Honourable Members,   The 2024 Auditor-General’s Local Government Audit Report highlights the persistent deterioration in financial management, governance and service delivery performance in many municipalities across the country.   The report paints a stark picture of widespread financial mismanagement, non-compliance, irregular expenditure, lack of consequence management and weak internal controls in a significant number of municipalities.   The national government is therefore taking steps to address the challenges in local government.   While some of these challenges are specific to each municipality, many have their roots in systemic problems and must be addressed through structural reform.   The Department of Cooperative Governance has embarked on a process to update the White Paper on Local Government to ensure that the local government system is effective and fit-for-purpose.   The Minister of Cooperative Governance and Traditional Affairs is engaging in a series of consultations with political parties, representatives of provincial and local government, and social partners in this regard, and just this week held a dialogue to contribute to the review of the White Paper.   The issue of optimising the number of municipalities, as well as the appropriateness of the two-tier system of local government, must be considered as part of this process.   While there are strong arguments for having fewer municipalities, there are also strong reasons to ensure that local government remains local and accountable to the people that it serves.   These decisions must therefore be based on a careful assessment of the evidence, and must aim to ensure that municipalities are financially sustainable, to remove any duplication of fuctions, and to improve service delivery, particularly in areas where municipalities lack a sufficient revenue base.   It must also be noted that the determination and the re-determination of municipal boundaries is done by the Municipal Demarcation Board, which is an independent constitutional institution.   There is therefore no need for the appointment of a commission of inquiry to attend to the matters raised by the Auditor-General, nor the review of municipal boundaries.