The national structures of the governing City of Tshwane coalition engaged the city’s mayoral committee in a hybrid meeting on Monday regarding the Auditor-General’s (AG) leaked adverse report on the city’s financial fiasco.

The multiparty coalition in Gauteng — comprising the DA, ActionSA, FF+, IFP, ACDP and Cope — said it was “unequivocal in expressing its disappointment with the audit findings and expects urgent remedial action, deep reform and real accountability”.

Auditor-General Tsakani Maluleke’s report, which was submitted to the Gauteng legislature late in 2022, made the following findings about the city’s financials from July 2020 to June 2021:

• Irregular expenditure of R10-billion;
• Unauthorised expenditure of more than R600-million;
• Fruitless and wasteful expenditure understated by more than R1-billion;
• Unjustified supply chain management deviations of more than R480-million without reason;
• Material misstatement of assets under construction and disclosed as completed, which means they were overstated by R2-billion;
• Assets worth more than R52-billion were not properly accounted for and not valued properly, and the impairment of those assets was not properly assessed;
• Leave pay amounting to more than R800-million not properly accounted for; and
• Loans and bonds amounting to more than R800-million were not correctly accounted for.

The AG said there was “material uncertainty” over the city’s viability as an ongoing concern.

The Gauteng coalition and Tshwane’s DA mayor Randall Williams have largely blamed the adverse findings on the period in the year under audit when the city was run by administrators appointed by the ANC-led provincial government.

The coalition said: “While it can be noted that the current multiparty government took over the reins at the metro five months after the 2021/22 financial year commenced and there are deep historical problems underpinning the report predating even that financial year, the multiparty government is nonetheless committed to address the historical root causes of adverse findings and hold those responsible accountable.”

Read more in Daily Maverick: “Government lost R12bn to non-compliance and fraud, latest Auditor-General report reveals”

Williams told Daily Maverick: “The ANC provincial administrators inherited a R296-million surplus when they came into the city and left the city with a R4.3-billion deficit. The effect of their mismanagement has had a lasting impact on the city and many of the challenges we face today in the city can be directly traced back to their time in office.”

In a statement, ANC Greater Tshwane regional secretary George Matjila accused the DA-led coalition of diverting blame for its service delivery and financial failures towards previous ANC administrations and the more recent city administrators.

Read more in Daily Maverick: “Auditor-General — taking action where it counts on the trail of wasted taxpayer funds”

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Spokesperson for the Greater Tshwane ANC caucus, councillor Joel Masilela, said: “It has always been a matter we have raised that the city would be in a bad state under the leadership of the DA and its coalition partners. As the Greater Tshwane ANC caucus, we have been at the forefront in condemning how the municipality has been run dry by the current political leadership and each time we were pinpointing the levels of wrongdoing and inefficiencies in the administration, many South Africans as well as political parties co-governing the municipality have labelled our efforts as sour grapes.”

Reacting to the AG’s report, Cope spokesperson Dennis Bloem, whose party is part of the city’s governing coalition, heaped blame on the ANC. “The whole thing stems from years of the ANC’s council mismanagement,” he said, without elaborating.

Reacting last week to the leaked AG’s report, mayor Williams said his office had already implemented measures to rectify the failings identified in the report. Former chief financial officer Umar Banda is lumped with much of the blame. The measures are:

• Criminal charges to be laid against Banda, as the poor quality of the financial statements is a flagrant abuse of the Municipal Finance Management Act;
• Termination of Banda’s contract as of 31 December 2022;
• Appointment of professional external auditors to support the auditing process;
• Secondment of additional support from National Treasury to support the city;
• Initiate an audit of the city’s performance in the first half of this financial year and thereafter every quarter;
• Continued engagements with the AG to systematically address audit findings to prepare for the next audit;
• Disciplinary processes against any official whose performance led to the poor audit outcome;
• Investigations into councillors and officials who may have benefited from supply chain processes;
• Appointment of a full-time city manager — this administrative leadership vacancy was flagged by the AG; and
• Appointment process for filling Section 56 top management positions (including the chief financial officer). This process has been initiated and will be concluded in the first half of 2023.

In the turmoil of coalition politics that has rocked many metros, Tshwane has been relatively stable. While Johannesburg, Ekurhuleni and Nelson Mandela Bay all experienced abrupt changes in mayors and speakers in 2022, Tshwane’s leadership remained, largely due to the coalition’s outright majority in the council, which does not depend on the EFF.

In 2020 the City of Tshwane was placed under provincial administration by then MEC for cooperative governance and traditional affairs Lebogang Maile, after he contended that Tshwane could no longer carry out its mandate of delivering services to residents. The city didn’t have a mayor or speaker at the time. This came after the ANC and EFF led no-confidence motions against the mayor and speaker and obstructed moves to replace them.

Read more in Daily Maverick: “Tshwane mayor confident that coalition will hold firm, despite rifts in other metros”

Another factor leading to the province’s decision to place the city under administration was that its council could not reach a quorum in meetings. The city had failed to pass its budget, thanks to marathon-like wrangling among the then coalition government partners, which, before the recent municipal elections, included the EFF.

Maile’s decision to put the city under administration was reversed by the Constitutional Court in 2021, which ruled his move unconstitutional.

Mayor Williams has dismissed calls for his resignation over the AG report and maintains that his coalition will remain united and stick with the DA leader, unlike in 2020 when opposition parties successfully collapsed the municipality.

“The city of Tshwane has strong coalition structures. These structures work to ensure stability and manage any challenges that may arise,” he said.

He noted that the AG’s report had been leaked and that the official document will be discussed at a council meeting scheduled for 26 January 2023. DM