Opposition parties, unions and civic organisations have called for immediate action to fight under-performance in municipalities.
The demands come after the Auditor-General Terence Nombembe released a report on the finances of local government for 2010/2011.
The report revealed that only five percent of municipalities received clean audits while none of the metros received clean audits.
It showed that procurement to the value of R3.5 billion could not be audited because the required information was not available.
Only five percent of Gauteng local government entities received a clean audit and the province had R781 million in irregular expenditure.
“The MEC for local government and housing Ntombi Mekgwe must institute a central provincial blacklist to prevent companies with a bad reputation from conducting any business with municipalities,” the DA's Fred Nel said in a statement.
He said it was a problem when officials and politicians benefit from public money.
“These companies should be blacklisted to prevent any further business with municipalities and government departments.”
The IFP blamed poor performance by municipalities on the ANC.
“The problems besetting the country are the direct result of the ruling party's thinking, which placed ideological correctness above quality and professionalism,” said spokesman Joshua Mazibuko in a statement.
The United Association of South Africa (Uasa) said government should monitor and educate municipal officers to lower corruption and non-performance.
“Mechanisms need to be put in place to educate state employees about these matters, in order to lower the levels of corruption and non-performance,” the trade union said.
The SA National Civic Organisation (Sanco) said the recent audit report was the result of officials not paying attention to the AG's management letters during the audit process.
“We call upon mandated political principals and managerial heads, to ensure that mediocrity is no longer tolerated at all levels in the administration of our municipalities,” Sanco said. – Sapa