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

The City of Tshwane will be laying criminal charges against former CFO Umar Banda after the auditor-general (AG) issued an adverse audit opinion on Wednesday.

The leaked report found scores of irregularities when it came to the city’s finances and a lack of adequate financial statements.

Tshwane Mayor Randall Williams said the city will lay criminal charges against Banda for the poor state of the city’s financial records.

“Criminal charges [will] be laid against the ex-CFO. The poor quality of the financial statements is a flagrant violation of the Municipal Finance Management Act. Further reports on financial misconduct will be brought before council,” said Williams.

The mayor's spokesperson Sipho Stuurman said the exact charges against Banda will be determined once council has resolved the matter at its next meeting on January 26.

The 28-page AG report found a series of overpayments of councillors, officials benefiting from supply chain processes and a string of irregularities. This includes R10.5bn of irregular expenditure which could not be accounted for.

The municipality also failed to put in place an adequate system to identify and disclose all irregular expenditures incurred. Further, R1bn was understated as fruitless and wasteful expenditure, as Tshwane failed to record such expenses.

Banda, who was appointed in 2017 on a five-year contract, had previously submitted the correct documents. Williams said the city had received unqualified audits since he took the top seat two years ago.

“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 acted as CFO in 2016 when the new DA-led municipality came into power. He was offered a permanent position in 2017, which ended in June last year. However, his contract was extended on a month-to-month basis but was terminated earlier than the set expiration date of December 31 2022.

This was after acting municipal manager Johann Mettler terminated it on December 2 2022 for alleged financial misconduct. Mettler accused Banda of misrepresenting Tshwane’s 2021/22 financial statements submitted to the auditor-general.

When asked by TimesLIVE for his side of the story, Banda said: “ I’ve noted the statements made by the City. I’m taking legal advice on the matter on the next steps to follow.”

In his battle with the city to be reinstated, he said: “I will settle the matter out of court.”

In the meantime, Williams said steps have been mapped out to rectify the AG’s identified findings. This includes the appointment of external auditors to support the auditing process and additional support from the National Treasury.

The city will also implement disciplinary processes against any official who contributed to the poor audit outcome.

“Investigations [will] be initiated into councillors and officials who may have benefited from supply chain processes.”

A full-time city manager will be appointed, as well as a new CFO.

“We have already begun the implementation of these steps and will continue to do so in the course of the new year.

“Strong audit outcomes are the basis of good governance. We simply cannot compromise on them and will ensure that we achieve a better outcome in the future.”

TimesLIVE

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