4.2 National and Provincial Treasury The National Treasury told the Committees that some municipalities were not taking the Auditor-General's (AG) reports seriously and that is why these municipalities keet on receiving adverse audit opinions. The National Treasury is of the view that these municipalities have a challenge when it comes to financial management hence the annual reports are not complying with the MFMA. The National Treasury reported that most municipalities do not spend their conditional grants on the programmes they are meant for. Furthermore, the National Treasury reported that the municipalities are owed by certain sector departments. The National Treasury further reported that another challenge for municipalities is the quality of their reports. However, the National Treasury assured the Committees that skilled officials will be seconded to the municipalities.