Tshwane has incurred irregular expenditure of R4bn - DA

2016-01-26 18:46

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Pretoria - The City of Tshwane has incurred R4bn in irregular expenditure, the DA alleges.

The party said it was in possession of a management letter from the auditor general directed to the municipality about the possibility of it getting a disclaimed audit.

"According to the Management Letter, the city has incurred the stupendous sum of R4bn in irregular expenditure, of which only R1.2bn has been disclosed in the AFS [annual financial statement] and the balance thereof being discovered during the audit," said the DA's Solly Msimanga on Tuesday.

"This is the highest sum of irregular expenditure ever incurred by a metro anywhere in South Africa. This means that one-sixth of the city’s operating budget is spent on contracts illegally entered into, indicating the pervasiveness of corruption, lack of internal controls and effective leadership throughout the city’s administration."

Msimanga said the findings, which were contained in a letter that was sent in 2015, also indicated that the city’s Asset Register was not accurate and up to date, that take on balances for accrued leave to the value of R586m could not be substantiated, and that the city’s exposure to the non-disclosure of assets regarding the PEU contract and cancellation was indeterminable. The PEU contract was given to a service provider of the city's pre-paid electricity metering service.

City of Tshwane spokesperson Selby Bokaba declined to comment on the matter, and said they would do so once the AG released his report.

"The audit report has not been finalised yet and as a result, we are unable to comment on a report that is doing the rounds in the media. As far as we are concerned this purported audit report and/or Management Letter have no standing, status and are not credible. Let us await the AG’s finalisation and release of the audit report to enable us to meaningfully engage with its contents," said Bokaba.

AG spokesperson Mandla Radebe said he would only comment on the matter once the reports had been tabled at the end of the month.

"It is only then that they will become available to the public. As part of the general rule, the management report is not a public document, since it is a communication medium between the AGSA [Auditor General of SA] and its auditees during the audit process. For this reason, the AGSA cannot comment on its contents," said Radebe.

But Msimanga said they were troubled by certain aspects of the letter which failed to deal with the recovery of at least R400m of irregular expenditure in the previous financial year.

He said this included the collection of repayment of the irregular expenditure incurred in respect of the illegal Ward Committee elections and remuneration paid of approximately R72m from the Mayor, the Municipal manager, the Head of the Secretariat in the Speaker’s office and councillors who voted in favour of the illegal measure.

The party further alleged that the AG’s review of the PEU contract found it to have been illegally entered into. Msimanga added that the city was losing a lot of money due to illegal electricity connections.

"Despite the mayor’s solemn undertakings to reign in and reduce electricity losses to theft, illegal connections, bad maintenance, inaccurate meter readings and perpetual estimations and other technical reasons, electricity losses increased by more than 2% from last year and now stands at 16%, accounting for approximately R1bn in lost revenue," he said.

Read more on:    da  |  pretoria

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