Tshwane tops AG list for financial delinquents
● Tshwane is in the worst financial state of all SA’s metros, according to auditor-general Kimi Makwetu’s report for 2017/2018.
He stopped short of calling for the DA-led city to be placed under administration.
Makwetu said the seat of national government would be unable “to continue operations for the next 12 months without financial assistance”.
The report, released this week, said that an “intervention” was required to save Tshwane from going bust.
The report said Tshwane faced ruin because liabilities exceeded assets by more than R2.1bn. The city was also unable to recover about R8bn owed to it by customers.
“The metro deemed that R8.1bn of the amounts owed by their customers would not be recovered — a significant increase from the previous year.
“Although the metro was already in a poor financial position, it still wanted to acquire bonds from the market.”
Tshwane denied its dire financial situation and instead insinuated that the AG report was exaggerated.
According to the City spokesman Lindela Mashigo, Tshwane was far from being unable to continue with its operations within the next year as stated by Makwetu.
“Tshwane is by no means in the position stated (by the AG). Its financial ratios are stabilised and match, whilst in some cases exceed the National Treasury norms,” said Mashigo, adding that the liabilities exceeding assets by R2.1bn “does not necessarily imply the City can’t honour its obligations”.
Another negative finding against Tshwane was its rising levels of unauthorised expenditure, which stood at R1.1bn in the financial year under review.
This was a R500m increase from the previous year and the highest compared with other metros.
Makwetu also raised a red flag on the finances of Johannesburg and Nelson Mandela Bay metro.
He said Nelson Mandela Bay led the metros when it came to racking up irregular expenditure (R2.7bn), followed by Tshwane with R1.6bn and Johannesburg with R700m.
The city of Johannesburg also failed to collect money owed to it from 88% of its ratepayers, which Makwetu said posed a cash-flow risk for the city.
Happy Zondi, spokesperson for the mayoral committee member for finance in Johannesburg, admitted that the outstanding amount had reached a crisis level.
“City Power and Johannesburg Water have intensified disconnection of services on nonpaying customers,” said Zondi.
“Operation Buya Mthetho is targeting topowing customers in all customer categories for collection. We do site visits for high-value debt and we have stand-by-stand audits city-wide aiming to validate the property category, value, usage/occupation, metered service.”
Tshwane and Nelson Mandela Bay metros did not respond to questions sent to them on Thursday. Among the metros, Cape Town was still the best-performing while Ekurhuleni “reflects a good financial health status”, according to Makwetu.