BUFFALO City Metro was the worst in the country for irregular expenditure, and in the past financial year had written off a colossal R1.1-billion.
This was revealed in a written parliamentary response submitted this week by Cooperative Governance and Traditional Affairs Minister Pravin Gordhan to the National Assembly.
The troubled metro wrote off irregular expenditure amounting to more than R1.1-billion, which the metro claimed had accumulated from 2011.
It put BCM way above any other metro in the country, including those with budgets many times larger.
Second on the list was the other Eastern Cape metro, Nelson Mandela Bay, which incurred unauthorised expenditure of more than R270-million, a quarter of BCM’s figure.
The eThekwini Metro based in Durban was third with fruitless and wasteful expenditure of R25.2-million.
Both were condoned by these councils.
One of the biggest metros, the city of Johannesburg, condoned fruitless and wasteful expenditure of R260000 and spent R648000 in unauthorised expenditure in the financial year in question.
The metros of Tshwane, Cape Town, Mangaung and Ekurhuleni managed not to incur any irregular expenditures, according to Gordhan’s report.
BCM has a budget of R5.6-billion, and Nelson Mandela Bay has a budget of R9.64-billion.
City of Tshwane has a budget of R27.4-billion, eThekwini R30-billion, while Johannesburg and Cape Town metros have budgets of R47-billion and R34-billion respectively.
BCM’s shocking financial mismanagement has left the opposition DA fuming, demanding that it be investigated by the province’s cooperative governance and traditional affairs MEC Fikile Xasa.
Irregular expenditure is defined in the Municipal Finance Management Act as expenditure incurred by a municipality or municipal entity that is in contravention of, or not in accordance with, the law and which was not condoned.
Gordhan’s written response comes after DA MP Kevin Mileham asked about such expenditure in all the country’s metropolitan municipalities.
Mileham yesterday said the DA would write to Xasa to investigate the circumstances surrounding BCM’s irregular expenditure over the years.
Xasa could not be reached yesterday.
Mileham said they would also ask the MEC to intervene to “ensure that proper controls are put in place in Buffalo City’s supply chain and financial management systems”.
“We cannot allow critical services such as the provision of clean drinking water, sanitation, refuse removal and other basic services, to be compromised due to irregular procurement and financial mismanagement,” said Mileham who is a former BCM councillor.
He said for a number of years the DA had called for strict financial management at BCM, and for supply chain management process to be opened up to public scrutiny.
“This irregular expenditure highlights the need for this,” said Mileham.
He said it was unclear what “this gross amount” had been spent on, “but I will get to the bottom of this malpractice and will ensure that the culprits be held to account”.
Meanwhile, a DA councillor in BCM, Lance Weyer, said the metro’s administration had tabled a report at their council meeting yesterday asking for an additional R109-million to be written off.
Weyer said this was for irregular expenditure incurred during the last quarter of the last financial year.
The auditor-general’s report showed that irregular expenditure incurred by all the country’s municipalities increased from R2-billion in 2010-11 to close to R3-billion in 2011-12.
Both Eastern Cape metros alone accounted for nearly a third of the irregular expenditure in that year at R897-million.
During 2012-13 municipalities incurred a combined irregular expenditure R3.3-billion, almost all of which was due to non-compliance with supply chain management legislation and other applicable regulations.
BCM mayor Zukiswa Ncitha could not be reached for comment yesterday, but BCM spokesman Keith Ngesi said the R1.1-billion written off “was an accumulated figure since we became a metro in 2011”.
Ngesi had not provided any further information at the time of writing. — With additional reporting by Mphumzi Zuzile
BCM's R1bn is worst in SA
This was revealed in a written parliamentary response submitted this week by Cooperative Governance and Traditional Affairs Minister Pravin Gordhan to the National Assembly.
The troubled metro wrote off irregular expenditure amounting to more than R1.1-billion, which the metro claimed had accumulated from 2011.
It put BCM way above any other metro in the country, including those with budgets many times larger.
Second on the list was the other Eastern Cape metro, Nelson Mandela Bay, which incurred unauthorised expenditure of more than R270-million, a quarter of BCM’s figure.
The eThekwini Metro based in Durban was third with fruitless and wasteful expenditure of R25.2-million.
Both were condoned by these councils.
One of the biggest metros, the city of Johannesburg, condoned fruitless and wasteful expenditure of R260000 and spent R648000 in unauthorised expenditure in the financial year in question.
The metros of Tshwane, Cape Town, Mangaung and Ekurhuleni managed not to incur any irregular expenditures, according to Gordhan’s report.
BCM has a budget of R5.6-billion, and Nelson Mandela Bay has a budget of R9.64-billion.
City of Tshwane has a budget of R27.4-billion, eThekwini R30-billion, while Johannesburg and Cape Town metros have budgets of R47-billion and R34-billion respectively.
BCM’s shocking financial mismanagement has left the opposition DA fuming, demanding that it be investigated by the province’s cooperative governance and traditional affairs MEC Fikile Xasa.
Irregular expenditure is defined in the Municipal Finance Management Act as expenditure incurred by a municipality or municipal entity that is in contravention of, or not in accordance with, the law and which was not condoned.
Gordhan’s written response comes after DA MP Kevin Mileham asked about such expenditure in all the country’s metropolitan municipalities.
Mileham yesterday said the DA would write to Xasa to investigate the circumstances surrounding BCM’s irregular expenditure over the years.
Xasa could not be reached yesterday.
Mileham said they would also ask the MEC to intervene to “ensure that proper controls are put in place in Buffalo City’s supply chain and financial management systems”.
“We cannot allow critical services such as the provision of clean drinking water, sanitation, refuse removal and other basic services, to be compromised due to irregular procurement and financial mismanagement,” said Mileham who is a former BCM councillor.
He said for a number of years the DA had called for strict financial management at BCM, and for supply chain management process to be opened up to public scrutiny.
“This irregular expenditure highlights the need for this,” said Mileham.
He said it was unclear what “this gross amount” had been spent on, “but I will get to the bottom of this malpractice and will ensure that the culprits be held to account”.
Meanwhile, a DA councillor in BCM, Lance Weyer, said the metro’s administration had tabled a report at their council meeting yesterday asking for an additional R109-million to be written off.
Weyer said this was for irregular expenditure incurred during the last quarter of the last financial year.
The auditor-general’s report showed that irregular expenditure incurred by all the country’s municipalities increased from R2-billion in 2010-11 to close to R3-billion in 2011-12.
Both Eastern Cape metros alone accounted for nearly a third of the irregular expenditure in that year at R897-million.
During 2012-13 municipalities incurred a combined irregular expenditure R3.3-billion, almost all of which was due to non-compliance with supply chain management legislation and other applicable regulations.
BCM mayor Zukiswa Ncitha could not be reached for comment yesterday, but BCM spokesman Keith Ngesi said the R1.1-billion written off “was an accumulated figure since we became a metro in 2011”.
Ngesi had not provided any further information at the time of writing. — With additional reporting by Mphumzi Zuzile
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