GOVERNANCE IN 60 SECONDS
The Constitutional Court has declared the Public Procurement Act 2024 unconstitutional and invalid in its entirety.
The Special Tribunal set aside SAA's R85 million Flyfofa lease extension for failing to follow a fair and competitive procurement process.
The SIU has preserved R42.4 million in assets linked to Tembisa Hospital corruption, exposing systemic accountability failures.
An appeal court ordered Emfuleni's former CFO to pay R100,000 and apologise for defaming an SCM manager, highlighting the risks of unfounded corruption allegations.
National irregular expenditure rose to R268.13 billion, with 178 municipalities now having disciplinary boards established.
CIPC remuneration governance guidance remains relevant to public and state-owned companies convening affected AGMs.
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GOVERNANCE RADAR
Development | Key Update | Status |
Public Procurement Act declared unconstitutional | The Constitutional Court declared the Public Procurement Act 2024 invalid in its entirety, finding that Parliament failed to facilitate proper public participation and that the legislative process was unreasonably rushed. | Act struck down on 17 September 2026; existing procurement arrangement remain relevant pending new legislation and further implementation guidance. |
Municipal disciplinary boards increasing | The number of municipalities with established disciplinary boards rose from 147 to 178 in 2024/25, while financial misconduct allegations fell but formal charges rose 56% to 313 officials. | Accountability mechanisms strengthening, though irregular expenditure continues to rise. |
Further reading: Constitutional Court of South Africa, 2026. Premier of the Western Cape Government and Another v Speaker of the National Assembly and Others; City of Cape Town and Others v Speaker of the National Assembly and Others [2026] ZACC 37, 17 September. National Treasury, 2026. Strengthening Municipal Financial Management: MFMA Compliance Report 2024/25, 13 May.
GRC BY THE NUMBERS
R2.8bn | in FSCA penalties imposed on 76 persons and entities during the 2025/26 enforcement year, signalling a sharper regulatory stance on financial misconduct, market integrity and anti-money-laundering failures. |
2,898 | security-compromise notifications were received by the Information Regulator in 2025/26, reflecting the growing pressure on POPIA compliance, breach reporting readiness and cyber-risk oversight. |
10 | top regional risks are highlighted in the IRMSA Risk Report 2026/27, with governance and leadership failure ranked first for Southern Africa. |
Public procurement Act: When process matters more than policy
THE GOVERNANCE LENS
Public Procurement Act: When Process Matters More Than Policy
On 17 September 2026, the Constitutional Court declared the Public Procurement Act 2024 unconstitutional and invalid in its entirety. The Court found that Parliament failed to facilitate meaningful public participation, particularly after substantial changes were made to the Bill’s preferential-procurement provisions. The judgment confirms that consultation is not a procedural afterthought: when lawmaking is rushed and stakeholder input is constrained, even major reform can fail on process integrity.
The Governance Lens
Public participation in lawmaking is a constitutional requirement, not a box-ticking exercise.
Governing bodies should ensure that stakeholder consultation is meaningful, not merely procedural.
Rushed decision-making can invalidate even well-intentioned reforms.
Boards should document how stakeholder input was considered and addressed.
The judgment reinforces that process integrity is as important as policy outcomes.
SAA Lease Extension: Board Deviations Require Scrutiny
The Special Tribunal set aside SAA’s R85 million Flyfofa lease extension after finding that the airline had not followed a fair and competitive procurement process. In September 2015, the SAA Board approved a deviation from its standard aircraft-procurement process as a risk-mitigation measure, extending the lease for 36 months without National Treasury approval. The decision is a reminder that board approval does not cure a defective process: deviations still need a lawful basis, proper documentation and independent scrutiny.
Board-approved deviations from procurement policy still require compliance with constitutional principles.
Risk-mitigation cannot justify bypassing fair and competitive processes.
Treasury approval requirements exist for good reason and should not be circumvented.
Boards should document the rationale for deviations and ensure independent scrutiny.
Historical procurement decisions remain subject to retrospective review and challenge.
Further reading: Constitutional Court of South Africa, 2026. Premier of the Western Cape Government and Another v Speaker of the National Assembly and Others; City of Cape Town and Others v Speaker of the National Assembly and Others [2026] ZACC 37, 17 September. Special Investigating Unit, 2026. SIU secures judgment to set aside R85 million SAA-Flyfofa dry-leasing contract and is set to recover profits made by Flyfofa, 18 September. The Citizen, 2026. Tribunal sets aside SAA’s R85 million Flyfofa lease extension, 18 September.
Accountability must produce consequences. Not just reports.
GOVERNANCE INTELLIGENCE
Tembisa Hospital: Accountability Systems Must Produce Consequences
Intelligence Brief
The SIU has preserved R42.4 million in assets linked to Tembisa Hospital corruption, where an accused kingpin nurtured relationships with senior hospital officials through lavish bribes, including luxury vehicles, properties and jewellery. Transactions were often unnecessary, undelivered or only partially delivered, violating the Constitution, PFMA, Public Service Act, Treasury Regulations and anti-corruption legislation.
The broader lesson is that accountability systems must be designed to detect, escalate and resolve red flags, not merely to record transactions after the fact.
Recommended Actions
Governing bodies should require regular assurance that procurement, supply-chain and financial controls are operating effectively.
Whistleblowing channels require visible protection and credible follow-through.
Senior officials should be held accountable for employing individuals with known integrity concerns.
Audit and risk committees should monitor whether accountability mechanisms produce consequences, not only reports.
Boards should review whether their information systems actually surface problems or merely document them.
Municipal Failure: Disciplinary Boards Are Not Enough
National irregular expenditure rose to R268.13 billion in 2024/25, up from R264.10 billion the year before. While 178 municipalities now have disciplinary boards established (up from 147), and financial misconduct allegations fell from 1,116 to 614, the number of officials formally charged with financial offences rose 56% to 313.
The data suggests that accountability mechanisms are becoming more visible, but not yet sufficiently preventative. Rising irregular expenditure indicates that disciplinary processes must be paired with stronger internal controls, consequence management and leadership accountability.
Recommended Actions
Municipal councils should assess whether disciplinary boards are independent, resourced and effective.
Governing bodies should require reporting on both misconduct allegations and outcomes.
Audit committees should track whether consequences follow from findings of wrongdoing.
Boards should evaluate whether internal controls prevent irregular expenditure, not only detect it.
Leadership accountability should extend beyond individual misconduct to systemic failures.
Further reading: South African Government, 2026. Special Investigating Unit secures R42.4 million in cash and assets linked to bribes paid to Tembisa Hospital officials, 27 September. National Treasury, 2026. Strengthening Municipal Financial Management: MFMA Compliance Report 2024/25, 13 May. The Citizen, 2026. SIU secures R42m in assets from bribes paid to Tembisa Hospital officials, 27 September.
RESOURCE OF THE PERIOD
Moonstone: Procurement Act Struck Down – What Happens Now?
Overview
Moonstone's September 2026 analysis examines the Constitutional Court's judgment striking down the Public Procurement Act 2024, explaining what the decision means for the existing procurement framework and what reforms may follow.
Practical Benefit
The analysis assists boards, company secretaries, procurement officers and compliance teams in understanding the current legal position, the implications for ongoing procurement processes and what to expect from future legislative reform.
Further reading: Moonstone Information Refinery, 2026. Procurement Act struck down: What happens to the reform now?, 28 September.
For your next board, committee or management meeting, identify one recent governance decision and ask whether the process record would withstand external scrutiny. Was the rationale documented, were stakeholders meaningfully engaged, and are follow-up actions assigned?
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Until next time,
The Editorial Team
The Hub Briefing