposé by this publication revealing that the Municipal Public Accounts Committee (MPAC) had resolved to write off the expenditure.

REPORT | Dihlabeng faces R850 million write-off as MPAC report recommends disciplinary and criminal action

A leaked letter from AGSA, dated 8 October and addressed to the municipal manager, has now raised further questions about the decision and the investigations conducted before the write off.

In the letter, AGSA requested information to enable it to conduct the necessary audit procedures during its planning process. The municipality was given three days from receipt of the letter to submit the requested documents, as agreed in the audit engagement letter.

Cashiers pocket R1 million for “erroneously occupied graves” in Dihlabeng, no action a year later

The letter warned that failure to provide the information within the agreed timeframe could have serious consequences for the municipality’s audit outcome.

“Should any information requested not be received within the agreed timeline and should we not be able to obtain sufficient appropriate audit evidence by alternative procedures, this omission will be considered to be a misstatement of the financial statements and reported performance against pre determined objectives as a result of the limitation on the scope of the audit,” the letter states.

AGSA further warned that the misstatement identified in its sample could be projected across the entire population and, if material, could result in a qualified audit opinion or a disclaimer of opinion.

According to the letter, the expenditure written off during the 2025/26 financial year comprised the following:

• Unauthorised expenditure: R240,095,399
• Fruitless and wasteful expenditure: R55,553,940
• Irregular expenditure: R554,440,726

The three amounts total approximately R850.09 million.

AGSA specifically requested copies of all investigation reports conducted in respect of the unauthorised, irregular, fruitless and wasteful expenditure written off during the financial year.

The request raises questions about whether the municipality has the necessary investigation reports and supporting documentation to substantiate the decision to write off the expenditure.

It remains unclear whether Dihlabeng Local Municipality complied with AGSA’s request within the three-day deadline.

Support Independent Journalism

Stories like this matter. Accountability matters. Truth matters.

If you believe in fearless, independent reporting that holds power to account, help us keep going.

Your contribution, even as little as R10 makes a difference.
Choane Group (Pty) Ltd
FNB: 63110371703

If you have news or tips please email news@stepupsanews.co.za or WhatsApp: 068 507 6731

Independent. Unbought. Unfiltered.