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Tshwane, Ekurhuleni spend exorbitant amounts on financial consultants, says Auditor-General

Auditor-General Tsakani Maluleke. Picture: Thobile Mathonsi/African News Agency (ANA)

Auditor-General Tsakani Maluleke. Picture: Thobile Mathonsi/African News Agency (ANA)

Published Jun 17, 2022

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Pretoria - The Tshwane and Ekurhuleni metros spent exorbitant amounts of money on financial consultants while having crucial vacancies in their finance units.

This was revealed in Auditor-General Tsakani Maluleke’s 2021 consolidated general report on the local government audit outcomes.

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The report showed that the City of Tshwane has a vacancy rate of 12.4%. The city’s finance unit spent R121 million on consultants to help prepare its annual financial statements.

Despite spending millions on consultants, the City of Tshwane obtained an unqualified audit with findings four times in a row. The AG pointed out lack of procurement and contract management; failure to prevent irregular expenditure; failure to effect consequence management; lack of strategic planning and performance management; poor asset management control and limited revenue management as the reasons for the unqualified report.

Tshwane has an overall vacancy rate of 28% and 27% of it is for senior management positions. The municipality also suffered water losses of more than R1.2 billion.

Ekurhuleni spent more than R19.1m on consultants despite having a 26% vacancy rate in its financial unit. While the AG found that Ekurhuleni has good financial management controls, she expressed concern about the city’s review and monitoring compliance system. Like Tshwane, Ekurhuleni also suffered water losses of R1.2bn.

Maluleke, however, found that the city was executing consequence management for wrongdoers. Ekhurhuleni obtained its second clean audit in a row.

Despite having a full staff complement in the finance unit, the City of Joburg failed to obtain a clean audit. Unlike Ekurhuleni and Tshwane, the city did not hire any consultants.

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The AG raised similar concerns to those of Tshwane, including failure to prevent irregular expenditure. Maluleke also flagged uncompetitive and unfair procurement, as well as irregular expenditure related to supply chain management.

Joburg failed to spend its infrastructure grant by 10%. The city failed to disclose its water losses despite the increasing number of broken pipes and leaking water in every part of it.

Midvaal Local Municipality, one of Gauteng’s smallest but flourishing municipalities, used R2.9m on consultants. It obtained five clean audits in a row.

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Midvaal has a vacancy rate of 9% in its finance unit. Emfuleni Municipality – which has shown a significant improvement in its audit outcomes – spent R1.3m on consultants while having a vacancy rate of 50% in its unit.

Lesedi Municipality has a vacancy rate of 40% in its finance unit but spent R4.4m on consultants.

The municipalities which did not use consultants included Rand West Local Municipality, which has a vacancy rate of 54% in its finance unit. Rand West dropped from unqualified with findings to qualified audit with findings.

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Mogale City has a vacancy rate of 30% in its finance unit.

Sedibeng District Council has a vacancy rate of 12.5% in the finance unit while West Rand District has a vacancy rate of 63%.

Of all Gauteng municipalities, Merafong Local Municipality was listed as a poor performing municipality. It dropped from unqualified audit with findings to adverse findings against it.

The municipality also has a vacancy rate of 40 in its finance unit but did not use consultants.

Pretoria News

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