Ekurhuleni refutes claim that ‘city is hiding AG report’

The City of Ekurhuleni (CoE) is refuting claims that it is hiding the 2022/23 audit report from the Auditor-General of South Africa (AGSA), as claimed by the opposition in the council.

The DA spokesperson for Finance in Ekurhuleni Fanyana Nkosi on January 31 accused the Ekurhuleni mayor, speaker of the council, city manager and MMC of Finance of allegedly concealing the audit report, hiding its adverse findings.

Nkosi claimed his party was reliably informed that on November 19 last year, the AG submitted its draft audit report for the 2022/23 financial year to the CoE.

“The office of the AG also stated they informed the speaker about the delay in the audit on December 1, 2023. She was informed the audit was undergoing a dispute process regarding the findings of the report. However, the speaker, Nthabiseng Tshivhenga, did not formally communicate this information to the council.

“Instead, Tshivhenga, misled councillors in the January 25 extraordinary council meeting, stating the report was not received and delayed on the side of the AG. The mayor was also complicit in the cover-up by remaining silent on the issue, even though he had full knowledge of its whereabouts,” said Nkosi.

Nkosi further stated the AG’s report was due for tabling in the November 2023 ordinary council meeting, as determined by the Municipal Finance Management Act of 2003 (MFMA).

Refuted

The city spokesperson Zweli Dlamini and the mayoral office countered the DA claims with their explanations and details of what had transpired.

In a statement titled, ‘City is yet to receive the audit report from AG’, Dlamini reiterated the metro is yet to receive the 2022/23 audit report from the AG.

“We welcome the fact that the AG has clarified the matter that this report was not finalised because there is a dispute currently being dealt with.

“This should dispel any doubt created by baseless and misleading claims that the city had failed to table the report by January 31, 2024, as stipulated in the MFMA Act,” explained Dlamini.

“The fact of the matter is that without a report there was nothing to table in council. Indeed, we have raised a dispute with the AG. The matter is being attended to by both parties in line with the AG dispute resolution processes in terms of the Public Audit Act.

“The city has a right and obligation to raise issues of concern with the AG so that at the end of the day, the final report is a true reflection of the city’s audit findings.

“We hope the ongoing engagements between the parties will be resolved soon so that the report can be tabled before the council.”

Be patient

Ekurhuleni mayor Sivuyile Ngodwana has called for patience while the relevant parties address the matter.

“I am fully aware that the 2022/23 audit report has still not been tabled in council. I appreciate that the delayed delivery of the AG’s report is frustrating for the work of the council.

“I also understand many councillors might be finding it hard to remain patient at this pressing time, as the current situation might be causing challenges in operating the city’s financials.

“However, I need to emphasise this matter is being attended to by a team from both the municipality and the AG to expedite the release of the report.

“I appeal to all political parties serving in our council to exercise more patience and give space to the teams to finalise their work. At this time, all of us as councillors must ensure that service delivery happens on the ground and that we prioritise our residents,” said Ngodwana.

Background

Giving background information to its claims, the DA said according to Section 126 (1-2) of the MFMA, the accounting officer (city manager) must prepare the annual financial statements of the city within two months after the end of the financial year, and in addition, prepare and submit consolidated annual financial statements within three months after the end of the financial year to the AG for auditing.

“According to subsection 3 of the act, the AG must audit those financial statements and submit an audit report on those statements to the accounting officer within three months of receipt of the statements.

“Furthermore, subsection 4 of the act, states, “If the AG cannot complete an audit within three months of receiving the financial statements from an accounting officer, the AG must promptly submit a report outlining the reasons for the delay to the relevant municipality or municipal entity and the relevant provincial legislature and parliament”.

“With concern that there may be a breach on the side of the AG, the DA sought to determine the whereabouts of the audit report.

“The DA forwarded a memorandum to the office of the speaker on January 30, requesting feedback on the tabling of the audit report.

“To find support for the claims made by the speaker during the extraordinary council meeting, the DA asked if the AG had submitted the audit report and if not, if a report was submitted outlining reasons for not submitting the audit as required per subsection 4 of the act mentioned above.

“No response was received to the questions posed in the memorandum, nor was a copy received of the latter mentioned report from the AG.

“The speaker, therefore, misled the council by stating the audit report was outstanding on the part of the AG, when in fact it had been received by the city.

“According to subsection 126 (5) of the MFMA, once the AG has submitted an audit report to the accounting officer, no person other than the AG may alter the audit report or the financial statements to which the audit report relates.

“The DA is concerned that there may be an attempt by the mayor, city manager and MMC of Finance, to conceal and change the findings of the report, hence the constant vagueness around its tabling.

“According to Section 41 (2) of the Municipal Systems Act, a municipality must table its annual report within one month of receiving the audit report. Given that the draft audit report was received in November 2023, it is in contravention of this act as it should have been tabled in council for approval and deliberation.

“Both the annual report and the audit report are outstanding beyond their legislated deadlines.

“The DA will not rest on its laurels until the audit report is tabled in council, untainted, and untouched by the hands of the corrupt.

“In the meantime, we have called for the resignation of the speaker for misleading and attempting to conceal the whereabouts of the report,” said Nkosi.