A forensic auditing firm has been appointed to probe fraud, corruption and maladministration allegations in the eThekwini municipality, KwaZulu-Natal's co-operative governance MEC said on Thursday.
“There is something wrong in the municipality and we believe there is a need to investigate,” Nomusa Dube told reporters in Durban.
The allegations relate to the awarding of tenders.
Auditor General Terrence Nombembe's 2009/10 report indicated R532-million had been spent irregularly in the municipality, which runs the city of Durban.
The Mercury newspaper recently reported that mayor Obed Mlaba was part of a company that nearly landed a R3-billion deal with the city to convert waste to energy.
Dube said she had received representation and reports on claims of corruption, fraud and maladministration. Documents she received included a report following a probe by accountants Ngubane & Co, an eThekwini municipality internal report and the AG's report.
“It would appear from the findings of these reports that there is prima facie evidence of maladministration and failure to comply with procedures and legislative provisions.
“In view of the seriousness of the allegations, we have deemed it appropriate to institute a forensic investigation.”
Dube however said the municipality would not be put under administration because it was not falling apart. “The municipality is not collapsing. It's finances are okay.”
She invited whistle blowers to help the department get to the bottom of the problems. Dube said auditing firm Manase and Associates had been appointed to conduct the investigation, which would cover:
- Irregular expenditure resulting from inadequate budgetary controls, controls over payment processes and weak checks and balances.
- Non compliance with supply chain management policies for infrastructure and housing projects.
- Non disclosure of interests by councillors and officials.
- Irregularities in the awarding of contracts, payments and performance management of telecommunications.
- The illegal rental and sale of RDP houses.
- Abuse of overtime and travel allowances.
- Alleged fraudulent practices at the Durban metro police.- Sapa