Tshwane Metro unable to provide documents for major tenders – AG report reveals

According to the AG report, the Tshwane metro has once again received a critical assessment from the Auditor General (AG) following its failure to provide supporting documents for awarding four tenders totalling nearly a billion rand.

This assessment places Tshwane among the three municipalities in South Africa that received an adverse audit opinion for the latest financial year, highlighting significant shortcomings in the metro’s financial practices and governance.

The AG’s findings revealed that the metro’s asset management unit lacks sufficient staff with the necessary skills to conduct valuations on infrastructure assets and cannot verify the entire asset base. These deficiencies came to light during AG Tsakani Maluleke’s recent briefing to the standing committee on the local government audit outcomes in Cape Town.

Despite having a substantial budget, Tshwane’s financial position has been a cause for concern for two consecutive years. In addition, the AG’s report identified Tshwane as the municipality with the most missing information related to tender procurements, further tarnishing its financial reputation.

The consequences of these audit findings have already started to impact the metro’s financial standing. For example, Tshwane was downgraded by Moody’s, which has affected its ability to secure funding for capital expenditure.

Also read: Mayor Cilliers Brink’s Efforts to Revive Tshwane Metro’s Finances Face Union Opposition

The AG’s report comprehensively assessed 257 municipalities and 30 public entities operating within the municipal space. However, according to Maluleke, an adverse audit opinion indicates that a municipality has submitted unreliable financial statements that no one can use for effective oversight and decision-making.

In the case of Tshwane, significant expenses were incurred, amounting to R114.19 million, on consultants tasked with compiling the metro’s fixed asset register and identifying previously unrecorded assets, as well as conducting valuations. However, the work performed by the consultants revealed material misstatements, leading to project delays and contract extensions.

Maluleke highlighted that despite Tshwane’s investments in various projects, their execution faced challenges due to ineffective management. Poor planning, unfunded budgets, and a lack of contract management disciplines significantly contributed to project delays. For instance, the delivery of housing projects in Fort West experienced delays, resulting in the illegal occupation of completed units.

Furthermore, the AG report exposed the metro’s expenditure on software licenses that remained unused, further illustrating instances of inefficient resource allocation and financial mismanagement within Tshwane.

These findings underscore the urgent need for Tshwane Metro to address the deficiencies identified in the AG report, implement robust financial controls, and improve governance practices to restore financial stability and regain the trust of its residents and investors.

Source: AG report: Tshwane metro can’t provide documents for major tenders

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Picture: Twitter / LoratoTshenkeng

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