Pretoria - Tshwane Mayor Randall Williams yesterday said criminal charges would be laid against former chief financial officer Umar Banda for alleged financial misconduct.
This came in the wake of a leaked City of Tshwane’s adverse audit report for 2021/22, issued by the auditor-general (AG), which painted a disastrous picture of the financial management in the municipality.
Banda was fired by city manager Johann Mettler on December 2, 2022, before the expiry of his contract on December 31, for misrepresenting the financial statement of the municipality to the AG.
Banda’s legal challenge to overturn Mettler’s decision was dismissed by the high court in Pretoria.
In explaining the decision to press charges against Banda, Williams said: “The poor quality of the financial statements is in flagrant abuse of the Municipal Finance Management Act. Further reports on financial misconduct will be brought to council.”
Municipal officials and councillors implicated in the adverse audit report for illegally benefiting from the supply chain management (SCM) processes are also likely to face action.
Williams said a probe would be undertaken into the officials identified by the AG, and appropriate action would be taken with a view to recovering the money and bringing the culprits to justice.
The AG took issue with the City submitting incorrect and incomplete financial statements, resulting in the issuing of adverse audit findings.
The report stated that some of the goods and services of a transaction over R200 000 were procured without inviting competitive bids, as required by SCM Regulation 19(a).
“Allegations of fraud and extortion which exceeded R100 000 were not reported to the SAPS as required by section 34(1) of the Prevention and Combating of Corrupt Activities Act (Precca), according to the report.”
Williams said: “Alarmingly, the AG has also identified officials and councillors who benefited from supply chain processes.
“The law makes it very clear that no official from local, provincial and national government departments or municipal councillors may benefit through supply chain processes. A proper investigation will be conducted into the list of names compiled by the auditor-general, and appropriate action will be taken to recover the monies and bring the culprits to justice.”
He said that the AG issued the City with an adverse audit opinion after identifying reporting issues in the financial statements and the quality of financial reporting in the City.
“There are also findings indicating financial misconduct and misrepresentation of the City of Tshwane’s financial statements and financial position in terms of revenue, assets, payments and presentation in general. These findings are being treated with the seriousness they deserve.”
Williams expressed disappointment, saying that an adverse opinion was not an outcome remotely acceptable within the context of good governance.
“We have already begun the work to set the City right. We are working closely with the National Treasury and the AG to address the findings. The National Treasury is further providing us with additional professional staff (two former chief financial officers) to assist the City,” he said.
He said Tshwane was committed to improving its future audit outcomes and would be bringing in an external auditing firm to begin provisionally auditing the first half of the financial year ending December 31 2022.
In the damning report, the AG put into question the City’s internal control system for being inadequate after the municipality was unable to provide information and supporting documentation to support the amount recorded for salaries and wages.
The AG was, as a result, “unable to determine by alternative means whether any further adjustments were necessary to salaries and wages stated at R7 426 322 798 as disclosed in note 36 to the financial statements”.
Pretoria News