27 January 2023
City of Tshwane has fallen!
The South African Municipal Workers’ Union has noted with concern and disappointment the City of Tshwane audit comes as presented by the Office of the Auditor General to the City of Tshwane Council seating on 26 January 2023 for the period 2021/22.
Of great concern, this is the first time that the City receives an adverse audit outcome. This however is not surprising as the City’s financial performance has been gradually declining, especially in the last two years. We have always known this City to be exemplary for good governance and delivery of services, unfortunately all this is now in the past.
As the largest Trade Union in Local Government in general and in the City of Tshwane in particular, SAMWU is deeply worried about the adverse outcome and its implications for the residents of the City of Tshwane. In the presentation to Council on 26 January 2023, the Office of the Auditor General attributed the adverse outcome to the following:
* That there is no balance between expenditure and budget, the City spends more money than what is budgeted for.
* No proper record keeping with Leave pay accrued overstated by 800 million.
* No proper asset keeping with properties and equipment being understated by R4.9 billion. Some assets stated as finalized whilst in construction.
* No proper internal control on salaries and wages. The City can’t determine the actual amount of salaries and wages. Some people paid for work not done due to the City having not followed proper recruitment purposes.
* Failure to budget for salaries.
* Irregular expenditure . No proper systems to disclose irregular expenditure of R10.4 billion.
* Non-disclosures and understatements of loans and bonds totaling R2 billion.
* Unauthorized, Irregular, Fruitless and Wasteful (UIFW) expenditure continues to balloon.
As if the City’s problems were not enough, ESKOM indicated that City of Tshwane owes 1.4 billion and that some of the current accounts were not paid. The City of Tshwane is losing a lot of electricity leading to high Eskom bill and revenue collected from electricity is forever declining.
Rand Water has also come to the picture indicating that the City of Tshwane owes more than 400 million. High Water losses were incurred through vandalism of unprotected bulk water infrastructure assets, leaking pipes due to age and illegal connections.
This audit findings are a concern to workers, noting that rating agencies have been downgrading the City of Tshwane. We understand clearly the need for the City of Tshwane to attract investors and to borrow from various financial institutions to finance mainly Capital projects in the City. It is very clear with the current situation that the City will struggle to attract investment or borrow and will be faced with hefty repayment costs of servicing such loans.
These circumstances erase the gains that workers have toiled so diligently to achieve over the years and ultimately the residents suffer the consequences of lack of development.
Workers in the City of Tshwane, regardless of affiliation would like to see this City being run well and its finances managed prudently for the benefit of all stakeholders. We are deeply concerned by the narrative that seeks to deflect issues affecting our City and sow division instead of reflecting on the key root causes of the problems at hand.
The Political leadership cannot only blame the CFO for the current situation. The Executive Mayor, MMC for Finance, members of the Mayoral Committee and applicable Section 79 Committees should take responsibility for their failure to exercise oversight over the City of Tshwane finances.
SAMWU has over a period of time marched to the office of the Executive Mayor highlighting issues now flagged by the Auditor General. As a solution driven organization , SAMWU hereby calls for the following
• That the City develop systems for proper systems for accountability.
• That the Executive Mayor, Mayoral Committee and Council appreciate their role in oversight committees.
• Filling of vacancies both at senior and lower level to give strategic direction to the Departments.
• The CM must urgently constitute an Audit Steering Committee to address the findings of the AGSA as stipulated in Section 131 of the MFMA.
• Security must be deployed immediately to safe guard municipal infrastructure such as water purification plants, waste water treatment works and electrical infrastructure.
• The Accounting Officer must take control of the bank accounts as stipulated in Section 10 of the MFMA and review the user rights to avoid unnecessary financial losses such as the payment of wrong beneficiaries.
• The monthly section 71 report must serve at all council meetings as well as MPAC, Audit Committee and Finance Portfolio so that Council and all stakeholders receive continuous updates on the financial state of the municipality.
• Budget enough money for maintenance
• Implementation of Proper asset management system.
• The Two Power stations should start generating electricity and revenue for the City.
In the midst of the fall of the once mighty City, the administration should, in an attempt to restore the City to its former glory, start appreciating and investing in its employees to provide better services to residents. Solution does not reside with appointment of consultants but capacitation of employees, which are underutilised.
The entire SAMWU membership is therefore solidly ready to work through a sane and sober approach to bring back the glory days to the City of Tshwane. We therefore call upon all the concerned parties to come together with us and do right by our residents.
Issued by SAMWU Gauteng Province
083 941 5888