The Msunduzi Municipality has insisted that its awarding of a lucrative contract for electronic billing was above board and would improve collections.
It was revealed this week that the contract for SMS/MMS billing was not put out to tender, prompting DA MPP and co-operative governance spokesman George Mari to criticise “the lack of transparency”.
Mari warned that the move flew in the face of the municipality’s commitment to “improve financial administration through proper supply chain management”.
However, Msunduzi municipal manager Mxolisi Nkosi said the contract did not go out to tender because the municipality opted to piggyback on the tender process used by other municipalities.
This was allowed under section 36 of the supply chain management regulations and done to save time and money because of the urgent need to sort out the city’s massive debt crisis.
Msunduzi has secured the services of Munsoft, a supplier of financial and billing systems.
Nkosi said five other KZN municipalities were using Munsoft.
He said that before he came into office this year, the municipality’s debtors book was increasing at R100 million a month, with thousands of statements coming back with addressees not found.
The Munsoft system had reduced the number of untraceable account holders from 20 000 to 7 000 this month. A further reduction to 5 000 was expected by the end of next month, he said.
Nkosi said he understood that residents were wary, given the municipality’s past financial woes, but the electronic bills were aimed at improving revenue collection and reducing debt.
“There is nothing unlawful about the process,” Nkosi said. Msunduzi had bypassed the tender process before when it purchased 70 vehicles from a service provider secured by the National Treasury, that had followed the tender process required by law.
“The municipality is allowed by law to do this,” he said.
Mari said the DA welcomed electronic billing to increase debt collection and revenue, but remained concerned that the contract had not gone out to tender. Deviation from this process and the use of section 36 have been cited as one of the main reasons for the rampant fraud and corruption which led to the municipality’s being placed under administration in 2010. Msunduzi’s debt now stands at R899 million.