The Cape Town City Council was red-flagged by Auditor-General Kimi Makwetu for irregular spending of R65m, and or underspending R183.5m on two projects.  File picture: Matthew Jordaan/African News Agency (ANA) Archives
The Cape Town City Council was red-flagged by Auditor-General Kimi Makwetu for irregular spending of R65m, and or underspending R183.5m on two projects. File picture: Matthew Jordaan/African News Agency (ANA) Archives

Cape council red-flagged by auditor-general report for underspending R183.5m

By Marvin Charles Time of article published Jun 28, 2019

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Cape Town - The Cape Town City Council, often touted as the best-run city by the DA, was red-flagged by Auditor-General Kimi Makwetu for irregular spending of R65 million and for underspending on two projects to the tune of R183.5m.

According to the auditor-general’s report, all metros incurred irregular expenditure over the past three years.

“In the City of Cape Town, 51% was as a result of non-compliance with legislation on contracts and the remainder was due to non-compliance with other procurement process requirements,” the report said.

It said the non-compliance of supply chain management was in connection with traffic contravention services. The contracts relating to traffic contravention services were extended three times without following the prescribed process, resulting in irregular expenditure of R65m. The total value of the extensions represented 87% of the original contract value.

The AG also flagged two water projects for underspending of the annual budget by R183.5m.

“The multi-year targets were not achieved at six projects: City of Cape Town (three), City of Tshwane (two) and Nelson Mandela Bay (one).

“We identified non-compliance with supply chain management requirements at two projects: City of Cape Town (one) and Nelson Mandela Bay (one), resulting in irregular expenditure. We identified non-compliance with legislation on implementation of consequences at three projects: City of Cape Town (one).

“The metro did not properly implement consequences where the consulting engineer and the contractor failed to adhere,” the report said.

Stop CoCT activist Sandra Dickson said: “These findings by the AG appear to have now forced the City to radically reduce its reporting of water revenue to the tune of over R1billion for a period of three years. This is something Stop CoCT pointed out to the City month after month as we questioned the vast over-recovery the City was showing for water revenue.

“It is therefore refreshing to see that the AG has rapped them over the knuckles for the very same thing.

“Stop CoCT now seriously fears that it will have a negative impact on the tariff increases for 2019/20 and beyond. We therefore urge the City to be much more transparent in the way it calculates our tariffs.”

ANC leader in the council Xolani Sotashe said they were still studying the report, “but what the auditor-general is raising is nothing new because we have always known that the city’s water projects would catch up with them”. 

“This clearly speaks to the lack of leadership within the City,” he said.

He said that the city council’s tag as the best-run city was collapsing.

* At the time of going to print the City was unable to respond to queries, and the City still did not reply to queries by Friday morning.

@MarvinCharles17

[email protected]

Cape Argus

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