Pretoria - The DA-led Tshwane municipality has clinched an unqualified audit report for 2016/2017 financial year.

Executive mayor Solly Msimanga said he was pleased with the news by the Auditor-General that his administration received a positive feedback within its first year of office.

"This administration has, to date, made great strides towards towards stabilisng its finances.  

This was achieved by strengthening the controls over supply chain processes, slashing unauthorised and unnecessary expenditure, extricating the city from unlawful and expensive contracts like Peu contract which the A-G flagged as one of the biggest items of irregular expenditure which has now been addressed," Msimanga said.

He was speaking to the media ahead of a council sitting on Thursday at Sammy Marks Council Chamber, where he would formally table the report.

He said the city was in the process of disentangling itself from unaffordable broadband and fleet management contracts and it was optimistic that it would free itself from these contracts.

"This has contributed to our successes in correcting the R2 billion deficit we inherited and has resulted in the surplus in these financial statements. It is common cause that a municipality needs to facilitate financial sustainability and resilence and improve the municipality's capacity on its developmental and service delivery mandate on a sustainability basis," Msimanga said.  

MMC for Finance Mare-lise Fourie said, although the City celebrated its unqualified audit report, it was concerned about "the increase in consumer debt".

"Consumer debt increased by R1.6 billion to R10.2 billion as at 30 June 2017. The difficult economic climate and the rise in unemployment levels have had an impact on payment levels," Fourie said.

She said another area of concern was the material losses of R1.6 billion on electricity.

"Technical losses incurred during the distribution of electricity amounted to R526.7 million. Lack of maintenance over a number of years has resulted in vulnerable infrastructure that will have to be replaced in future years," Fourie said. 

In terms of the audit report, unauthorised expenditure was significantly reduced from R1.658 billion in 2015/2016 to R620 million in 2016/17.

Fourie said: "Unauthorised expenditure is defined as expenditure incurred otherwise thanin accordance with an approved budget. This over-expenditure can mainly be attributed to employee-related costs, bulk purchases, depreciation, finance charges and contracted services."

Pretoria News