South Africa 27.1.2016 11:00 am

Sixth of Tshwane’s budget spent on ‘illegal contracts’

Tshwane mayor Solly Msimanga.
Picture: Christine Vermooten

Tshwane mayor Solly Msimanga. Picture: Christine Vermooten

Auditor-General Kimi Makwetu found irregular expenditure amounting to R4 billion in the city of Tshwane.

This means a sixth of the city’s operating budget was spent on contracts illegally entered into, the opposition party claimed on Tuesday. The amount included R2.38 billion of irregular expenditure the city failed to disclose that was only discovered during the audit, DA mayoral candidate Solly Msimanga told a media briefing in Pretoria on Tuesday.

The controversial PEU prepaid metering contract was part of this amount. Msimanga said the auditor-general’s (AG) management report relating to Tshwane’s 2014/15 financial statements was mistakenly handed out to the city’s municipal public accounts committee on which the party has representation.

The management report is a more comprehensive report of the AG’s findings and not meant to be made public. Msimanga also claimed the AG was in breach of the Municipal Finance Management Act (MFMA) for failure to provide reasons for a delay in the signing of the City of Tshwane’s audit report for 2014/15. This was the result of political pressure in the form of “negotiations” with the city’s political leadership, who were trying to avert a qualified report, or even a disclaimer, he said.

The AG’s office would not comment before the audit report had been made public, neither would City of Tshwane.

In terms of the MFMA, the municipality’s accounting officer has to submit the consolidated annual financial to the AG by the end of September annually. The AG has to submit the audit report within three months – in this case, end-December.

The DA alleges the AG acted in breach of the MFMA by failing to submit such a report in time. Msimanga said the AG found that the PEU contract was awarded “to a councillor or official of the city, without naming the person or persons involved. The finding means that the AG has found evidence in his audit that PEU is essentially a front for a councillor or an official of the city.”

The management report further found electricity losses increased from 14 to 16%, representing R1 billion in lost revenue and 23% in water losses.

 

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