ANC chief whip Xolani Sotashe. Photo: Henk Kruger

The ANC says the City of Cape Town’s R45 million “irregular expenditure” in one financial year reeks of corruption, despite the city’s having said that an investigation could not find any evidence of corruption or fraud.

“We don’t buy this cheap argument that there is no corruption,” said Xolani Sotashe, ANC chief whip.

Sotashe’s comments came after the municipal public accounts committee finalised its investigation into R45m in contracts awarded to bidders who failed to disclose links with city employees.

The city has said the investigation found no evidence of corruption or fraud. It said problems with its supply chain management process had allowed bidders who had relatives in the city’s employ to receive contracts.

The report says more attention is to be given to reviewing questionnaires completed by bidders. Staff “must take care... when reviewing tender and quotation documents”.

William Mxolose, chairman of the committee, said in some cases bidders failed to disclose their links with city employees.

In other cases, bidders had declared their connections, but officials had failed to capture this information.

The city has had correspondence with the auditor-general and the committee is to submit its recommendation to the council about what may be done to prevent a recurrence of the problem. It says in its recommendation that “the irregular expenditure is... irrecoverable in that the city did receive value for money” and “legal proceedings would be without foundation”.

Sotashe said the city should “play by the law”.

“If you have relatives working in the city you have an indirect influence,” he said.

“The city is boasting it’s about clean governance. And then there is this ‘little’ error of R45 million in irregular expenditure. What does that say about clean governance?”

Action should be taken against the officials and bidders involved.

Ian Neilson, deputy mayor and the mayoral committee member for finance, said the amounts related to the “breach of not having called for declarations of interest” for goods under R200 000. Some of the contracts were for stationery and “stores materials”.

“The city unknowingly procured goods from employees in the service of the state. Note that these vendors did not include any city employees… These were only procedural defaults which were investigated and found to have been made in good faith with no malicious or dishonest intent and with no financial loss to the city.”

The matter had been referred to the municipal public accounts committee for it to review the expenditure and recommend to the council how the expenditures could be “regularised”. The city took full responsibility for the administrative errors of officials.

“The measure ought to be, when an operating weakness is identified, how does the city respond? The city immediately changed the standard operating procedures and revised checklists.”

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Cape Argus