Original Research

Do clean audits reflect good service delivery? A critical review of municipal performance and accountability in South Africa

Ernest K. Mutenda

Received: 23 Oct. 2025; Accepted: 04 June 2026; Published: 15 July 2026

Copyright: © 2026. The Author. Licensee: AOSIS.
This work is licensed under the Creative Commons Attribution 4.0 International (CC BY 4.0) license (https://creativecommons.org/licenses/by/4.0/).

Abstract

Background: In South Africa, clean audit outcomes are widely treated as indicators of sound governance, efficiency and financial integrity in municipalities. Nonetheless, service delivery failures, infrastructure decline and citizen dissatisfaction in some municipalities with favourable audit outcomes challenge the assumption that audit compliance translates into effective performance. This questions the use of audit outcomes as proxies for citizen-centred governance and developmental impact.

Objectives: This article examines whether clean audit outcomes reflect service delivery in South African municipalities. It applies the Audit–Performance Gap Model to explain how institutional capacity, contextual constraints and accountability mechanisms shape the relationship between audit performance and service delivery.

Method: The article uses a qualitative critical review of Auditor-General of South Africa reports, local government performance assessments, policy documents and academic literature. Guided by the model, thematic analysis identifies patterns, contradictions and blind spots in the relationship between clean audits and municipal performance.

Results: Clean audits often demonstrate compliance with accounting, reporting and legal requirements, rather than direct evidence of reliable, functional or citizen-centred services. Municipalities can achieve financial compliance while facing water and electricity interruptions, irregular refuse removal, poor complaint responsiveness, infrastructure backlogs and low citizen satisfaction.

Conclusion: The article advances the Audit–Performance Gap Model, linking financial compliance and service delivery through institutional, contextual and accountability lenses.

Contribution: This study calls for stronger integration of performance auditing, service delivery monitoring and citizen-accountability mechanisms in municipal oversight.

Keywords: clean audits; service delivery; municipal governance; accountability; performance auditing.

Introduction

Service delivery remains one of the most pressing challenges facing South African municipalities. This article focuses specifically on municipalities as the unit of analysis because local government is constitutionally responsible for providing basic services and promoting social and economic development within communities (Republic of South Africa, 1996, p. s.152). Municipalities are also the sphere of government most directly experienced by residents through services such as water, sanitation, electricity, refuse removal, local roads and community infrastructure (Department of Cooperative Governance and Traditional Affairs [COGTA], 2009; Statistics South Africa [Stats SA], 2023). Although clean audit outcomes are commonly interpreted as indicators of sound financial management, legislative compliance and, by implication, good governance, they do not necessarily provide direct evidence of reliable, accessible or high-quality service delivery (Auditor General of South Africa [AGSA], 2023; Motubatse et al., 2017). Residents may continue to experience water interruptions, electricity disruptions, irregular refuse removal, poor road maintenance, delayed complaint responses and limited access to sanitation even where a municipality has achieved a favourable audit outcome (AGSA, 2023; COGTA, 2021; Stats SA, 2023). These conditions form part of the service delivery challenge examined in this article.

For purposes of this review, service delivery is understood as the provision of basic municipal services and the extent to which such services are accessible, consistent, reliable and responsive to community needs. This understanding is aligned with the constitutional mandate of local government, the White Paper on Local Government and municipal performance reporting frameworks, which emphasise basic service provision, developmental local government, community responsiveness and accountability (COGTA, 2009; Department of Provincial Affairs and Constitutional Development, 1998; Republic of South Africa, 1996). The article therefore distinguishes between audit compliance, which is mainly concerned with financial reporting, legislative compliance and internal controls and service delivery performance, which concerns the lived experience of residents. Relevant service delivery concerns include water and electricity reliability, refuse removal regularity, access to sanitation, infrastructure maintenance, complaint response times and citizen satisfaction, which are commonly reflected in local government performance assessments, household service access data and municipal reporting instruments (COGTA, 2021; Stats SA, 2023). These are not treated as variables directly measured by AGSA audit reports. Rather, they are used as contextual service delivery dimensions against which the limits of audit outcomes can be critically assessed.

In the South African context, AGSA audits focus primarily on evaluating financial reporting accuracy, legislative compliance, predetermined objectives and internal control systems (AGSA, 2023). Auditor General of South Africa itself has acknowledged that a clean audit is not always an indicator of good service delivery (AGSA, 2023, p. 5). This recognition highlights the need to rethink how audit outcomes are interpreted in relation to developmental performance. To address this gap, this article introduces the Audit–Performance Gap Model, a conceptual framework designed to explain the weak or inconsistent relationship between audit results and service delivery outcomes. The model identifies three mediating dimensions: (1) institutional capacity, (2) contextual constraints and (3) accountability mechanisms. These dimensions help explain why procedural compliance may not always translate into tangible improvements in citizens’ lived experiences. Through this lens, the article critically evaluates how municipal audit outcomes can be better aligned with developmental governance and citizen-centred accountability.

Literature review

The assumption that clean audit outcomes automatically indicate good governance and effective service delivery has increasingly come under scrutiny. In the South African municipal context, a clean audit is generally understood as an audit outcome in which the financial statements are free from material misstatements, there are no material findings on performance reporting, and the municipality complies with key legislation and internal control requirements (AGSA, 2023). In practical terms, a clean audit reflects the quality of financial reporting, compliance discipline and internal control systems. It does not, however, directly measure whether residents receive reliable water, sanitation, electricity, refuse removal, road maintenance or responsive municipal services. This distinction is important because clean audits are often used symbolically in public discourse as evidence of good governance. While they are important indicators of financial accountability, they do not automatically demonstrate developmental performance or citizen-centred outcomes. A municipality may produce credible financial statements, comply with audit requirements and maintain adequate internal controls, while still experiencing infrastructure backlogs, capacity constraints, poor maintenance systems and weak responsiveness to community complaints. The literature therefore cautions against treating audit compliance as a complete measure of municipal performance (Aadnesgaard & Willows, 2016; AGSA, 2023; Craig, 2017; Motubatse et al., 2017).

Clean audits and financial governance

Studies on South African municipal audit outcomes have linked clean audits to governance, leadership, oversight, financial management capacity and internal control arrangements. Motubatse et al. (2017) examine the effect of governance on clean audits in South African municipalities, while Rukuni et al. (2022) analyse the relationship between clean audits and service delivery in two Mpumalanga municipalities. Aadnesgaard and Willows (2016) and Craig (2017) further interrogate whether municipal audit outcomes can be treated as reliable indicators of service delivery performance. Together, these studies suggest that clean audits are useful indicators of financial governance and compliance, but they do not automatically demonstrate developmental performance or citizen satisfaction.

For purposes of this article, internal factors refer to organisational arrangements within a municipality that influence audit performance. These include leadership stability, financial management capacity, audit committee effectiveness, internal audit functionality, record keeping, management responsiveness to audit findings, consequence management and the quality of internal controls. Institutional factors refer to the broader governance environment within which municipalities operate. These include council oversight, political-administrative stability, availability of skilled personnel, financial viability, intergovernmental support, regulatory enforcement and the socioeconomic context of the municipality. These factors differ across municipalities, which means that the same audit framework may produce different practical outcomes depending on local capacity and institutional conditions.

Motubatse et al. (2017), using panel regression analysis across South African municipalities from 2009–2010 to 2013–2014, found that governance-related factors significantly influenced the likelihood of attaining clean audits. Their findings suggest that clean audit outcomes may serve as indicators of procedural strength, particularly in financial governance, leadership oversight and internal controls. However, the study does not establish a direct causal link between clean audit outcomes and improved service delivery. Similarly, Rukuni et al. (2022), in a comparative study of two municipalities in Mpumalanga, found that clean audits were often associated with stronger internal audit functions, improved management support and higher levels of compliance with financial regulations. These governance attributes, however, did not consistently translate into better service delivery performance, especially in high-demand or under-resourced municipalities. This implies that while clean audits may reflect internal procedural discipline, they are not necessarily indicative of external service performance or public satisfaction.

International literature also shows that the relationship between audit quality and governance effectiveness depends on institutional context. In countries such as Sweden, where public institutions are generally characterised by stronger administrative capacity, higher levels of transparency and more effective accountability systems, audit quality is more likely to support substantive improvements in governance. By contrast, in countries such as Tanzania, where public institutions may face capacity constraints, resource limitations and weaker enforcement mechanisms, audit processes may strengthen compliance without necessarily producing equivalent improvements in service delivery outcomes. Gustavson and Sundström (2018) similarly argue that good public auditing depends not only on technical audit processes, but also on independence, professionalism and a citizen-oriented understanding of accountability. This supports the argument that clean audits should be interpreted within their broader institutional setting rather than treated as automatic evidence of effective public sector performance.

Disconnect between audit outcomes and service delivery

Multiple studies directly explore the disconnect between audit compliance and tangible service delivery. Craig (2017), in her master’s thesis, analysed whether financial audit outcomes align with improvements in municipal services. She found only a weak and inconsistent relationship. In her view, external factors such as infrastructure quality, regional income disparities and resource allocation have a stronger influence on service delivery than audit performance. Her work challenges the utility of audit outcomes as holistic indicators of municipal performance. Khasodi et al. (2023) reinforce this disjuncture through a case study of the Midvaal Local Municipality. Despite achieving consecutive clean audits, the municipality continues to face significant challenges in infrastructure maintenance, equitable service distribution and responsiveness to citizen concerns. While internal governance practices such as ethical leadership and sound revenue management were found to be strong, these do not consistently resolve operational issues. This mirrors findings by Ngubane (2025), who noted that even municipalities praised for clean audits (e.g. West Coast District, Overstrand and Okhahlamba) often underperform in areas like water access and road infrastructure. Such findings align with broader critiques of audit-driven accountability as insufficient for measuring developmental impact (Andrews, 2013; Power, 1997). These scholars caution that audits can become performative tools satisfying formal compliance requirements while masking governance failures.

Moderating and mediating factors

The relationship between clean audit outcomes and service delivery is not direct or automatic. In this article, the Audit–Performance Gap Model is used to explain why a municipality may achieve a clean audit while still experiencing service delivery weaknesses. The model distinguishes between moderating factors and mediating factors. Moderating factors are conditions that strengthen or weaken the relationship between audit outcomes and service delivery. These include political stability, financial viability, infrastructure backlogs, population growth, corruption risks, administrative capacity and the socio-economic profile of the municipality. Mediating factors are the mechanisms through which audit findings are converted into improved performance. These include consequence management, council oversight, internal audit follow-up, audit committee effectiveness, management responsiveness, Integrated Development Plan implementation, community participation and citizen feedback systems.

These factors are identified from the literature on municipal audit outcomes, public financial management and local government performance. Motubatse et al. (2017) show that leadership quality, oversight and managerial practices influence the likelihood of attaining clean audits. Rukuni et al. (2022) similarly indicate that clean-audit municipalities often have stronger internal audit functions, management support and compliance systems. Craig (2017) adds that municipalities operating under severe budget constraints, infrastructure deficits and population pressure may achieve audit success without equivalent service delivery improvement. These studies support the argument that clean audits are shaped by internal governance systems, but service delivery outcomes depend on whether these systems are supported by adequate capacity, resources, accountability and responsiveness.

The application of the Audit–Performance Gap Model therefore requires two levels of analysis. The first level examines whether the municipality has the internal systems necessary to obtain a clean audit, such as credible financial statements, accurate performance reporting, compliance with legislation, effective internal controls, functioning internal audit units and responsive management. The second level examines whether these audit-related systems are linked to service delivery improvement through planning, budgeting, maintenance, infrastructure investment, complaint resolution and citizen accountability. A clean audit may therefore indicate that the municipality has achieved financial and compliance discipline, but it does not necessarily confirm that water supply is reliable, electricity disruptions are reduced, refuse removal is regular, roads are maintained or complaints are resolved timeously. This is the core gap examined in the article.

Audit outcomes and regional trends

Auditor General of South Africa’s consolidated local government audit reports provide an important basis for understanding audit outcomes and regional trends in South African municipalities. In this article, audit outcomes refer to the categories used by AGSA to assess municipal audit performance, including clean audits, unqualified audits with findings, qualified audits, adverse opinions, disclaimed opinions and outstanding audits. These outcomes are based mainly on the credibility of financial statements, the quality of performance reporting, compliance with legislation and the effectiveness of internal controls. Regional trends refer to patterns emerging from audit outcomes across South Africa’s provinces, including differences in the number of municipalities achieving clean audits, the persistence of qualified or disclaimed audit opinions, and recurring governance weaknesses.

The 2023–2024 audit shows that clean audits remain concentrated in a limited number of municipalities, while many municipalities continue to face weak internal controls, instability, poor financial management, inadequate consequence management and service delivery pressures. This trend is important because it links directly to the service delivery challenges identified in the introduction. Communities continue to experience water interruptions, electricity disruptions, irregular refuse removal, poor road maintenance, sanitation backlogs and slow responses to complaints, even where some municipalities demonstrate improved compliance performance. The regional pattern therefore shows that audit improvement does not automatically remove the structural and operational challenges that affect citizens’ lived experiences.

The Western Cape has consistently performed better than other provinces in terms of clean audit outcomes, with several municipalities demonstrating stronger financial governance, more stable administrative systems and better institutional controls. However, even in stronger-performing provinces, clean audits should not be interpreted as complete proof of service delivery excellence. They remain indicators of financial reporting quality, compliance and control effectiveness. In provinces such as the Free State, Northwest, Eastern Cape and parts of Gauteng, recurring audit weaknesses are often linked to administrative instability, poor record keeping, weak consequence management, financial distress and infrastructure delivery challenges. These weaknesses help explain why communities may continue to experience poor service delivery despite reforms aimed at improving audit outcomes.

The significance of the regional trends is therefore not only the number of clean audits achieved in a particular province, but also what those outcomes reveal about the capacity of municipalities to convert financial compliance into developmental performance. Where clean audits coincide with stable leadership, credible planning, funded infrastructure programmes, responsive complaint systems and effective council oversight, the audit outcome is more likely to support service delivery improvement. Where these conditions are absent, clean audits may remain procedural achievements with limited impact on the daily experiences of residents.

International perspectives on audit outcomes and service delivery

International literature provides useful lessons for understanding why clean audits do not automatically translate into improved service delivery. The key lesson is that audit outcomes become meaningful only when they are embedded in wider systems of accountability, implementation, transparency and public responsiveness. In countries with stronger public institutions, audit systems are often supported by professionalised bureaucracies, active legislative oversight, effective follow-up mechanisms, transparent reporting and consequences for poor performance. In such settings, audit findings are more likely to influence budgeting, planning, procurement, service delivery correction and institutional learning.

Evidence from Finland and the Netherlands, for example, shows that supreme audit institutions can strengthen financial discipline and administrative accountability when audit findings are linked to parliamentary scrutiny, professional public administration and systematic follow-up (Pollitt & Summa, 1997). In these contexts, audits are not treated simply as annual compliance exercises. They form part of a broader performance management and accountability system that encourages public institutions to correct weaknesses and improve service outcomes. The relevance for South African municipalities is that clean audits should be connected to service delivery monitoring, infrastructure planning, complaint resolution and public reporting if they are to produce developmental value.

In contrast, studies from developing and reforming contexts show that improvements in audit processes may not automatically produce better services where institutional capacity remains weak. De Renzio (2006), examining Mozambique, found that improvements in public financial management and assessment scores did not necessarily lead to better education and health outcomes. These findings are relevant to the South African municipal context because many municipalities face similar constraints, including skills shortages, infrastructure backlogs, weak enforcement, political instability and limited implementation capacity.

Andrews (2013) further warns that public sector reforms may be adopted for legitimacy purposes rather than to solve real governance problems. This insight is important for this article because clean audits can become symbolic achievements if they are celebrated without asking whether they have improved citizens’ lived experiences. International evidence therefore supports the central argument of this article: Audit compliance is necessary for public accountability, but it is not sufficient for developmental performance. Countries that derive service delivery value from audit systems do so by strengthening follow-up processes, linking audit findings to performance improvement, enforcing consequences, improving public reporting and ensuring that citizens can hold institutions accountable for both financial management and service outcomes.

Comparative studies of municipalities

Comparative municipal studies show that good governance and strong service delivery may coincide, but not consistently. This section focuses on local and metropolitan municipalities in South Africa because the articles unit of analysis is the municipal sphere. Municipal comparisons are useful because they show that clean audits, governance strength and service delivery performance vary across local contexts (Aadnesgaard & Willows, 2016; Craig, 2017; Rukuni et al., 2022). Some municipalities combine stronger audit outcomes with better planning, leadership stability and service performance, while others may perform better on financial compliance than on citizen-centred delivery (AGSA, 2023; Good Governance Africa [GGA], 2024).

Good Governance Africa’s Governance Performance Index provides a useful comparative basis because it assesses local governance performance across South Africa’s 257 municipalities (GGA, 2024). The index shows that municipalities such as Cape Town, Drakenstein, Stellenbosch and Swartland demonstrate relatively stronger governance performance than many other municipalities. These examples suggest that audit and governance performance are more likely to support service delivery where they are accompanied by administrative capability, credible planning, financial sustainability and effective implementation (AGSA, 2023; GGA, 2024). However, other municipalities illustrate the disconnect between governance claims and service outcomes. Municipalities facing leadership instability, financial distress, infrastructure decline or weak accountability may struggle to translate audit compliance into reliable services (AGSA, 2023; Rukuni et al., 2022).

This comparative evidence reinforces the argument that clean audits should be interpreted as one part of a broader municipal performance picture. A clean audit may indicate that a municipality has met important financial reporting and compliance standards, but it should be read together with service delivery indicators such as access to water and sanitation, electricity reliability, refuse removal regularity, infrastructure maintenance, complaint response times and citizen satisfaction (AGSA, 2023; COGTA, 2021; Stats SA, 2023). This approach connects audit outcomes directly to the service delivery challenges identified in the introduction and shows why municipal accountability frameworks should integrate financial compliance, performance auditing and citizen-centred service delivery measurement (Craig, 2017; Motubatse et al., 2017; Rukuni et al., 2022).

The metropolitan comparison further illustrates the uneven relationship between governance capacity and service delivery performance in South Africa’s largest municipalities. As shown in Figure 1, the eight metropolitan municipalities, which govern approximately 40% of the national population, display marked differences in the alignment between administrative capacity and service delivery performance (GGA, 2024). The City of Cape Town demonstrates the strongest governance–delivery concordance, with Service Delivery as its most favourable category and broadly strong scores across other governance dimensions. Ekurhuleni also performs relatively well, with its stronger score in Leadership and Management suggesting the possible benefits of institutional routines consolidated under a formal coalition framework between 2016 and 2021. However, post-2021 political fragmentation may weaken these gains. By contrast, Johannesburg and Tshwane perform below what might be expected of major metropolitan municipalities, with weaknesses concentrated in Administration and Governance, Planning, Monitoring and Evaluation and Leadership and Management. eThekwini performs strongest in Economic Development but is comparatively weaker in Administration and Governance. Nelson Mandela Bay combines relatively strong Service Delivery performance with weaker Leadership and Management, while Mangaung records the most acute leadership weakness, with Leadership and Management emerging as its least favourable category (GGA, 2024).

FIGURE 1: Overview of the 2024 metropolitan municipalities governance performance indicators.

These patterns are consistent with comparative evidence cautioning against equating procedural compliance with substantive service delivery outcomes. Ngubane (2025) shows that municipalities with sustained clean audits, such as West Coast District Municipality, Overstrand and Okhahlamba, may benefit from stronger perceptions of transparency, but this does not mean that they consistently outperform other municipalities in core service areas such as water provision, sanitation and road maintenance. Similarly, Rukuni et al. (2022) found that middle managers in clean-audit municipalities reported more favourable views of internal governance structures, yet these perceptions were not consistently reflected in measurable service delivery improvements. This suggests that clean audits and positive internal governance perceptions may strengthen institutional credibility, but they do not automatically translate into improved citizen experiences.

Figure 1 and the reviewed literature therefore suggest that metropolitan performance is not determined by audit outcomes or governance scores alone. Rather, stronger performance emerges where leadership stability, administrative capability, financial discipline, planning systems and monitoring capacity are institutionalised and converted into service delivery outputs. Conversely, metropolitan municipalities affected by governance fragility, including political instability, coalition volatility, weak oversight and poor administrative continuity, may experience a governance–delivery disconnect. In such cases, procedural strengths or reputational advantages may exist on paper, but remain weakly connected to operational performance and citizen-centred outcomes (GGA, 2024; Ngubane, 2025; Rukuni et al., 2022).

Auditor General of South Africa has repeatedly emphasised that clean audits are necessary but not sufficient for effective governance. In its 2022–2023 local government audit report, AGSA warns that many municipalities continue to underperform in service delivery despite improvements in financial reporting and compliance. The report highlights that financial compliance, while essential, does not always capture the lived experience of communities. Audit status should therefore not be treated as a complete proxy for developmental performance, particularly where communities continue to experience water interruptions, sanitation challenges, road infrastructure deterioration, electricity disruptions, refuse removal failures and slow responses to service complaints (AGSA, 2022, 2023).

Clean audits and service delivery in developing countries contexts

Evidence from developing countries’ contexts shows that clean audits and improved audit systems do not automatically translate into better service delivery. Countries that improve audit outcomes usually do so through broader public financial management reforms, including credible budgeting, stronger internal controls, improved financial reporting, internal and external audit, procurement controls, legislative oversight and follow-up on audit recommendations. The Public Expenditure and Financial Accountability (PEFA) framework is an international assessment tool used to evaluate the strengths and weaknesses of a country’s public financial management system. Public Expenditure and Financial Accountability assessments examine areas such as budget reliability, transparency of public finances, asset and liability management, policy-based budgeting, budget execution controls, accounting, reporting, external audit and legislative scrutiny (PEFA Secretariat, 2016). In this article, PEFA assessments are used as comparative evidence because they show how developing countries strengthen the broader financial management systems that support credible audit outcomes.

Rwanda provides a useful recent example. Its 2022 PEFA assessment shows stronger performance in areas such as fiscal strategy, debt management, macroeconomic forecasting and alignment between strategic plans and medium-term budgets (PEFA, 2022a). These reforms are relevant because they show that audit improvement is more likely to support service delivery when linked to budget reliability, expenditure control, reporting and accountability. Tanzania’s 2022 PEFA assessment similarly shows progress in internal audit, external audit, accounting, financial reporting and legislative scrutiny (PEFA, 2022b). However, both examples also show that financial management improvements must be connected to service delivery planning, implementation and monitoring if they are to improve citizens’ lived experiences.

The key lesson for South African municipalities is that clean audits should not be treated as developmental outcomes in themselves. They are important indicators of financial discipline and compliance, but they only support service delivery where audit findings are linked to planning, budgeting, infrastructure maintenance, complaint resolution, consequence management and citizen-facing performance reporting. Without these links, clean audits may remain procedural achievements while communities continue to experience water interruptions, sanitation failures, electricity disruptions, poor road maintenance and irregular refuse removal (AGSA, 2023; Andrews, 2013).

Gaps in the literature and rationale for the study

Despite a growing body of work on municipal audits in South Africa, several critical gaps persist. Many studies assume a direct relationship between clean audits and good governance without empirically testing the link to service delivery outcomes. There is also an overreliance on high-level, aggregated data, with limited attention to disaggregated, citizen-level indicators. The role of contextual constraints such as institutional capacity and resource limitations is underexplored, as is the integration of citizen feedback into audit systems. Finally, few studies propose conceptual frameworks that connect audit processes to developmental performance in a structured and theoretically grounded way. This article seeks to address these gaps by proposing the Audit–Performance Gap Model, which highlights the mediating role of institutional, contextual and accountability factors in shaping the audit–delivery nexus.

Conceptual framework: The Audit–Performance Gap Model

To enhance the theoretical clarity of the audit–service delivery relationship, this article proposes the Audit–Performance Gap Model to explain the disconnect between financial audit outcomes and service delivery performance in South African municipalities. The model (Figure 2) captures the key mediating factors that shape whether municipalities can convert procedural success into meaningful service delivery outcomes. Clean audits are traditionally seen as proxies for institutional performance; however, emerging evidence suggests that institutional capacity, contextual constraints and accountability mechanisms critically influence whether these audits correspond to improved services (Andrews, 2013; Motubatse et al., 2017; Power, 1997). This framework builds on the core assumption that technical compliance as measured by audit status is only one component of governance. It identifies three main dimensions that either enable or undermine the translation of clean audits into actual developmental outputs.

FIGURE 2: Proposed conceptual framework: The Audit–Performance Gap Model.

Institutional capacity: This refers to the internal governance quality of a municipality, including leadership stability and competence (Craig, 2017), the presence of professional, skilled personnel, effective internal control systems and audit committees, and adequate planning, budgeting and monitoring systems. Municipalities with clean audits often possess strong institutional capacity; but this strength does not automatically translate into improved service delivery if it is not supported by operational execution (Rukuni et al., 2022).

Contextual constraints

Even municipalities that score well on audit metrics may struggle to deliver services due to revenue limitations and fiscal stress, infrastructure backlogs rooted in historical inequality, rapid population growth or migration and environmental or geographic barriers. Craig (2017) and Middleton (2019) have shown that municipalities facing high service demands and limited revenue capacity often underperform in service delivery, regardless of audit performance.

Accountability mechanisms

Effective translation of audit success into service delivery requires robust, outward-facing accountability mechanisms, including performance auditing that evaluates service outcomes, not just financial inputs (AGSA, 2022), citizen participation platforms such as ward committees and Integrated Development Plan (IDP) forums, and feedback loops that allow residents to voice concerns and influence resource allocation (Gustavson & Sundström, 2018; Power, 1997). Where these mechanisms are weak, municipalities may meet compliance requirements while ignoring community needs, resulting in a disconnect between audit success and public satisfaction. This model emphasises that clean audit outcomes are not developmentally neutral. Whether they produce actual improvements in citizen well-being depends on the institutional infrastructure, the contextual environment and the degree of participatory oversight. Recognising this complexity is crucial for developing a more integrated, performance-oriented municipal governance framework in South Africa.

Research methods and design

This article adopted a qualitative, interpretive research approach to examine whether clean audit outcomes reflected service delivery performance in South African municipalities. A qualitative approach was appropriate because the study sought to understand patterns, contradictions and institutional blind spots in the relationship between audit compliance and developmental effectiveness, rather than to produce statistical generalisations.

The study was based on secondary document analysis. Document analysis is appropriate where official reports, policy documents, academic literature and institutional records are used to interpret a social or governance phenomenon (Bowen, 2009). Four categories of documents were reviewed: (1) Auditor-General of South Africa reports on local government audit outcomes; (2) municipal performance assessments and policy documents issued by COGTA, National Treasury and related oversight institutions; (3) peer-reviewed academic literature on public financial management, audit outcomes and service delivery; (4) and independent governance assessments, including the GGA Governance Performance Index.

The documents were purposively selected because of their relevance to the research question and their ability to provide insight into both municipal audit frameworks and service delivery outcomes. The review focused on South African municipalities generally, rather than on selected case-study municipalities. This approach was appropriate because the article sought to critically examine the broader relationship between clean audits and service delivery in the municipal sphere.

The documents were analysed using thematic content analysis. Thematic analysis is suitable for identifying, analysing and interpreting patterns of meaning across qualitative data (Braun & Clarke, 2006). To strengthen trustworthiness, the analysis followed an iterative process of reading, coding, comparing and refining themes, consistent with qualitative thematic analysis guidance (Nowell et al., 2017). The analysis was guided by the Audit–Performance Gap Model and focused on three analytical dimensions: the disjuncture between financial compliance and service delivery effectiveness; institutional and political factors shaping audit and delivery performance; and oversight frameworks and citizen accountability mechanisms.

The analysis aimed to identify both the strengths and limitations of the clean audit paradigm. Particular attention was given to instances where technical compliance, financial reporting quality and legislative adherence appeared insufficient to explain the lived experience of communities. The methodology therefore allowed the article to assess clean audits not as isolated audit achievements, but as part of a broader municipal accountability and service delivery system.

Ethical considerations

This article followed all ethical standards for research without direct contact with human or animal subjects.

Results

Although clean audits are widely promoted as indicators of good governance and administrative efficiency, they often fail to reflect the lived experiences of residents, many of whom continue to face chronic service delivery failures, infrastructure degradation and governance dysfunction. The findings are presented across three core themes: (1) the narrow scope of clean audit criteria; (2) the influence of institutional and contextual factors; and (3) the weakness of performance auditing and citizen accountability mechanisms.

The narrow scope of clean audit criteria

Clean audit outcomes, as defined by AGSA, indicate that financial statements are free from material misstatements, performance reports comply with legislation, and there are no material findings on compliance with laws and regulations (AGSA, 2023). While this standard reflects sound financial management and internal control, it does not assess developmental outcomes, service quality or citizen satisfaction. Auditor General of South Africa has acknowledged this limitation, noting that ‘a clean audit is not always an indicator of good service delivery’ (AGSA, 2023, p. 5). Nevertheless, audit outcomes are often perceived and celebrated as definitive indicators of municipal success, both within government and in the public domain.

Illustrative evidence from the literature demonstrates this limitation. Khasodi et al. (2023), for example, show that Midvaal Local Municipality has been associated with strong internal governance, ethical leadership and financial controls, but still faces ongoing challenges relating to infrastructure maintenance, equitable service distribution and responsiveness to citizen concerns. Similarly, Ngubane (2025) shows that municipalities praised for sustained clean audits, including West Coast District Municipality, Overstrand and Okhahlamba, may still face pressure in areas such as water access, sanitation and road infrastructure. These examples illustrate the symbolic limits of clean audits, which often reflect institutional compliance rather than developmental effectiveness. They point to a fundamental weakness in the current audit model, which privileges process over impact.

Institutional and contextual factors

The second key finding is that institutional capacity, resource availability and political dynamics significantly influence whether clean audits are translated into improved service outcomes. Clean audits tend to be associated with municipalities that possess stable leadership, professional administration and well-functioning internal control environments (Motubatse et al., 2017). These institutional strengths are not evenly distributed across the local government sphere. Rukuni et al. (2022) found that while clean audits were correlated with strong internal governance perceptions, they did not necessarily result in enhanced service delivery. This is particularly true in municipalities constrained by historical service backlogs, revenue shortfalls and insufficient infrastructure investment. Similarly, Craig (2017) argues that municipalities with the technical ability to comply with audit requirements often lack the fiscal or logistical resources to deliver services effectively. Furthermore, political interference, cadre deployment and coalition instability further disrupt the translation of audit strength into service improvements. The administrative apparatus may be capable of achieving audit targets, but without enabling political and developmental conditions, these achievements remain superficial. In this context, clean audits may function more as proxies for technical compliance capacity than as indicators of holistic governance or citizen impact.

Weaknesses in performance auditing and citizen accountability

The third finding centres on the absence of robust performance auditing and weak mechanisms for citizen accountability. While AGSA has introduced mechanisms to detect material irregularities and has begun integrating elements of performance review into its reports, the primary focus remains on financial compliance. This has created an inward-facing accountability system that incentivises administrative success without demanding corresponding delivery outcomes. Andrews (2013) warns that such systems often encourage ‘isomorphic mimicry’ which is the adoption of best-practice templates that confer legitimacy without driving meaningful change. Power (1997) similarly critiques the performative nature of audits, arguing that they can reinforce bureaucratic rituals at the expense of real impact. In many municipalities, ward committees, public consultations and IDP processes are under-resourced, inconsistently implemented or symbolic in function. As a result, community grievances and service delivery failures are seldom reflected in audit outcomes, and there are few avenues for residents to hold municipal leadership accountable based on performance metrics. The disconnect between technical audit compliance and the lived experiences of citizens represents a critical failure of the current oversight framework. It allows municipalities to project institutional success while communities continue to face delivery shortfalls.

Comparative data from the 2024 Governance Performance Index published by GGA reveal stark variations in the relationship between administrative performance and service delivery among metropolitan municipalities:

• The City of Cape Town demonstrates the strongest alignment between governance and service outcomes, scoring highly in both categories.
• Ekurhuleni maintains strong governance indicators but faces post-2021 infrastructure and political challenges.
• Tshwane and Johannesburg record substantial governance deficits, ranked very low on leadership regardless of their economic and institutional prominence.
• Mangaung consistently underperforms on both governance and service metrics, reflecting leadership fragility and institutional breakdown.

These variations confirm that metropolitan performance cannot be assessed through audit status alone. Municipalities with clean audits may still exhibit severe governance weaknesses that compromise service delivery (GGA, 2024; Ngubane, 2025; Rukuni et al., 2022). Auditor General of South Africa’s 2022–2023 report reaffirms that while clean audits are important, they are not sufficient to ensure effective governance. The report cautions that technical compliance must be accompanied by measurable developmental outcomes, noting that ‘financial statements may be in order, while services to residents are deteriorating’ (AGSA, 2023). This official position underlines the need to recalibrate audit frameworks to incorporate performance-based, citizen-centred and impact-oriented indicators.

Discussion

Recommendations for strengthening municipal audit and service delivery accountability

To address the disconnect between clean audit outcomes and effective service delivery, this article proposes recommendations for strengthening municipal oversight, institutional performance and citizen-centred accountability. These recommendations are informed by the three dimensions of the Audit–Performance Gap Model: (1) institutional capacity, (2) contextual constraints and (3) accountability mechanisms. They are not presented as a new standalone policy, but as practical reform proposals that can inform existing municipal accountability frameworks, including AGSA audit processes, municipal performance management systems, IDP monitoring, council oversight and public participation mechanisms.

Municipal audit outcomes should be interpreted alongside evidence of institutional capacity. This requires municipalities to strengthen merit-based appointments, stabilise senior management, professionalise financial management, and ensure that internal audit units address both financial control risks and service delivery risks. Audit committees and municipal public accounts committees should also be required to monitor whether audit findings are translated into corrective action, improved planning and better service delivery performance. Ethical governance, consequence management and reduced political interference are necessary to ensure that clean audits reflect genuine institutional discipline rather than procedural compliance alone.

Oversight frameworks should also take municipal context into account. Municipalities differ significantly in size, revenue base, administrative capacity, infrastructure backlogs and socio-economic conditions. Audit and performance reporting should therefore be read together with contextual indicators such as infrastructure condition, access to basic services, population growth, financial viability and maintenance backlogs. Low-capacity municipalities should receive targeted technical, planning and financial management support, while reporting requirements should remain proportionate to institutional capacity without weakening accountability. Service delivery indicators, including water reliability, sanitation access, road maintenance, electricity disruptions, refuse removal regularity and complaint response times, should be more explicitly integrated into municipal performance reporting.

Accountability mechanisms should be strengthened so that clean audits are connected to citizens’ lived experiences. Auditor General of South Africa’s audit work should be complemented by stronger performance auditing, service delivery monitoring and public reporting. Municipalities should publish accessible audit and service delivery dashboards that allow communities to compare financial compliance with actual service performance. Ward committees, IDP consultations and community feedback mechanisms should be used not only for participation, but also for tracking whether audit findings and performance commitments result in visible service improvements. This would help shift municipal accountability from an inward-looking compliance system to a citizen-centred performance system.

These recommendations operationalise the Audit–Performance Gap Model by linking financial compliance to institutional capacity, contextual realities and accountability mechanisms. The central recommendation is that clean audits should not be treated as sufficient evidence of developmental performance. Instead, municipal oversight frameworks should integrate financial reporting, performance auditing, service delivery indicators and citizen accountability. This would assist municipalities not only to achieve clean audits, but also to deliver reliable water, sanitation, electricity, roads, refuse removal and dignified living conditions to residents.

Limitations

This article has several limitations. It relied on secondary data and did not include primary fieldwork such as interviews, surveys or focus groups with municipal officials, councillors or community members. As a result, the study could not directly capture the lived experiences of residents or the views of municipal practitioners responsible for audit compliance and service delivery implementation.

The article was also based on a qualitative review of documents and did not statistically test the relationship between clean audit outcomes and service delivery indicators. The findings should therefore be interpreted as analytical and conceptual rather than as evidence of a direct causal relationship.

Another limitation relates to the availability, quality and scope of existing reports, including AGSA reports, government performance assessments, academic literature and independent governance assessments. These sources are valuable, but they differ in methodology, reporting periods, indicators and institutional focus. The article focused on South African municipalities generally and did not conduct detailed case studies of individual municipalities. This limits the extent to which the paper can explain municipality-specific political, administrative, financial or community-level conditions. Despite these limitations, the article provides a useful foundation for understanding why clean audit outcomes should be interpreted alongside service delivery performance, institutional capacity and citizen accountability mechanisms.

Conclusion

This article critically examined the relationship between clean audit outcomes and service delivery performance in South African municipalities. Drawing on a qualitative review of audit reports, governance assessments, policy documents and academic literature, the article showed that clean audits are important for financial integrity, but are not reliable standalone indicators of developmental effectiveness. Clean audits primarily reflect compliance with accounting, reporting, legislative and internal control requirements. They do not, on their own, confirm the quality, reliability, accessibility or equity of services delivered to communities.

The analysis demonstrated that audit success may coexist with service delivery failures, infrastructure decline and public dissatisfaction. This disconnect is shaped by the narrow scope of audit criteria, uneven institutional capacity, contextual constraints and weak citizen accountability mechanisms. Municipalities may therefore be technically compliant while still failing to convert financial governance into improved service delivery outcomes.

The articles main contribution is the Audit–Performance Gap Model, which explains why clean audits do not automatically translate into developmental performance. The model shows that the relationship between audit outcomes and service delivery is mediated by institutional capacity, contextual conditions and accountability mechanisms. If South African municipalities are to fulfil their constitutional developmental mandate, municipal oversight must move beyond financial compliance alone. Clean audits should be interpreted together with performance auditing, service delivery indicators and citizen feedback. In this way, audit systems can become tools not only for financial accountability, but also for developmental, responsive and citizen-centred local governance.

Acknowledgements

The author, Ernest K. Mutenda, declares that no financial or personal relationships inappropriately influenced the writing of this article.

Ernest K. Mutenda: Conceptualisation, Data curation, Formal analysis, Funding acquisition, Investigation, Methodology, Project administration, Resources, Supervision, Validation, Visualisation, Writing – original draft, Writing – review & editing. The author confirms that this work is entirely their own, has reviewed the article, approved the final version for submission and publication and takes full responsibility for the integrity of its findings.

The authors received no financial support for the research, authorship, and/or publication of this article.

Data sharing is not applicable to this article as no new data were created or analysed in this study.

The views and opinions expressed in this article are those of the author and are the product of professional research. They do not necessarily reflect the official policy or position of any affiliated institution, funder, agency or that of the publisher. The author is responsible for this article’s results, findings and content.

References