CITY OF TSHWANE METROPOLITAN MUNICIPALITY - The City of Tshwane Metropolitan Municipality - Media Statement

The City of Tshwane Metropolitan Municipality - Media Statement

THE CITY OF TSHWANE METROPOLITAN MUNICIPALITY

(A municipality as described in section 2 of the Local Government Municipal Systems Act, 2000, duly
established in terms of Notice No. 6770, promulgated in the Provincial Gazette Extraordinary of 1
October 2000 in terms of section 12(1) read with section 14(2) of the Local Government: Municipal
Structures Act, 1998, as amended)
(Issuer code: CTMM)
(“City of Tshwane” or “the City” or the “Issuer”)

CITY OF TSHWANE – MEDIA STATEMENT

The Issuer wishes to notify all holders of its debt securities (the Noteholders) of the media publication
statement relating to the City’s leaked financial statements for the year ended June 30, 2022, and the
corresponding findings of the Auditor-General. The media statement provides a clear action list being
implemented and tracked to address the audit findings.

Noteholders are also advised that Umar Banda is no longer the appointed Chief Financial Officer of the
City of Tshwane with effect from 31 December 2022.

The published media statement reads as follows:

CLEAR ACTION LIST BEING IMPLEMENTED AND TRACKED TO ADDRESS AUDIT FINDINGS

“With the City’s annual audit report having been reported on, I want to assure the residents of Tshwane
that we take the findings of the Auditor-General very seriously. 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.

I want to succinctly map out the actions that our administration has embarked on and that we will
implement to ensure that we rectify the failings that have been identified by the Auditor-General.

1. Criminal charges to be laid against the terminated Chief Financial Officer. The poor quality of the
   financial statements is in flagrant abuse of the Local Government: Municipal Finance Management
   Act, 2003 (Act 56 of 2003). Further reports on financial misconduct will be brought to Council.

2. Termination of the Chief Financial Officer’s contract as of 31 December 2022.

3. Appointment of professional external auditors to support the auditing process.

4. Secondment of additional support from the National Treasury (two former Chief Financial Officers)
   to support the City.

5. Initiate an audit on the City’s performance in the first half of this financial year and every quarter
   thereafter.

6. Continued engagements with the Auditor-General to systematically address audit findings to
   prepare for the next audit.

7. Implementation of disciplinary processes against any official whose performance led to the poor
   audit outcome.

8. Investigations to be initiated into councilors and officials who may have benefited from supply chain
   processes.

9. Appointment of a full time City Manager. The administrative leadership vacancy was flagged by the
   Auditor-General, which we ensured we addressed last year.

10. Appointment process for filling Section 56 top management positions (including the Chief Financial
    Officer). This recruitment process has been initiated and will be concluded in the first half of this
    year.

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 these and we will ensure that we achieve a better outcome in future.”

Media enquiries: Sipho Stuurman (siphost@tshwane.gov.za)

The published statement can be read on the City of Tshwane’s website at:
https://www.tshwane.gov.za/?p=38903


Tshwane
06 March 2023

Debt Sponsor
Absa Bank Limited (acting through its Corporate and Investment Bank division)

Date: 06-01-2023 05:35:00
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