A file picture of City of Tshwane workers demonstrating outside the municipal headquarters.   Oupa Mokoena/African News Agency (ANA)
A file picture of City of Tshwane workers demonstrating outside the municipal headquarters. Oupa Mokoena/African News Agency (ANA)

Tshwane's R9.2bn wage bill a problem, says Auditor-General

By Rapula Moatshe Time of article published Jul 9, 2020

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Pretoria - The City of Tshwane’s wage bill of R9.2 billion for an estimated 25 000 workforce was flagged in the recent auditor-general’s report as a contributor to the metro’s problematic financial health. It came under the spotlight amid concerns by the National Treasury regarding the high public service wage bill.

Last month, the SA Municipal Workers Union rejected a request by the Treasury for municipalities to apply for exemption from a multi-year wage agreement, which could have effectively resulted in zero increases.

The City’s financial situation was highlighted at a time when workers expected to receive salary increases of 6.25% with effect from July 26.

The 2018/19 auditor-general report showed that Tshwane’s wage bill was equated to 26% of its revenue, making it a going concern.

According to the City’s 2020/21 budget, the salary bill is projected to climb to R9.6bn.

Another point raised in the report related to losses of electricity and water, which accounted for R1.5bn and R1.1bn respectively.

In the past five years, before the financial year under review, the electricity losses continued to increase with only an exception of a slight decrease in the 2017/18 financial year.

Concerns around the City’s performance were expressed despite that it acquired an unqualified audit opinion with findings. The report also brought into question the ability of the City to collect revenues. It found that Tshwane didn’t receive a large amount of revenue billed.

The City only received 62%.

Failure to collect revenues negatively affected the City’s ability to provide basic services.

The metro was also criticised for its poor use of consultants after it spent R213 million on them to correct the fixed asset register and verify assets.

However, despite their work, there were “still identified material findings on assets including R367m of completed projects that were not recorded under the correct category of property, infrastructure and equipment”.

At least 13 of 33 service delivery targets were unmet and some projects were either halted or delayed.

Those affected include R381m of assets under construction such as the upgrading of the Temba and Babelegi wastewater treatment works.

However, the situation was not all doom and gloom as the metro was praised for improving its finances and after it achieved a R2.9bn surplus from R2.4bn in the 2017/18 financial year.

This was achieved through limiting expenditure increases to below that of revenue tariff adjustments.

Pretoria News

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