Tshwane's R2 billion deficit

The Auditor General's report for the financial year that ended 30 June 2016, revealed the ANC-led administration incurred a deficit of more than R2 billion.

According to MMC for Finance Mare-Lise Fourie, the deficit is largely due to unauthorized expenditure.

"The municipality compiled a budget, they approved the budget and they overspent that budget by R2 billion," says Fourie, adding one of two things could have led to this, "it either means the budget was completed unfunded and it didn't make sense, or they simply didn't care."

The Auditor General also expressed concern over a number of matters, including ongoing legal matters in which the city is involved. According to the report the potential liability is estimated to be more than R226 million.

The city is also owed R8.6 billion by debtors and the Auditor General estimates 68.5% of this to be irrecoverable. Also of concern were the financial losses in electricity distribution. Fourie says apart from technical losses, further losses were incurred include illegal connections, tampered meters and illegal electricity consumption.

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While the Auditor General gave the city an unqualified audit, Fourie says the current administration wants to get a clean audit. Msimanga supported this statement saying the city wants to work with its citizens to improve efficiency.

The city has meanwhile introduced a turn-around strategy. Fourie says this includes limited funds availed to departments to ensure they stay within the budget.

Other measures include improving efficiencies in the metro police departments. Msimanga says an area as big as Bronkhorstspruit only has two TMPD vehicles, while Hammanskraal is limited to three.

Renegotiating various contracts, including waste management, the pre-paid meter project and other services also form part of the city's measures to balance the books.

Fourie says the primary cause for irregular expenditure was noted in the supply-chain management process. She says processes were often bypassed or proper bidding processes were not followed. "As far the contravention of laws governing supply chain, we are tightening up on those to ensure that we get value for money," said Fourie.

Fourie adds they aim to collect all debt owed to the city. She says government owes Tshwane R582 million; businesses owe R1.6 billion and households R4 billion.

Msimanga says the city is in the process of completing a report to have a clear understanding of what the city can do to service its debts and deliver more efficient services to citizens.