ANC’s gross unauthorised spending in Tshwane

THE FORMER ANC administration in Tshwane incurred a staggering R1.914 billion in unauthorised expenditure in its final year in office, the 2015/16 municipal audit report has revealed.

At least 43% of the unauthorised expenditure in the final financial year the ANC ran the city – before it was toppled by the DA-led coalition – related to non-cash items.

“The expenditure can mainly be attributed to employee-related costs, debt impairment, depreciation, finance charges, bulk purchases, contracted services, transfers and grants, and losses on the disposal of property, plant and equipment,” the report stated.

The metro was placed at the top of the municipalities that had incurred unauthorised expenditure.

The amount was an increase from R786m the ANC-led city incurred in 2014/15 financial year.

Unauthorised expenditure refers to the expenditure that was incurred by municipalities outside the budget approved by the council or not in accordance with the conditions of its grant.

The metro has once again clinched an unqualified audit report – but it was also caught on the wrong side of the law regarding its handling of the public purse.

The 2015/16 municipal audit report released yesterday by Auditor-General Kimi Makwetu showed some improvements.

In the same breath, the report didn’t spare harsh criticism of the city for topping the list of 10 municipalities that incurred the highest unauthorised expenditure in the country.

But the presentation about the poor performance of the city’s spending didn’t end there.

The city was placed fifth among municipalities considered to be the highest contributors to irregular expenditure.

Makwetu noted that irregular expenditure was costs not incurred in the manner that was prescribed by legislation.

“Such expenditure did not necessarily mean that money had been wasted or that fraud had been committed,” Makwetu said.

According to the report, the city was found to have irregularly spent an amount of R653m.

Of the money irregularly spent, a total of R517m was funded by grant money.

At least R293m was irregularly spent on the controversial Wi-Fi contract awarded to Project Isizwe. Makwetu also found that the appointment of the contractor didn’t follow competitive bidding processes.

The metro also transgressed tender award processes when it came to the A Re Yeng contract.

According to the report, the contract was awarded to a contractor who didn’t qualify to deliver the service – and at least R189m had been irregularly spent on it.

In addition, a number of accidents occurred at the integrated rapid public transport network locations, some of which related to construction, pointing to safety risks. Makwetu strongly recommended that irregular expenditure incurred be dealt with by the council.

The report said investigations should also be launched into all instances of irregular expenditure. This was to determine if any official was liable for the expenditure. Where the expenditure constituted a criminal offence it should be reported to the SAPS, it pointed out.

More damning findings showed that the metro didn’t achieve targets on the project funded by the urban settlement development grant to upgrade from gravel to tar in Ekangala.

The city improved on performance reporting, Makwetu said, but “there were repeat findings on material misstatements in the financial statements and non-compliance with legislation”.

The repeat findings were attributed to “inadequate review processes by finance officials”.