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eThekwini municipal officials have already racked up R6 million in irregular expenditure, barely three months into the 2013/14 financial year.
Officials from the city’s treasury department told the municipal public accounts committee on Thursday that irregular spending was mainly because proper supply-chain management processes were not followed.
Smilo Mbongwa of the treasury said irregular expenditure did not mean fruitless or wasteful spending. Services were rendered and the council received value for money.
Mbongwa explained that if a contract was less than R200 000 the city should get at least three written quotations. He said sometimes the city received only one quote, and if the award was made just to that one company without reasons being given, it amounted to irregular expenditure.
“If a minimum of three quotes can’t be obtained, the reasons must be recorded and the accounting officer should approve,” he added.
ANC councillor Nompumelelo Chamane said the city was supposed to achieve a clean audit in the 2013/14 financial year, but if the city had already incurred R6m in irregular expenditure in the first quarter, the committee might just as well be “disbanded”.
Chamane said action must be taken against officials responsible for the city’s incurring irregular expenditure.
During former municipal manager Michael Sutcliffe’s tenure, Auditor-General Terence Nombembe red-carded eThekwini for contravening supply chain management regulations, which resulted in irregular expenditure of R1.3 billion.
City manager S’bu Sithole recently told the Institute of Municipal Finance Officers that irregular spending in eThekwini had dropped since the 2010/11 financial year.
In the 2011/12 financial year the city incurred irregular expenditure of R782.5m; in the 2012/13 financial year the figure was R324.9m.
Sithole said systems were in place to further reduce irregular expenditure.
“A comprehensive review of the supply chain management policy and procedures has been undertaken.
“Capacity training workshops are convened for supply chain management practitioners and line departments. Our goal is that we must receive an unqualified audit outcome with no findings in the 2013/14 financial year,” he said.