The City of Cape Town was red-flagged by Auditor-General Kimi Makwetu for irregular spending to the tune of R65 million. Picture: David Ritchie/African News Agency
The City of Cape Town was red-flagged by Auditor-General Kimi Makwetu for irregular spending to the tune of R65 million. Picture: David Ritchie/African News Agency

Auditor-General red flags City of Cape Town for R65m irregular expenditure in recent financial year

By Mwangi Githathu Time of article published Sep 14, 2020

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Cape Town - Failure to comply with the auditor-general’s (AG) strict requirements on municipal supply chain management (SCM) was the reason why the City recorded unusually high irregular expenditure in the most recent financial year, according to Local Government MEC Anton Bredell.

The City of Cape Town was red-flagged by Auditor-General Kimi Makwetu for irregular spending to the tune of R65 million.

Bredell said the City recorded a higher amount in irregular expenditure for the most recent financial year because for five years it had failed to properly comply with the requirements on SCM regulations from the auditor-general.

Replying to a question in the legislature from MPL Derrick America about the City’s unusual spend, Bredell said the City procured legal services for several years through a process which had now been found not to be compliant with all the SCM Regulations.

“The City was therefore requested to disclose such legal services procured as irregular expenditure retrospectively for five financial years,” said Bredell.

“In addition, due to the City’s interpretation of the legislation with regards to the disclosure of irregular expenditure relating to amounts paid versus payable, the practice in the City was to disclose amounts paid as irregular expenditure and the amount payable as a deviation,” said Bredell.

“It was found that both amounts should have been disclosed as irregular expenditure and the City had to re-classify the amounts payable from deviations to irregular expenditure. This resulted in a decrease in the deviation and an increase in the irregular expenditure amounts being disclosed.”

In answer to a question about what measures were in place to prevent such an occurrence in future, Bredell said: “The corrective steps which the City had put in place have revealed additional non-compliance matters which the City had to disclose, and these matters are currently being dealt with by the municipal public accounts committee consequence management has been recommended and taken the City continues to find proactive mechanisms to detect and self-report irregular expenditure the City did not record any material irregular expenditure that must be recovered from politicians and staff when it is found that they deliberately caused the irregular expenditure.”

Cape Argus

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