LISTEN: Msimanga improves city finances
The City of Tshwane gets a clean audit for 2016/17 financial year.
Mayor Solly Msimanga’s administration got a clean audit for its first year in office.
“The auditor general was satisfied with the metro’s accounting transactions and all transactions were accounted for,” said finance MMC Mare-Lise Fourie.
The city said it passed the audit by strengthening controls over supply chain processes, slashing unauthorised and unnecessary expenditure and removing the city from unlawful and expensive contracts.
“We are currently disentangling ourselves from wholly unaffordable broadband and fleet management contracts,” said Msimanga.
“We are optimistic we will be free from these contracts by the close of the next financial year.”
He said unauthorised expenditure had been reduced from R1,6 billion to R620 million.
“This over-expenditure can be attributed to employee-related costs, bulk purchases, depreciation, finance charges and contracted services,” he said.
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Irregular expenditure dropped from R950 million to R838 million, R699 million of which related to the PEU smart prepaid meter contract, a carryover from the previous administration.
Msimanga said the city closed its financial year with an operating surplus of R704 million from a budgeted surplus of R1,1 billion.
He said the budgeted surplus had included a R750 million projected proceeds from the sale of smart meters to a new contractor.
Fourie said the auditor general wanted the city to focus on bringing down consumer debt and the more than R1,6 billion electricity loss.
She said consumer debt had increased by R1,6 billion to R10,2 billion.
“The difficult economic climate and rise in unemployment had a negative impact on payment levels,” she said.
“The average collection rate on current billing dropped to 90,4 percent compared to 93,1 percent in 2015/16 ,” Msimanga said.
Msimanga blamed the electricity loss to illegal connections and said steps were being taken to curb the problem.
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