Pretoria - The Tshwane metro has been labelled the worst performer among Gauteng municipalities by dint of accounting for the highest irregular spending of R2.7 billion for the financial year 2020/2021.
The auditor-general’s (AGs) acting business unit leader for Gauteng Dorothy Rampopo, this week expressed concern about the astronomical irregular expenditure of R3.82bn shared between Tshwane and the City of Joburg.
The City of Tshwane, however, was flagged for incurring the larger chunk of irregular expenditure of R2.7bn, followed by Joburg’s R1.1bn. The irregularly spent R2.7bn, however, showed a decline from R2.9bn it incurred in the 2018/2019 financial period.
Despite concerns raised about its financial health, the City consecutively clinched an unqualified report with findings.
Rampopo revealed the financial performance of Gauteng’s municipalities following last month’s release by the AG of Municipal Finance Management Act audit outcomes.
She noted the province had spent R919.11 million on consultants for certain elements of financial reporting since 2016/17, with the City of Tshwane spending most of this to produce a compliant fixed asset register.
“Of great concern is material corrections on fixed assets that had to be made in the submitted financial statements. Our call is that municipalities need to ensure that expenditure on consultants is done prudently with adequate monitoring, including ensuring that there is adequate skills transfer from consultants to officials.
“In addition, not introducing them late in the process, but to institutionalise the disciplines throughout the year to ensure the process is effective and adequate value is derived,” she said.
She said the AG had seen a regression in performance reporting, as eight municipalities (Joburg, Tshwane, Sedibeng, West Rand District, Emfuleni, Lesedi, Mogale City and Rand West City) “did not publish credible performance reports, which negatively affected the ability of both municipalities and residents to properly assess services promised by the administration”.
“The poorly prepared performance reports and significant corrections in response to the audit highlights the need for auditees to improve the credibility of in-year reporting throughout the year. Councils and municipal public accounts committees also use in-year reporting for monitoring purposes, and without reliable information, their monitoring will be ineffective,” Rampopo said.
She said the AG issued a material irregularities notification based on harm to the public due to the poor quality of water supplied to Hammanskraal residents.
“In some instances, funds have been recovered or are in the process of being recovered. At the City of Tshwane, for example, we issued material irregularities relating to a payment made to an incorrect beneficiary, and the accounting officer instituted an investigation to identify the responsible officials.
“Furthermore, the National Prosecuting Authority recovered an amount of R23 169 447 and paid it over to the municipality on November 10, 2021,” Rampopo said.
Reacting to the AG’s report, the City said last month that its unqualified audit opinion stated that the metro’s financial statements were “fairly and appropriately presented in all material respects for the year under review”.
“This means that the City is operating in compliance with the Local Government: Municipal Finance Management Act. Our multiparty coalition government respects the independence of the Office of the AG, and therefore we have taken note of the points of concern raised by the AG during the audit process, which include material water and electricity losses. These are largely driven by ageing infrastructure, illegal connections and electricity theft,” the City said.
It expressed its intention to adequately address all of the AG’s concerns, saying that in some cases it had already begun the work.
“We have boosted our debt collection through the #TshwaneYaTima campaign, and the roll-out of prepaid meters is ongoing. We have also increased fines for illegal connections and electricity theft to R200 000 for individual or household accounts, and R10 million for business accounts,” it said.
Pretoria News