Positive audit outcome ‘not possible yet’

The City of Tshwane is anticipating the audit outcome for the 2023-24 financial year following an adverse finding last year by the auditor-general (AG).

Tshwane mayor Cilliers Brink said he made it clear that a positive audit outcome following the adverse finding was not possible, adding that the audit ended on 30 June 2023, three months after his appointment.

Last year, the city was slammed for failing to meet the AG’s deadline for submitting financials and irregular expenditure.

“The city received an adverse audit outcome for the previous year ending June 2022. The finding sent shock waves through the city and our politics, but it was not produced in one single year.

“It reflected the breakdown of systems and controls over many years, including information that was deliberately withheld from the municipal council by city officials,” Brink said.

“When I was elected as executive mayor in March 2023, I made it clear that a positive audit outcome following the adverse finding was not possible. The extent of the AG’s findings were too many and complex to fix in the three months that were left of the financial year.

“The best we could hope for was an improvement in the adverse audit and positive feedback from the AG in that the city is actively addressing its issues.”

Brink said the real test would be for this financial year ending June 2024, when an unqualified audit outcome would be essential.

“In the meantime, a lot of work has been done, especially to fix two of the three major AG findings: cash flow and trade payables [the money paid to creditors]. We have a new chief financial officer and new systems and controls to manage money going out and money coming in.

“Our goal is not compliance, but to ensure maximum accountability and procure maximum value for the money spent on residents’ behalf,” he said.

Brink said a lot of work still needed to be done to respond to the AG’s findings.

But councillor of the Republican Conference of Tshwane Lex Middelberg said the city was making excuses for the bad audit to come. “Brink is messaging after the blow of financial results that are even worse than last year’s audit report in a practice commonly called in politics, inoculation against bad news.

“The idea is to acknowledge the expected adverse outcomes of the upcoming audit report and to focus on – or to claim – one or two aspects that may be better than last year [even if the whole is worse] and on the back thereof to assert that the overall results are positive.”