Parliament has revealed that government entities and municipalities owe the Auditor-General of South Africa (AGSA) a total of R1.83 billion in unpaid fees.
Wouter Wessels, chairperson of the Standing Committee on the Auditor-General (SCoAG) revealed that this is a sharp increase from the R1.35 billion recorded in March 2025.
He said there was growing concern over the rising debt but also welcomed the interventions being put in place by the National Treasury.
This comes after Accountant-General, Shabeer Khan, briefed the committee on the reasons behind the debt and plans to ensure repayment and financial accountability in state institutions.
Of the R1.83 billion owed, municipalities are responsible for R437 million and state-owned entities owe R644 million.
The culprit SOEs
Some of the largest debtors are Denel with R82 million, the South African Post Office with R63 million, South African Express with R21 million, Pelchem with R11 million, Autopax with R6 million, and Mango Airlines with R2 million.
“A concern of the committee is that some of these SOEs are under business rescue or liquidation,” said Wessels.
“The committee welcomes the escalation of the National Treasury’s interventions using Section 216(2) of the Constitution, which empowers it to withhold funds from municipalities that breach the Municipal Finance Management Act (MFMA). In December 2024, after National Treasury issued warning letters, R460 million was collected from municipalities,” he added.
Later, in March and July 2025, Treasury withheld parts of the Local Government Equitable Share from defaulting municipalities and only released the funds once proof of payment was provided.
“The committee, however, calls for avenue other than withholding municipalities’ equitable share, as this is detrimental to service delivery, and implores National Treasury to explore interventions aimed at ensuring that municipalities budget properly for the audit fees.
“Further discussions will also take place on alternative methods of appropriating for these audit fees whilst still protecting the independence of the AGSA,” said Wessels.
Wessels said he is pleased with the joint work of the National Treasury and AGSA in monitoring defaults, enforcing payment conditions, and recommending write-offs where entities are in liquidation.
