Durban - Officials in the eThekwini Municipality failing to adhere to stringent supply chain management (SCM) controls have incurred R212 million in irregular expenditure since last year – much to the anger of city councillors.
On Thursday, officials went cap in hand to the city’s finance and procurement committee to have R113.2m of the expenditure regularised, arguing that while SCM protocols were not followed, the goods and services were provided and the city received “value for money”.
It comes after the committee in June last year regularised – or “condoned” – R107m in irregular expenditure.
A report presented to the committee on Thursday noted that R105.2m irregularly spent last year, plus an additional R8m from this year, needed to be regularised.
Of these amounts, R35.2m was processed by the bid adjudication committee using Section 36 regulations – which bypasses normaltender processes – while R69.9m had been flagged by the auditor-general (A-G).
According to the report, the R69.9m included:
Conflict of interest matters.
Extensions of a contract after expiry date.
Invalid use of Section 36.
Instances where three quotations were not obtained.
Splitting of an order.
No declarations obtained.
No valid tax certificate.
Bad planning
The A-G found that the city awarded contracts to 13 companies whose directors or members were close family members of employees of the municipality; 31 companies where directors were in the service of the state; and two contracts which were awarded to companies owned by employees of the city.
DA councillor, Sharon Hoosen, said the city was in “chaos” because of bad planning from officials.
“We need to start taking corrective actions that were raised in the A-G’s report. We hear all the time (that despite irregular expenditure) that the city got the services and value for money.
“But that is not the point, the main issue here is the improper use of Section 36 and it comes down to bad planning.
“The city is in chaos because of bad planning. We need to take this matter seriously and do something about it,” she said.
Hoosen said the city needed to send officials on SCM courses because many of them had “no clue on SCM regulations”.
Fawzia Peer, chairwoman of the committee, said officials needed to reduce irregular expenditure and called for a report on what action was being taken against those who signed off on the irregular expenditure.
While ANC councillors voted to regularise the irregular expenditure, members of the DA and the IFP voted against the condonement.
Sibonelo Mnguni, municipality head of expenditure, said the city had launched an investigation into the irregular expenditure, and further action such as disciplinary hearings, recovery of monies and criminal charges may be brought against officials.
He promised to compile a report to the committee, detailing all the departments that had irregular expenditure and what action had been taken.
Daily News