The eThekwini municipality’s executive committee yesterday ordered an unprecedented probe into the city’s financial affairs by an outside auditor.
The independent audit, unanimously endorsed by all parties on exco, comes a week after Auditor-General Terence Nombembe red-carded the city for R532-million in irregular expenditure and a host of supply chain management contraventions for the municipal year ending June 2010.
The city nevertheless received an unqualified audit opinion, raising eyebrows in opposition quarters.
The DA’s spokesman for economic development, Dean Macpherson, told The Mercury last night that the audit was likely to encompass the entire municipality “from the municipal manager to the janitor”.
Nombembe’s audit report noted that 25 cases of alleged procurement fraud and irregularities were under investigation, including the delivery of municipal housing.
The latter is already the subject of a probe by Willie Hofmeyr’s special investigating unit in line with a national proclamation signed by President Jacob Zuma.
The new audit was announced by mayor Obed Mlaba, after exco met in committee yesterday with various parties, including Herman van Zyl from the auditor-general’s KwaZulu-Natal office, the municipal risk committee, and its external and internal audit committee.
City officials, including municipal manager Michael Sutcliffe and financial officer Krish Kumar, were not present.
Exco resolved that an outside independent auditor be appointed to conduct the investigation.
Given that a local government election is scheduled for May, and Sutcliffe’s term of office ends in June, any investigation would have to be completed by then.
Mlaba indicated that he wanted it finalised within two months.
He said that the city had been the subject of various media reports based on the auditor-general’s findings.
While exco appreciated that the municipality was in a “financially stable position”, it was concerned about the findings.
This related particularly to non-compliance with supply chain management regulations in the housing unit and Section 36 awards - which are supposed to be used in exceptional circumstances as they deviate from normal procurement processes. Other concerns include the revenue management system and municipal staff and councillors doing business with the municipality.
Mlaba said he had been mandated by exco to lead the process of appointing a company or persons to head the probe.
He said the city was committed to clean governance and urged those with information to come forward once the audit firm had been appointed.
“We will have zero-tolerance to anything that is untoward in our city. All political parties represented in exco are one when it comes to this investigation.”
DA caucus leader Tex Collins said that such an investigation transcended politics because it affected all Durbanites.
“This affects people living in the most humble dwelling in rural areas, to people in the biggest mansions in Umhlanga, and as councillors we are bound by the council code of conduct to ensure that the city’s books and processes are correct,” he said.
The Mercury has published articles relating to the awarding of Section 36 contracts, and reported that at least 20 councillors were among those believed to have flouted the law by doing business with the municipality.
A fortnight ago, Van Zyl told exco that any company with a budget the size of eThekwini’s - R24,1-billion in the past financial year - would usually have a dedicated person to ensure it followed internal controls and financial regulations.
Sutcliffe declined to comment last night, including whether he believed the knives were out for him. In a Sunday Tribune interview this year, he expressed interest in retaining the job, incurring the wrath of some comrades who believed he was lobbying for the post through the media and that new blood at the helm of the city was necessary. - The Mercury