Tshwane metro investigating source of leaked AG report for 2023/24

The City of Tshwane is probing the leaking of the metro’s audit report for the 2023/24 financial year which shows it received yet another qualified audit opinion from auditor-general (AG) Tsakane Maluleke during the period under review. 

The report was published by Moneyweb on Friday, leading to the municipality issuing a Sens statement on the same day, saying it was not officially issued by the city. 

It showed the city incurred R2.3bn in irregular expenditure in 2023/24, up from R1.9bn in the previous financial year. Fruitless and wasteful expenditure was largely unchanged at R347m, while unauthorised expenditure increased from R423m to R2.1bn. 

In the 2021/22 financial year, the Tshwane metro received an adverse audit opinion. In 2022/23 it registered a qualified audit opinion and racked up irregular expenditure of R10bn, though its audit opinion improved to a qualified one. 

“Though some of the qualification areas have been resolved, the overall stagnation in outcomes is a testament to the audit action plan implemented by management not being effective,” the AG was quoted as saying in the report. 

However, the Tshwane metro said: “The origin and accuracy of the information cited therein remains uncertain. The issuer is now investigating the matter to determine the source and context of the disclosure. 

“The City of Tshwane wishes to advise note holders that the audited annual financial statements (“AFS”) and audit report for the 2023/ 2024 financial period will be tabled by the auditor-general SA at an ordinary sitting of the City of Tshwane Council, on January 30 2025 in accordance with the provisions and regulations of the Municipal Finance Management Act, 2003.”

In the 2021/22 financial year, the Tshwane metro received an adverse audit opinion. In 2022/23 it registered irregular expenditure of R10bn, though its audit opinion improved to a qualified one.    

The DA’s Cilliers Brink, who was removed through an ANC-sponsored motion of no confidence in September 2024, had been credited for his efforts of trying to turn the municipality’s finances around. He was replaced by ActionSA councillor Dr Nasiphi Moya, Brink’s former deputy. 

Brink’s ousting followed Maluleke’s concerns over political instability in local councils, saying it has affected service delivery.

The Tshwane, Ekurhuleni and Johannesburg metros have been rocked by political and administrative challenges due to the instability of coalition governments, which have seen a revolving door of mayors and key administrative staff in SA’s economic and financial hub of Gauteng.

This was due to the outcome of the 2021 local government elections failing to produce a clear winner, resulting in parties forming coalitions to run the councils. 

Brink said on Sunday it was disappointing the city had to clear one hurdle to achieve an unqualified audit report, and this pertained to the evaluation of the metro’s assets such as properties, plants and equipment. 

Indications are the AG was not happy with the city’s valuation of its assets, said Brink, who served as mayor from March 2023 to September 2024. 

Dealing with or evaluating the city’s assets would have been too complicated to clear in one year. Brink lashed out at the city’s tendency to misspend public money and “that culture is maintained by no consequences for bad conduct. Culture change will come by rewarding good conduct and discouraging bad conduct.” 

During his term as mayor, Brink said he had tried to throw the book at those accused of swindling municipal coffers through elaborate schemes, including the questionable awarding of tenders for the refurbishment of the Rooiwaal wastewater treatment plant, among others. 

ANC councillor Eugene Modise, Tshwane’s deputy mayor and finance MMC, said the metro now had a preliminary report from the AG.

“We are going to get the full report this week. We are going to go through it and respond to all the questions. But what we gather is that it’s a qualified opinion, the same as 2022/23, so it’s not looking good,” Modise said.

The sector continues to be dogged by malfeasance and fiscal challenges that have seen billions of rand wasted on fruitless, wasteful, unauthorised expenditure each year, affecting the delivery of basic services such as potable water, electricity, clinics and refuse collection.

mkentanel@businesslive.co.za