Tshwane to lay charges against ex-CFO Umar Banda for dismal AG report

The City of Tshwane will lay criminal charges against the former chief financial officer, Umar Banda, whom it blames for the accounting mess flagged in the Auditor-General’s damning report.

The report found that the metro had misrepresented its financial statements with financial misconduct, poor internal controls, lack of proper management of its assets and lack of systems to detect irregular expenditures. 

The city’s mayor, Randal Williams, who admitted that the metro’s audit performance had been declining over the years, said the poor quality of the financial statements was a contravention by Banda of the Municipal Finance Management Act (MFMA).

“Criminal charges are to be laid against the ex-chief financial officer. The poor quality of the financial statements is in flagrant abuse of the MFMA. Further reports on financial misconduct will be brought to council.”

In the report the AG struggled to make determinations on the financial state of affairs in the city as a result of statements that were, in some instances, underestimated with incorrect accounting for unauthorised expenditure.

“In my last two years as executive mayor the city has continuously received unqualified audits. The decline in the city’s audit performance is unacceptable and as the political leadership it is critical that we step up, take responsibility and ensure that we immediately plot a path towards achieving better audit outcomes,” he said.

Banda’s contract was terminated last month and Williams said a report looking into the compilation of the financial statements and the auditing process, would be brought to council by the end of January.

The report also flagged the lack of appropriate action taken against municipal officials where investigations proved financial misconduct. Allegations of financial misconduct were not investigated.

“Allegations of fraud and extortion which exceeded R100,000 were not reported to the South African Police Service, as required by section 34(1) of the PRECCA,” it read.

Mapping out the actions to be taken, Williams said the city would implement disciplinary processes against any officials whose performance had led to the poor audit outcome. It would also investigate councillors and officials who may have benefited from supply chain processes.

The report flagged the appointment of a full-time city manager, and appointment processes for filling top management positions were in progress and would be concluded in the first half of the year, the mayor said.

“We have already begun the implementation of these steps and will continue to do so over the course of the coming year. Strong audit outcomes are the basis of good governance. We simply cannot compromise on them, and we will ensure that we achieve a better outcome in the future.”

The Gauteng department of cooperative governance and traditional affairs said it was in the process of studying the report in order to determine the most appropriate course of action to assist the city to deal with the findings accordingly, said spokesperson Lupi Ngcayisa.