Several senior eThekwini officials, at least three municipal managers, the former city mayor and metro police officers have been marked as playing a hand in the eThekwini municipality’s R1.3 billion overspend due to financial mismanagement, tender fraud and corruption.
The officials formed the basis of the Manase Report, which sought to investigate why irregular expenditure and general financial mismanagement had spiked 158 percent, or three times as much, in the past financial year.
The report was commissioned following public and former employee tip offs. It was also implemented after previous forensic audits on the municipality.
Speaking at a press briefing on the report, MEC for Co-operative Governance and Traditional Affairs Nomusa Dube, said the investigation was intended to “confront head-on some of the ills bedevilling this municipality” and “arrest the rot” before it collapsed the institution.
While specifics of the report, such as the names of the officials fingered in the findings and the exact amounts they had defrauded the municipality by were not released, Dube did discuss the areas in which the municipality had suffered.
The Manase Report found that:
1. 161 councillors were found to have had private business interests that benefited from dealings with the eThekwini Metro Municipality (EMM).
2. The municipality's former mayor “irregularly and unlawfully influenced” a waste volume reduction tender intended for Bisasar Road Landfil Site.
3. Over R536 million was spent on contractors who did not meet the criteria of supply chain management regulations. Of that amount, R428 million was spent on the EMM's housing unit.
4. A former municipal manager did not report “fraudulent and corrupt activities” amounting to R1.1 million to police, even after a similar investigation (the Ngubane report of 2010) has presented him with the findings.
5. Duplicate payments had been made to IT company Dimenshion Data of over R2.6 million, days after the first payment was made. The second payment was subsequently reversed.
6. Software programmers had been called to develop a “Revenue Management System” for the municipality, as opposed to buying a generic programme to accomplish the same task. The programme was expected to cost a maximum of R150 million and be completed in four years. However eight years later, at the completion of the project, the municipality incurred a total cost of R474.7 million.
7. Exaggerated claims for overtime had been incurred from some departments, notably the electricity department.
8. Several instances of nepotism and promotions across large pay grades were also found. For example, trainees on a T10 level had incurred upgrades to T14 level employment after serving the allotted time.
9. Numerous metro police officers were found to have had interests in the taxi industry, as well as being involved in corrupt activity that included maladministration and sexual harassment. The report also found that about 30 trainee constables bought their driver's license in order to work with the department.
10. A housing project estimated to cost R18 million over 550 low cost homes, eventually cost the municipality R57 million and the project was not open to public tenders.
In some of the worse cases of negligence, the Manase Report found that pertaining to irregularities in the housing unit, tender documents were not even completed in full, even though the tender had been awarded. It also found that documents needed to process awarded tenders were not signed and in some cases, addressed to a sub contractor and not the municipality's appointed contractor.
“It would appear that the Bid Adjudication Committee failed to apply their minds and did not exercise due care and diligence in recommending condonation of the housing unit's irregular spending,” Dube said.
The report also accused the managers in the Treasury, Infrastructure and Housing sectors of not taking all steps to ensure that irregular expenditure was prevented and for “failure to exercise due care and diligence”.
The Manase Report suggested that:
1. The tender process for waste volume reduction be started afresh.
2. Disciplinary action be taken against municipality's head and deputy head of housing and the deputy head of supply chain management for irregular expenditure to the tune of R6.3 million for a housing project in Chatsworth.
3. The municipality must make urgent arrangements to recover the amount of R1.1 million highlighted in the Ngubane report of 2010.
4. Disciplinary action must be taken against 161 officials with private businesses that have benefited from the municipality.
Dube said those marked in the report as having to account for their actions would have three weeks in which to respond to the allegations, after which, “appropriate methods” would be undertaken to hold accused, accountable. - IOL