Clean Audit Checklist 2026 | 50 Points for Municipal Finance

In the 2022-23 audit cycle, only 34 of 257 South African municipalities achieved a clean audit. The gap between a clean outcome and a qualified or adverse opinion is rarely a single missing document; it is dozens of small gaps in financial statements, compliance, performance reporting, and internal controls. Understanding recent Auditor-General municipal audit results helps focus effort where findings recur.

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. Use this 50-point clean audit checklist to verify each area the audit team will test, and work through it in the months before year-end so that nothing is left to chance. For the broader roadmap and Auditor-General 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 Auditor-General 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 Auditor-General 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 MFMA 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 Auditor-General 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 Auditor-General 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 Auditor-General findings and management letter points have been addressed; remediation is documented and can be demonstrated to the current-year auditors.

Using this clean audit checklist

Use this clean audit checklist 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.

See how Dolobha helps municipalities generate mSCOA-compliant Section 71 and Section 72 reports from a single source of truth and keep financial statements aligned with the checklist — explore the platform.