Municipal Clean Audit Checklist 2026: 50 Items Your Finance Team Must Verify

A municipal clean audit checklist for 2026 is one of the most practical tools your finance team can use before the Auditor-General’s engagement. In the 2022–23 cycle, only 34 of 257 municipalities achieved a clean audit. The difference is rarely a single missing document; it is dozens of small gaps in financial statements, compliance, performance reporting, and internal controls. Use this 50-point municipal clean audit checklist 2026 to verify each area your audit team will test. Work through it in the months before year-end so that nothing is left to chance. For the broader roadmap and AG focus areas, see our guide on how to achieve a clean municipal audit; for the legal baseline, see MFMA compliance requirements for 2026.

1. Financial Statements (Items 1–15)

These items cover the quality and completeness of your annual financial statements (AFS), alignment with mSCOA and GRAP, and the supporting records the AG will rely on.

• 1. The chart of accounts is fully aligned with the current mSCOA segment structure and segment codes; no legacy or non-compliant codes remain in use.
• 2. All material revenue is recognised in line with GRAP 9 (Revenue from Exchange Transactions) and GRAP 23 (Revenue from Non-Exchange Transactions); classification between exchange and non-exchange is documented.
• 3. The asset register is complete, reconciled to the general ledger, and includes all material property, plant and equipment with correct classification and segment coding.
• 4. Depreciation and amortisation are calculated using appropriate useful lives and methods; useful lives and residual values have been reviewed and are documented.
• 5. Provisions (e.g. leave pay, legal claims, restoration) are recognised and measured in accordance with GRAP 19; supporting calculations and assumptions are on file.
• 6. The cash flow statement is prepared in accordance with GRAP 2; operating, investing, and financing cash flows are correctly classified and reconcile to the statement of financial position.
• 7. All required AFS disclosure notes are present and complete; accounting policies are stated and applied consistently with prior years.
• 8. Financial instruments (receivables, investments, payables, borrowings) are classified and measured in line with GRAP 104; impairment of receivables (expected credit losses) is applied where required.
• 9. Non-cash-generating assets have been assessed for impairment (GRAP 21) where indicators exist; impairment losses are recognised and disclosed.
• 10. Intangible assets (e.g. software) are recognised and amortised in line with GRAP 102; capitalisation vs expense treatment is documented and consistent.
• 11. The AFS reconcile to the underlying general ledger and to the Section 71 in-year reports; material differences are explained and resolved.
• 12. Prior-period comparative figures are correctly stated and any restatements are disclosed in line with GRAP 3.
• 13. Commitments and contingencies are disclosed in the notes where required; supporting schedules are available for audit.
• 14. Related-party transactions and balances are identified, measured, and disclosed in accordance with GRAP 20.
• 15. The statement of financial performance, statement of financial position, and statement of changes in net assets are complete and cross-cast; notes tie to the primary statements.

For detailed application of the accounting framework, see our GRAP standards guide for municipalities.

2. Compliance (Items 16–30)

These items cover MFMA obligations, supply chain management, mSCOA reporting, and in-year reporting deadlines that the AG tests for compliance.

• 16. The annual budget was tabled and adopted within the MFMA timeframes; proof of tabling and council resolution is on file.
• 17. Expenditure is within the approved budget; virement has been applied only where permitted by the Act and Treasury regulations.
• 18. Section 71 monthly reports have been submitted to National Treasury and the relevant provincial treasury on time for every month of the financial year.
• 19. Section 71 reports are prepared from the same source data as the general ledger; reconciliations between Section 71 and the AFS are completed and documented.
• 20. The Section 72 mid-year report was tabled in council and submitted within the required period; the report is consistent with the underlying records.
• 21. Supply chain management (SCM) policy and delegations are in place, updated, and aligned with the Municipal Supply Chain Management Regulations.
• 22. All procurement above the relevant thresholds followed the required process (competitive bidding, quotations, or approved deviations); documentation is complete and filed.
• 23. Bid committees were constituted and operated in line with SCM regulations; minutes and declarations of interest are available.
• 24. Contract register is up to date; all material contracts are recorded with parties, values, and expiry dates.
• 25. Unauthorised, irregular, and fruitless and wasteful expenditure has been identified, reported to council, and dealt with in line with MFMA requirements.
• 26. mSCOA classification has been applied consistently to revenue, expenditure, and balance sheet items in both in-year reports and AFS.
• 27. Credit control and indigent policies are in place and applied; revenue collection and write-offs are in line with policy and budget.
• 28. Banking and investment practices comply with Treasury regulations; no unauthorised accounts or investments.
• 29. Council and council committee meetings where financial matters were approved are properly minuted; resolutions are traceable to implementation.
• 30. All statutory returns and submissions required by National Treasury or the provincial treasury for the year have been submitted on time.

3. Performance Reporting (Items 31–40)

These items cover the Service Delivery and Budget Implementation Plan (SDBIP), the Annual Performance Report (APR), and the evidence the AG will request for performance information.

• 31. The SDBIP was approved and published within the required timeframe; it is aligned with the adopted budget and IDP.
• 32. All SDBIP indicators are clearly defined, measurable, and have verifiable targets for the year.
• 33. Performance data is collected and recorded throughout the year; responsibility for each indicator is assigned and documented.
• 34. The APR has been prepared and reflects actual performance against the SDBIP; targets and actuals are clearly stated and consistent with the SDBIP.
• 35. Evidence files exist for each material performance indicator; evidence is sufficient to support the reported actuals (e.g. sample reports, registers, system printouts).
• 36. No material performance indicators are missing or unreported in the APR; explanations for non-achievement are provided where applicable.
• 37. The APR has been reviewed and approved by the Municipal Manager and tabled in council within the required period.
• 38. Performance information in the APR reconciles to or is consistent with any supporting management reports and systems.
• 39. Quality assurance or internal review of performance data has been performed before finalisation of the APR.
• 40. The audit committee has been briefed on the APR and performance management process; any concerns have been addressed.

4. Internal Controls (Items 41–50)

These items cover the control environment: segregation of duties, IT controls, governance, and documentation that the AG assesses for material weaknesses.

• 41. Segregation of duties is documented and applied for high-risk processes (e.g. payments, receipts, reconciliations, master data changes); no single person controls a process end-to-end where inappropriate.
• 42. Bank reconciliations are performed and reviewed monthly; reconciling items are investigated and cleared within an agreed timeframe.
• 43. Debtors and creditors reconciliations (including rates and service debtors) are performed and reviewed; ageing and follow-up are documented.
• 44. IT general controls (access, change management, backup and recovery) are in place and documented; access rights are reviewed periodically.
• 45. The audit committee is properly constituted, meets as required, and has documented oversight of internal audit, risk, and financial reporting.
• 46. The risk register is up to date; key financial and operational risks are identified, assessed, and linked to mitigating controls.
• 47. Internal audit plan has been executed; findings have been reported to the audit committee and management; material findings have action plans with owners and dates.
• 48. Key policies (finance, SCM, asset management, credit control, etc.) are documented, approved, communicated, and available to staff.
• 49. Document management and filing (electronic or hybrid) are organised so that audit evidence can be retrieved quickly; no critical documents missing or unlocatable.
• 50. Prior-year AG findings and management letter points have been addressed; remediation is documented and can be demonstrated to the current-year auditors.

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Use this municipal clean audit checklist 2026 as a living document: assign owners to each section, tick items off as they are verified, and escalate any gaps before the audit starts. Combining a disciplined checklist with strong MFMA compliance and correct GRAP application puts your municipality in a much stronger position for a clean audit outcome. Dolobha is built to support South African municipalities with mSCOA-aligned chart of accounts, Section 71 and 72 reporting, and integrated financial and performance data — so your team spends less time hunting for evidence and more time closing the gaps that matter. If you would like to see how Dolobha can support your clean-audit preparation, get in touch.