Pretoria - A leaked audit report of the City of Tshwane for the past financial year is at the centre of yet another public spat between the DA and ANC.
The official annual report from the office of the auditor-general is expected to be submitted to the council at its first sitting of the year on Thursday. It will become a public document at the end of the month.
But the DA released what it said was a copy, and held a media briefing about it on Tuesday.
The alleged report showed irregular spending of R4 billion in the Tshwane municipality.
DA mayoral candidate Solly Msimanga said only slightly more than a quarter of the expenditure - R1.2bn - was disclosed in the city’s own annual financial statements.
Msimanga told journalists at the party’s regional offices in Arcadia the finding was in a management letter to the city, under the stewardship of mayor Kgosientso Ramokgopa, as well as audited financial statements for 2014/15.
Both the City of Tshwane and the office of the auditor-general spoke out strongly against the leaked report, saying it had no status and standing, nor was it credible.
City spokesman Selby Bokaba said: “We don’t know where this purported audit report comes from; the auditor-general is yet to release the audit report.
“The audit process is under way. We appeal to the media to await its release so that we can meaningfully debate its contents.
“As far as we are concerned, whatever report was released to the public by the DA has no status, standing and is not credible.”
Mandla Radebe, spokesman for the auditor-general, told the Pretoria News that as part of a general rule, management reports were not a public document.
It was communication between the auditor-general and its auditees during the audit process. For that reason, the office could not comment on its contents.
Radebe said audit reports for the 2014/15 financial year would become public by January 31.
Msimanga alleged that ANC political office bearers in the city had been negotiating with the auditor-general regarding the political implications of the anticipated qualified audit for the city.
He said the signing-off of the audit report should have been done at the end of December, but had been delayed pending the outcome of the discussions.
“The release of the report was thus delayed, meaning the auditor-general flouted the Municipal Finance Management Act,” he said.
“We believe that a dangerous precedent is being created.
“In this regard, we call on the auditor-general not to allow the independence and integrity of the office to become impaired by any action committed as a consequence of these discussions.”
Msimanga said the report suggested pervasive corruption and lack of control in the supply chain management, as well as ineffective leadership.
A large chunk of the irregular spending was injected into the cancelled prepaid electricity smart meters contract with Peu Capital Partners, he said.
The irregular expenditure was the highest sum ever incurred by a metro anywhere in the country, Msimanga said.
“This means that one-sixth of the city’s operating budget is spent on contracts illegally entered into.
“This indicates the pervasiveness of corruption, lack of internal controls and ineffective leadership throughout the city’s administration,” Msimanga said.
The contract, which came into effect in October 2013, was terminated in May last year after the city had concluded it was not financially viable to continue with it.
Public Protector Thuli Madonsela has since lodged an investigation into the contract, with her report expected in March.
The Peu contract became a political hot potato since it surfaced that the awarding of the contract was questioned by Finance Minister Pravin Gordhan. He advised the city not to pursue it, saying it was not financially viable. This was in correspondence circulated by the DA soon after the termination of the deal, sparking a war of words with Ramokgopa.
The mayor previously locked horns with the opposition after it distributed what it described as termination terms, which included R1.2bn in penalties. The city denied this.
The DA’s Lex Middelberg said: “On May 31, 2013, the mayor presented a case for Peu while he knew that the minister had warned him not to proceed with the contract.”
He accused Ramokgopa of having misled the council with the awarding of the Peu contract.
Msimanga said: “The auditor-general review of the Peu contract has found this R27bn contract to have been illegally entered into. The expenditure is therefore irregular.”
Based on information gathered by the auditor-general, he said the DA believed the city should receive a qualified report - thus it does not comply with generally accepted accounting principles, despite the rest of the financial statements being fairly presented.
Pretoria News