Tshwane is tops in overspending

AUDITOR-GENERAL: R16.8BN IRREGULAR EXPENDITURE Western Cape holds its lead, increasing municipal clean audits to 80%.

The City of Tshwane is the biggest contributor to unauthorised expenditure, having overspent by close to R786 million in the last financial year, auditor-general Kimi Makwetu revealed in Pretoria yesterday.

He made this disclosure when he tabled the 2015-16 general report on municipal finances.

For Tshwane, unauthorised expenditure was at almost the same level as the previous year.

Irregular expenditure at municipalities also increased by just over 50% to R16.81 billion, with Tshwane ranked number five of the top 10 contributors at R653 million.

The irregular expenditure included the free Wi-Fi contract of R293 million, for which the supplier was appointed without following a competitive bidding processes.

The bus rapid transport service tender of R189 million was awarded to a contractor not qualified to deliver the service.

But this did not mean wastage or fraud were committed, Makwetu said. “This needs to be confirmed through investigations to be done by the council, but losses could already have arisen, or may still arise, if follow-up investigations are not undertaken.”

Makwetu said 43% of the irregular expenditure related to noncash items such as employee-related costs, debt impairment and finance charges not budgeted for.

This also included bulk purchases, contracted services, transfers and grants and losses on the disposal of property and assets.

“It is important for municipalities to correctly budget for these non-cash items and to show the true financial state of the municipality,” Makwetu said.

He highlighted the poor track record in ensuring municipal leaders were accountable, which hindered service delivery. “If these basic principles of accountability, built around a central theme of strong internal control and good governance, are in place, municipalities should be well geared to live up to the expectations of the communities they serve.”

The provinces with the highest proportion of municipalities with clean audits were the Western Cape, KwaZulu-Natal and Eastern Cape. The Western Cape held its lead, increasing its clean audit from 73% to 80% of municipalities. –