R2.6 billion blow for South Africa’s capital city

 ·24 Jan 2025

The City of Tshwane has received another qualified audit opinion, with over R2.6 billion in irregular and wasteful expenditure.

The Auditor General of South Africa released its audit findings for the City, which showed a stagnation in audit outcomes, with several massive challenges that require urgent attention.

The city recorded R2.3 billion in irregular expenditure and wasteful expenditure of R347 million.

Moreover, audit findings highlighted issues related to plant and equipment (PPE) management, payables and receivables, and compliance with the Supply Chain Management Regulations.

The city said that the findings underscore the need for stronger financial controls, better interdepartmental coordination and adherence to governance principles.

“The Executive Mayor Nasiphi Moya wishes to assure the residents of Tshwane that the City takes these findings seriously and is fully committed to implementing a comprehensive remedial action plan to address them.”

“Since taking office in October 2024, the City’s administration has been steadfast in its determination to
restore financial accountability and governance excellence in the City of Tshwane.”

The city is introducing a range of new interventions as part of its consolidated Audit Outcome Remedial Action Plan, which is designed to tackle the challenges highlighted by the Auditor-General.

It is also working with the Auditor-General and has requested it perform an official audit procedure on the work done by the city to address the qualification areas.

“This aims to ensure that the matters raised by the Auditor-General. have been adequately addressed.”

“And that it has comfort over the city’s opening balances before the commencement of the audit of the 2024/25 annual financial statements.”

As per this process, the city has also proposed to make supporting information available to the Auditor-General on a staggered basis.

The first batch will be submitted by 31 March and the second batch by 30 April.

The city said that these measures aim to address the root causes of the audit findings and set a clear path towards sustainable improvement.

It will also appropriate additional funds during the adjustment budget process towards the execution of this activity.

The city said that other key actions in the Audit Outcome Remedial Action Plan include:

  • Property, plant and equipment management: Conducting a full review and physical verification of the City’s assets to ensure the accuracy of our asset register and compliance with standards.
  • Improved payables and receivables processes: Streamline invoice tracking, reconciling outstanding payables and strengthen collection strategies to reduce impairments.
  • Compliance with the Supply Chain Management Regulations: Enhanced training and quarterly compliance audits to ensure that supply chain management processes adhere to regulations
  • Development of standard operating procedures (SOPs): SOPs will standardise key financial and operational processes to reduce inconsistencies and improve efficiency.
  • Enhanced oversight and accountability: Strengthen the oversight mechanisms through regular Audit Steering Committee meetings and Executive Audit Tracking Committee meetings.

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