Durban - The eThekwini Municipality racked up irregular expenditure of more than R580 million relating to non-compliance with supply chain management principles in the 2018/19 financial year, the executive committee (Exco) heard on Tuesday.
This is R151m less than the R744m irregular expenditure incurred in 2017/18, and is subject to a final audit.
A report tabled at Exco revealed that irregular expenditure at the city’s electricity unit stood at R150.6m, and water and sanitation followed with R146.1m. Human Settlements accounted for more than R41m and the eThekwini Transport Authority amassed just over R60m in irregular expenditure.
According to the report, the city has initiated a process to analyse all unauthorised, irregular, fruitless and wasteful expenditure, including amounts brought forward from the previous year.
“Based on the outcome of the analysis and the respective status of each item, appropriate processes will be followed to address expenditure in line with the requirements of Section 32 of the Municipal Finance Management Act,” read the report.
The opposition DA and IFP would have none of the “condonation” of the report. DA caucus leader Nicole Graham said bad planning and complete failure to manage consequences were the cause of irregular expenditure.
“Officials who are responsible for wrongdoing are getting away with it, and the amounts keep rising as a result,” she said.
Graham said council departments had failed to spend their budgets, with only 72% of the capital budget spent at the end of the current financial year.
“The main reason for this is stated as interference from business forums and poor performance of contractors. The city has done nothing in either regard, as business forums continue to cause havoc across the city. Contractors who cannot do the work required are still awarded contracts, and money is seldom recovered when they make mistakes,” she said.
The IFP’s Mdu Nkosi questioned the omission of figures for the last month (July) of the financial year in the report.
“July is the last month of the financial year and this is where fiscal dumping occurs. There is a likelihood that the irregular expenditure amount would increase had this last month been included,” he said.
City manager Sipho Nzuza appealed to the councillors to provide guidance and not allow political grandstanding in the matter.
Acting mayor Fawzia Peer said there was political will to ensure irregular expenditure did not increase in the city.
“The city manager is currently tightening up the review and due diligence processes on all matters that affect supply chain management processes within the city,” she said.
The next step was for the Municipal Public Accounts Committee to consider the report and ask the city’s Integrity and Investigations Unit to investigate each case. Any consequence management recommended by these bodies would be implemented, the city said.