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Durban - Durban was fast becoming known as a corrupt city, a ratepayers’ association has warned after shocking new details were revealed by the auditor-general on Friday.

In reaction to the revelation that R785 million in irregular expenditure had been identified, Durban mayor James Nxumalo, through spokesman Thabo Mofokeng, said last night that the municipality would take action against staff and councillors implicated.

“We are confident that in the next financial year we will have another major reduction due to the steps we have taken to tighten controls,” said Mofokeng. “This trend will continue until it is brought under control.”

Mofokeng said the report would be referred to relevant committees, including the ethics committee.

The first full council meeting of the year yesterday was told that Auditor General Terence Nombembe had found the eThekwini municipality had incurred R785m in irregular expenditure as a result of awards to suppliers that contravened supply chain management regulations.

Tabling the findings for the 2011/12 financial year, Manuja Maharaj, an auditor-general’s office representative, said the city also awarded 74 contracts worth R7.7m to council employees in contravention of the law.

While the city received a financially unqualified report with regard to other matters, the report revealed that 161 contracts worth more than R32m were awarded to people in service of other state institutions.


An angry Lilian Develing, of the Combined Ratepayers’ Association, said municipal employees found to have breached the regulations and councillors doing business with the city should be named and shamed.

“eThekwini is fast becoming known as a corrupt city. There are always incidents and reports of corruption yet nothing ever seems to get done,” she said.

Develing said it was high time ratepayers put an end to graft.

Maharaj said a further 32 internal investigations relating to alleged procurement fraud and non-compliance with the supply chain management regulations by council employees were in progress.

She added that 41 internal investigations were finalised last year. “In 26 cases, the procurement process was in compliance with supply chain regulations and no further action was necessary.

“In 15 cases, council employees were found to have breached supply chain regulations, which resulted in disciplinary action,” she said.

It also emerged yesterday that the city had incurred material losses relating to water and electricity worth R411m and R364m respectively.

Opposition parties expressed shock, saying while the figures had decreased when compared with the previous year, the city should not pat itself on the back.

The city had incurred R1.3 billion in irregular expenditure during the 2010/11 financial year. However, when compared with the R532m incurred the previous year (2009/10), this year’s figure had increased.

DA caucus leader Tex Collins said the findings once again highlighted that all was not rosy in the municipality.

Had the city released the full Manase report, Collins added, the latest transgressions could have been prevented.

“This council has clearly not learnt from the Manase report if the AG’s report uncovers the same transgressions.”

The Manase report exposed maladministration, corruption and fraud in the municipality.

Minority Front councillor and member of the city’s executive committee Patrick Pillay said the implicated councillors should face stern sanction.

“This is just unacceptable,” he said, before being stopped by municipal speaker Logie Naidoo, who asked councillors not to debate the report.

It emerged yesterday that in an effort to encourage and enhance better financial understanding and yield better audit outcomes, Nombembe had engaged in a process of meeting quarterly with both management and political leadership to discuss pertinent issues.

Nombembe will also ask both city management and political leaders to state their commitment to resolving the problems.