Leaked AG report flags Tshwane for ‘serious irregularities’
“For me as a Pretoria resident, this is very worrying,” says well-known Pretoria attorney Wilie Spies.
A leaked report by Auditor General (AG) Tsakani Maluleke, which was set to be presented to the council on January 26, showed that the Tshwane financial statements contained billions in “serious irregularities”.
Tshwane mayor Randall Williams confirmed the AG opinion, saying that the first-ever adverse audit opinion for Tshwane was a disappointment and that they had already begun investigations into the matter.
Williams added “Alarmingly the Auditor Genral has also identified officials and councillors who benefitted from supply chain processes.” He said that the City would investigate the named officials on the AG list and ensure that the culprits would be brought to justice.
Well-known Pretoria attorney, columnist and radio personality Willie Spies said that the findings were concerning.
“For me as a Pretoria resident, this is very worrying. The current coalition is already in power for their second term (although the first term was interrupted),” said Spies in a social media post.
Spies explained that the Auditor General Audit opinion meant financial statements are misrepresented, misstated, and do not accurately reflect the financial performance and health of the city.
Spies summarised aspects that were flagged by the report:
– Irregular expenditure of R10-billion
– Unauthorised expenditure of over R600-million
– Fruitless and wasteful expenditure understated by over R1-billion
– Unjustified supply chain management deviations of over R480-million without reason
– Material misstatement of assets under construction and disclosed as completed, which means they were overstated by R2-billion
– Assets worth over R52-billion were not properly accounted for, not valued properly and the impairment of those assets was not properly assessed
– Leave pay amount of over R800-million not properly accounted for
– Loans and bonds amounting to over R800-million were not correctly accounted for.
Mayor Williams said that National Treasury is providing two former CFOs to assist the city as well as bringing in an external auditing firm to begin provisionally auditing the first half of 2022.
A previous report from July 2022 called Tshwane the worst-performing metro in the province and flagged it for an irregular expenditure of R2.7-billion.
Grouped with eight other municipalities, they were warned by the acting AG business unit leader for Gauteng, Dorothy Rampopo, for the regression in performance reporting.
At the time, she said “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.”
She also raised concern over the city’s reliance on consultants, which Gauteng metros had spent R919.11 million on and the CoT spending the biggest portion of that.
When this report was released, Tshwane said that its financial statements were “fairly and appropriately presented in all material respects for the year under review”.
On December 2, 2022, Tshwane’s CFO Umar Banda was suddenly terminated with just 29 days left in his contract. Court proceedings showed that Banda was fired for financial misconduct after misrepresenting the City’s 2021/22 financial statements to the AG.
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** Article amended
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