Pretoria – The R180m that the City of Tshwane spent on its free Wi-Fi project had been red-flagged as unlawful and irregular expenditure by the Auditor General (AG), the mayor's office said earlier this week.This was revealed during Tshwane Mayor Solly Msimanga's feedback on his first 100 days in office in Pretoria.Member of mayoral committee for corporate and shared services Cilliers Brink told News24 earlier this week that during a steering committee meeting with the AG, it was revealed that the free Wi-Fi project was being paid for by means of grant funding under a section of the Municipal Finance Management Act (MFMA), meant to fund non-profit organisations and charities.The non-profit company linked to the deal is called Project Isizwe."Last month the Auditor General informed the new DA-led city government that section of the MFMA does not in fact apply to the deal, and that all city money spent on free Wi-Fi therefore constitutes irregular expenditure," Brink said."The other problem is that the city simply cannot afford to continue funding free Wi-Fi on its own."Digital advertising proposedHe said the DA was now tasked with finding a lawful and financially sustainable way of keeping the free Wi-Fi offering."We really want to save this project, and so we have engaged Project Isizwe on ways to do so. They have made several proposals to this end," Brink said.One such idea was to sell digital advertising space on the interface to generate sufficient revenue to make the project self-funding. The pilot would begin in February and run for six months."We have agreed to pilot the commercial rights option for the sole purpose of testing its commercial viability."He said the pilot did not bind the city to any of its outcomes."And all proposals will be subject to rigorous scrutiny by transactional advisers to ensure that Tshwane never again incurs irregular expenditure on this project," Brink said.'There was no funding'The AG's spokesperson Africa Boso told News24 that this matter had not been tabled in a report and it had not been presented to the city's council, therefore the AG would not be commenting on it. He referred News24 back to the city for further response.However, Project Isizwe CEO Zahir Khan told News24 that the process of implementing free Wi-Fi in Tshwane had begun in 2013, and that he had not been aware of any irregularities in the agreement between the city and his organisation, which provided similar services to other municipalities and private clients across the country.To his understanding, the MFMA funding model in question was open to any entity which provided a service to the wider community.He said prior to the creation of the "TshWi-Fi" project, as it is popularly known, there had been no policy regarding the funding of projects such as those. This was where the AG's words of caution may have stemmed from, Khan said."Back then there was no funding of Wi-Fi for the community."International awardHowever, he maintained that there was nothing untoward about the project as it was "a service being funded by the city, on behalf of its community".He said if the AG had raised a red flag over irregular expenditure, the solution would be to provide a solution for the future instead of canning the entire project."Now the city has to fix it for the future. There is plenty of commercial opportunity."There will be no end to the service, it will continue," Khan said.In October, the project won an international award for the Best Affordable Internet Connection at the Wi-Fi NOW awards in London.The project delivers free Wi-Fi to more than two million citizens in Tshwane, which Khan says is the biggest deployment of its kind on the African continent, with over 1 000 Wi-Fi hotspots.