Four Eastern Cape municipalities, including Buffalo City and Nelson Mandela metros, are among the top 10 irregular spenders in the country, auditor-general Kimi Makwetu revealed yesterday.
Scandal-prone OR Tambo district in Mthatha tops the national list after its irregular spend increased from R94-million in the previous financial year to a record R1569-million in 2015-16.
BCM’s irregular transactions relate to R222-million spent on internal roads projects which were not subjected to competitive bidding.
An additional R2.5-million was irregularly spent on the building of a community hall in Nompumelelo, the report stated.
However BCM’s irregular spend total of R370-million was an improvement from the previous financial year’s R479-million.
Irregular expenditure is spending that did not follow the legal processes.
The second-worst offender in the province is Nelson Mandela Bay Metro, whose irregular spend amounted to R1286-million.
The AG said NMB spent R216-million irregularly in two awards for housing developments and various awards for sewerage infrastructure projects and water projects.
These included the Fish Water Flats wastewater contract treatment works project, which is now based at John Tallant Road in Deal Party.
Makwethu said supply chain management failures in Port Elizabeth cases included “awards to suppliers owned or managed by state employees as well as inappropriate deviations from the SCM process”.
The OR Tambo district is the country’s “worst offender”, and its irregular expenditure bill relates mainly to various water and sanitation projects, including the multimillion-rand Flagstaff sewer ratification project and the Tsolo wastewater treatment project.
In the Tsolo project “the R74-million irregular expenditure was due to inappropriate reliance on a contract organised by another organ of state,” the AG’s report stated.
Also in the top 10 is Alfred Nzo district municipality, with irregular expenditure of R405-million.
A R34-million water supply scheme tender in Matatiele was among the contracts the council will have to investigate. The tender was not advertised and the contractor had no tax clearance, the report stated.
Makwetu said the national total of R16.81-billion in irregular spending for the 2015-16 year was “the highest since we started tracking the values”.
“Such expenditure does not necessarily mean that money was wasted or that fraud had been committed.
“It is an indicator of non-compliance in the process that needs to be investigated by the council to determine whether it was an unintended error, negligence or done with the intention to work against the requirements of legislation.”
Makwetu said all cases of irregular spending needed to be confirmed “through investigations done by the council, but losses could already have arisen or may still arise if follow-up investigations are not undertaken.”
The results also reveal that not all is doom and gloom across Eastern Cape municipalities as the province received a special mention for recording the highest number of municipalities which showed marked improvement.
This after a record seven Eastern Cape municipalities and three entities received clean audits.
This improvement is compared with the previous financial year when only five municipalities and two entities received clean audits.
Outstanding results were achieved by Joe Gqabi, Matatiele, Ingquza Hill and Senqu along with Nelson Mandela Bay development agency who all retained the clean bills of health for the 2014-15 financial year.
The new kids on the block of star performers are Engcobo, Nyandeni, Mzimvubu as well as the development agencies of Ntinga OR Tambo in Mthatha, Chris Hani in Komani (formerly Queenstown).
Makwetu said the audit improvement was attributed to improved record keeping, support by departments such as provincial treasury and cooperative governance and traditional affairs.
The AG also credited “the leadership of these individual municipalities who attended to audit recommendations”.
Makwethu said the Eastern Cape, Limpopo and Mpumalanga were all showing “momentum in the right direction, with the Eastern Cape showing the greatest improvement”.
The province ranked amongst the top three provinces with clean audits; 16% of the province’s municipalities received a clean bill of health.
Ranked top was the Western Cape with 80% and second to it was KwaZulu-Natal at 18%.
Makwetu emphasised the importance of monitoring every cent. “Accountability means that those performing actions or making decisions are answerable for them, but also that there should be consequences for transgressions, lack of action and poor performance,” said the AG.
He also called on all municipal councils to hold managers to account.
BCM one of top 10 ’irregular spenders’
Scandal-prone OR Tambo district in Mthatha tops the national list after its irregular spend increased from R94-million in the previous financial year to a record R1569-million in 2015-16.
BCM’s irregular transactions relate to R222-million spent on internal roads projects which were not subjected to competitive bidding.
An additional R2.5-million was irregularly spent on the building of a community hall in Nompumelelo, the report stated.
However BCM’s irregular spend total of R370-million was an improvement from the previous financial year’s R479-million.
Irregular expenditure is spending that did not follow the legal processes.
The second-worst offender in the province is Nelson Mandela Bay Metro, whose irregular spend amounted to R1286-million.
The AG said NMB spent R216-million irregularly in two awards for housing developments and various awards for sewerage infrastructure projects and water projects.
These included the Fish Water Flats wastewater contract treatment works project, which is now based at John Tallant Road in Deal Party.
Makwethu said supply chain management failures in Port Elizabeth cases included “awards to suppliers owned or managed by state employees as well as inappropriate deviations from the SCM process”.
The OR Tambo district is the country’s “worst offender”, and its irregular expenditure bill relates mainly to various water and sanitation projects, including the multimillion-rand Flagstaff sewer ratification project and the Tsolo wastewater treatment project.
In the Tsolo project “the R74-million irregular expenditure was due to inappropriate reliance on a contract organised by another organ of state,” the AG’s report stated.
Also in the top 10 is Alfred Nzo district municipality, with irregular expenditure of R405-million.
A R34-million water supply scheme tender in Matatiele was among the contracts the council will have to investigate. The tender was not advertised and the contractor had no tax clearance, the report stated.
Makwetu said the national total of R16.81-billion in irregular spending for the 2015-16 year was “the highest since we started tracking the values”.
“Such expenditure does not necessarily mean that money was wasted or that fraud had been committed.
“It is an indicator of non-compliance in the process that needs to be investigated by the council to determine whether it was an unintended error, negligence or done with the intention to work against the requirements of legislation.”
Makwetu said all cases of irregular spending needed to be confirmed “through investigations done by the council, but losses could already have arisen or may still arise if follow-up investigations are not undertaken.”
The results also reveal that not all is doom and gloom across Eastern Cape municipalities as the province received a special mention for recording the highest number of municipalities which showed marked improvement.
This after a record seven Eastern Cape municipalities and three entities received clean audits.
This improvement is compared with the previous financial year when only five municipalities and two entities received clean audits.
Outstanding results were achieved by Joe Gqabi, Matatiele, Ingquza Hill and Senqu along with Nelson Mandela Bay development agency who all retained the clean bills of health for the 2014-15 financial year.
The new kids on the block of star performers are Engcobo, Nyandeni, Mzimvubu as well as the development agencies of Ntinga OR Tambo in Mthatha, Chris Hani in Komani (formerly Queenstown).
Makwetu said the audit improvement was attributed to improved record keeping, support by departments such as provincial treasury and cooperative governance and traditional affairs.
The AG also credited “the leadership of these individual municipalities who attended to audit recommendations”.
Makwethu said the Eastern Cape, Limpopo and Mpumalanga were all showing “momentum in the right direction, with the Eastern Cape showing the greatest improvement”.
The province ranked amongst the top three provinces with clean audits; 16% of the province’s municipalities received a clean bill of health.
Ranked top was the Western Cape with 80% and second to it was KwaZulu-Natal at 18%.
Makwetu emphasised the importance of monitoring every cent. “Accountability means that those performing actions or making decisions are answerable for them, but also that there should be consequences for transgressions, lack of action and poor performance,” said the AG.
He also called on all municipal councils to hold managers to account.
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