Cape Town - An unnamed Eastern Cape municipality was found to have mismanaged the Covid-19 relief funds earmarked to procure water and sanitation services.
Auditor-General Tsakani Maluleke revealed this on Tuesday when she briefed the portfolio committees on the outcomes of the local government audits into Covid-19 relief expenditure.
“There were instances where Covid-19 relief funding was used for something other than Covid-19. An example is a municipality in the Eastern Cape where the funds were used to buy the mayor a car rather than for the intended purpose,” she said.
A total of 43 municipalities were selected for the local government special audits, which was conducted similarly to the provincial and national departments.
Out of the R500 billion in Covid-19 relief funds, municipalities were allowed to use R11bn towards the health and social relief response.
They were also allowed to use conditional grants towards the Covid response and there was the Municipal Disaster Funds relief fund to the tune of R151bn.
The package municipalities could use was a combination of equitable share, which was transferred between December 2020 and March 2021, as well as conditional grants and other repurposed grants.
Maluleke said her office started the audit by highlighting preventative controls municipal mangers needed to put in place.
These were tested on how the transactions ran and then findings were given.
She said a number of municipal managers responded well to the findings and took steps to prevent further problems.
“Our job is to use the upcoming audit period to follow up how those actions impacted the environment. They have been encouraging across a number of these municipalities. We hope this can inspire accounting officers to do likewise.”
The AG said the audit covered infrastructure projects such as quarantine sites, temporary shelters, water tanks and water infrastructure.
“The discipline of conducting appropriate needs assessment and planning, those were not strong as they should have been.”
Covid-19 relief funds landed in a local government environment that had procurement and contract management problems.
“The existing weaknesses in the system were essentially what let us down because of procurement processes that were problematic.
“There were instances where there were no competitive and fair procurement processes that were undertaken, leading to excessive payments for goods and services.”
There were also payments for goods and services of poor quality.
“Water tanks were installed yet there was poor workmanship that was evident,” she said.
The auditors found delays in completing projects and that payments were made when there was no requisite progress on projects to be confirmed.
“We highlight these things because they are consistent with matters we keep raising in irregularity audits. It is the same controls that needed attention if we were to ensure whether there is emergency or not (and the) funding availed to us to deliver services… reached its intended purpose.”
Maluleke said procurement of PPE did not follow due processes. Awards were made to family members and to officials employed by the state, in contravention of local government prescripts.
“We found red flags for fraud and we compiled information and we shared with the Fusion Centre, as we did for last report,” she said in reference to the audit reports on provincial and national departments prepared last year.
The AG said the found PPE were bought at higher prices than market rates determined by the National Treasury.
The PPE was delivered at the wrong places, late, in wrong quantities and was often the wrong quality.
Maluleke said the auditors found there were no disciplines put in place to ensure integrity of PPE as there were poor storage practices and ineffective storage management processes.
On water tanking and sanitation services, there were instances where procurement was a problem.
She said they found that the water distribution programme was conducted at inflated prices and citizens did not get the benefit of what should have taken place.
“Sometimes the water tank services were such that we pay people to fill tanks and they don’t,” Maluleke said.
She added that they found chemical toilets in unhygienic and unsafe conditions.
“Because we did not put in place discipline of monitoring the service around cleaning these toilets… We did not achieve the intention which was to provide hygiene and safe conditions for citizens.”