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PHOTO: Supplied
eThekwini municipality logo. PHOTO: Supplied

Municipality sits on hundreds of financial fraud cases

By CHRIS NDALISO Time of article published Nov 22, 2018

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Durban - The eThekwini Municipality has been sitting with hundreds of cases relating to financial transgressions and suspected transgressions which were dealt with by the City Integrity and Investigations Unit (CIIU).

During the presentation of the consolidated audit committee report to the executive committee at the city hall, it was revealed that only 16 of the 377 cases brought forward from the third quarter were dealt with.

The audit committee report was for the fourth quarter of the financial year ended on June 30.

Some concerns raised in the report include the delay in implementing recommendations of the CIIU, the non-integration of the ICT electricity staff into the ICT Business Unit, and the time taken to resolve audit logs.

The audit committee operates as an independent advisory body to council and the municipal manager on matters relating to internal financial control and internal audit. It also advises them on risk management, accounting policies and the adequacy, reliability and accuracy of financial reporting and records and information matters, among other things.

The committee expressed concerns with the poor attendance of audit meetings by deputy city managers.

The unstable leadership of the city’s legal unit was also flagged by the audit committee. It noted that over the last three years there had been more than three individuals serving as head of the unit; the last, Gideon Phungula, was suspended within three months of his appointment.

Phungula was recently found guilty of referring to some of his colleagues of Indian descent as “corrupt c******”.

He was also found guilty of trying to manipulate the disciplinary hearing of Zandile Sithole, the city’s suspended supply chain management deputy head. Sithole was suspended on allegations of tender irregularities.

The audit committee requested the CIIU to expedite approval of the fraud prevention policy, the fraud and corruption prevention strategy and the fraud risk assessment and whistleblower policy in order for the policies to be implemented.

Audit committee member Neo Shabalala said the delay in the implementation of CIIU recommendations, with only 16 of the 377 matters brought forward from the third quarter being addressed, was a concern.

She said another area of concern was the time taken to resolve an audit log, with a high number of audit matters unresolved for 180 days.

The IFP’s Mdu Nkosi said the issue of unstable leadership at the city’s legal unit was a concern.

The DA’s Nicole Graham said there were a number of issues that were repeated from previous reports. “The fact that investigations are not completed raises concern,” she said.

Chief audit executive Ronald Machumi said that in terms of the resolutions and recommendations of the CIIU, the governance structure was being strengthened. He said the recently established Integrated Risk Management Committee, a sub- committee of the audit committee, would provide oversight to the CIIU.

“The CIIU will present their plan for the year to the committee, which will be underpinned by policy focusing on fraud prevention and whistle- blowing. The new audit committee team is dynamic, robust and full of new ideas I am quite confident that we are on the right path,” he said.

Daily News

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