Late re-allocation of metro funds frustrates councillors

Millions of rands meant for service delivery projects in Buffalo City Metro (BCM) have been re-allocated to other projects due to “slow moving” and late commencement of the projects.

The funds were meant to be spent during the 2016-17 financial year. However, two days before the financial year ended on June 30, executive mayor Xola Pakati asked council to approve the re-allocations to “address operational efficiencies in the 2016-17 financial year”.

The re-allocation of the funds is set to affect some major projects Pakati announced as being underway during his state of the metro address in June.

According to the mayor, a total of R27.5-million from the National Treasury’s Urban Settlement Development Grant (USDG) has been re-allocated to “fast moving projects”.

It includes:

• R20-million for the construction of the Needs Camp and Potsdam bridge, valued at R70-million and due to start in July, has been moved;
• R2.5-million moved from the metro’s integrated transport plan implementation programme;
• R2-million from traffic engineering safety measures; and
• R3-million from the construction of the new King William’s Town traffic centre.

The funds have been redirected to the East London Fleet Street project, which received an additional R21.5-million, and the Mdantsane Zone 18 human settlements project, which received a R6-million boost.

In terms of the metro’s own funded projects, a total of R68-million has been moved. Some of the affected projects include:

• R30.5-million which relates to municipal services;
• R23-million from spatial planning and development projects, which includes the King William’s Town public transport facilities upgrade;
• R8-million from the financial services for asset management system;
• R1.4-million from economic development and agencies; and
• R1.2-million from the budget for the replacement of vehicles.

The virement (transfer of funds) made councillors unhappy, with the DA calling for an investigation into why BCM failed to spend allocated funds.

ANC councillor Sindiswa Gomba said: “Not spending in its nature is an indication of under-performance and we cannot sit in this council and just agree and not say that we are not happy.”

DA councillor Geoff Walton questioned when Pakati signed the virement, which was only tabled before council near the end of the financial year.

“I want to suggest that we should have an investigation into what is going wrong. Why we are not spending money? We should refer this matter to the municipal public accounts committee so they can attend to this,” Walton added.

Pakati said: “It was the report that was submitted in the April council when we realised that we’re at 57% in terms of spending and we need to look into the virement option instead of returning the grants to the National Treasury.

“We have systems here that are supposed to help us to monitor spending, and that includes the heads of departments and their political heads meeting to look into our expenditure in their directorates as part of their administrative and political oversight.

“But also the chief financial officer as well as city manager and myself have the obligation as well. The committees of council as they meet and deal with pertinent matters of committees have the same obligation as well.”

Pakati urged BCM officials and politicians to work together to save the institution from embarrassment.

“We have service delivery backlogs in our communities, and when communities realise that we are not able to spend money that is allocated by National Treasury for their services then we must understand that we are in trouble.

“So it is the responsibility of all of us in council, starting from management and the political leadership, to act,” Pakati said. — mamelag@dispatch.co.za