By Lindsay Dentlinger

A City of Cape Town probe into a R4,5-million contract it entered into with the City of Johannesburg to restructure its staff in 2004, has in turn led to the City of Cape Town being held liable for an outstanding payment of at least R1-million.

The city's standing committee on public accounts (Scopa) noted on Thursday that the City of Johannesburg had instituted a claim against the city.

Head of the city's forensic investigations department, Vincent Botto, told Scopa the city had no documents that could be used as a basis for an investigation into the contract.

The DA's Debbie Schaefer suggested that the investigation be put on hold until the City of Johannesburg was forced to provide documents to prove the outstanding monies.

Scopa is questioning at least R2-million of the total amount spent on the restructuring process.

Schaefer said since the city had no paper trail for the contract, it was prima facie evidence that proper procedure had not been followed.

Botto said the investigation was complicated by the fact that most of the officials involved as consultants on the project, no longer worked for the City of Johannesburg.

According to the Auditor-General's report for the year ending June 2006, the appointment of the business unit of the City of Johannesburg appeared to have been made without calling for a tender and without council approval.

Scopa on Thursday also agreed that its legal department should pursue the recovery of money spent in a R3,6-million contract awarded to Full Swing Trading in May 2005 for preparations for the local government elections in March 2006.

Again the awarding of the contract is being questioned as well as exactly what the mandate and deliverables were.

Scopa has also agreed to form a multi-party subcommittee to pursue the recovery of R527 368 in duplicate wages paid to contract street cleaners to avoid industrial action during the 2005/06 financial year.

In 2007, Scopa recommended to Mayco that the money be written off as the cost of recovery from individuals who no longer work for the city could prove more than the amount itself. But Mayco refused to condone the unauthorised expenditure.

Under the project, Sicoca Ikapa, a number of unemployed people were paid to clean the streets of the city.

They had to open bank accounts to receive their wages by bank transfer but were unhappy about bank charges. When the workers protested, two former city directors authorised that they be paid again.

Scopa chairman, the ANC's Peter Gabriel, said the committee required that a procedure be drafted for the city to pay out money to people who were temporarily employed and did not have banking facilities.

"We need to avoid a repeat of the dilemma of double payment," he said.

In March Scopa will begin its interrogations of the city's latest annual report which is now open for public comment.