The City of Tshwane’s qualified audit outcome for the 2023/2024 financial year has been described as a dismal performance on the part of the metro, but better than last year’s audit report.
This was the view expressed by Robert Cameron-Ellis, chairperson of the city’s Audit Performance Committee, who was reacting to the audit report presented by a senior official Xolani Zicwele from the Auditor-General’s (A-G) office during an ordinary council meeting on Thursday.
“The A-G has qualified us on a whole range of issues. It is a dismal performance but better than last year,” he said.
According to him, the R3.6 billion of unauthorised, irregular, fruitless, and wasteful expenditures (UIFW) incurred by the city was unacceptable.
“Having said that, we should expect the reported UIFW to go up before they go down,” he said.
The A-G expressed concern about the inadequate systems for identifying and disclosing all irregular expenditures.
Zicwele said that in the current year, there were irregular expenditures that were incorrectly recorded in that they excluded VAT.
However, he said the city has made some progress in addressing areas of concern, including employee costs, retention of creditors, and reducing fruitless and wasteful expenditures, compared to the previous year.
“Overall, the city is still sitting with a qualification, but in addition, we do notice a reduction in the qualification areas,” he said.
Cameron-Ellis lamented that the city’s liquidity ratio was actually worse than reported, due to unaccounted accruals that were not included in the calculation.
He noted that a staggering R8 billion worth of assets had gone unaccounted for just five years ago.
“We know now about it. We know that we need to repair and maintain those assets. The only thing that we got wrong is the valuations. It is a technical issue that can be fixed,” he said.
He said organisational culture in the city ought to change, but commended City Manager Johann Mettler for driving cultural shift.
He said one of the major weaknesses is the lack of effective consequence management, which fails to hold accountable those implicated in corrupt activities.
He highlighted that a significant portion of the R3.8 billion in missing accruals, as mentioned by the A-G, was attributed to electricity sales.
Tshwane Mayor Nasiphi Moya said the city has begun implementing corrective measures, as highlighted by the A-G, to address concerns about officials’ incompetence in managing the city’s finances and performance.
“We know that the senior management of the city are educationally qualified people who come with lots of years of experience in the work that they are doing and to be told that they are incompetent in discharging their responsibilities, it worries us,” she said.
She said a consequence management committee (CMC) has been established to provide oversight over financial, legal, and human resources matters in the city.
The CMC recently received an update on the ongoing forensic investigations and disciplinary actions, revealing significant progress.
A total of 180 forensic investigations have been completed, leading to recommendations for disciplinary action against employees in 129 cases.
Furthermore, Moya said, 39 cases have been referred for criminal prosecution and 48 cases have been identified for financial recoveries.
She said R3.6 billion in unauthorised, irregular, fruitless, and wasteful expenditure was investigated in Quarter 2, with findings now being processed by the Municipal Public Accounts Committee for further action.
At least 67 officials have been dismissed following due disciplinary processes, while 31 officials have received final written warnings.
Moya said 70 cases have been referred to the Financial Disciplinary Board – the first time such referrals have been made – further strengthening financial oversight mechanisms.