ADM officials must cough up R9m – AG
AUDITOR-General Kimi Makwetu has instructed the Amathole district municipality to investigate and recover R9.1million that the council lost in irregular, wasteful, fruitless and unauthorised expenditure from responsible officials.
Makwetu also recommended that the district authority must not only recover the money, but also discipline officials responsible for losses incurred in the 2015-16 financial year that ended in June.
The AG flagged ineffective detection and prevention methods, poor planning, and abuse of supply chain management (SCM) provisions for most deviations.
Unauthorised expenditure amounted to R7-million, irregular expenditure R1.9-million and the municipality was guilty of R253 000 in wasteful and fruitless expenditure.
Makwetu noted that the entire amount of R1.9-million incurred in irregular expenditure “was as a result of the contravention of SCM legislation”.
Of this, 46%, of the expenditure had not been identified during the audit process or detected by the municipality's monitoring systems.
Deviations from tender processes have for years been identified as a big contributor to wasteful, fruitless and irregular expenditure as councils sometimes abuse it to benefit politically connected companies.
“Unauthorised, irregular and fruitless and wasteful expenditure disclosed … to the financial statements must be investigated to determine whether any official is liable for losses incurred as a result of the unauthorised, irregular and fruitless and wasteful expenditure.
“Disciplinary steps must be taken against officials who caused or permitted the unauthorised, irregular and fruitless and wasteful expenditure and losses incurred as a result must be recovered from the person liable,” the audit report said.
Yesterday, Amathole municipal spokesman Siyabulela Makunga said if officials were found responsible for the losses, they would be held to account as the audit had recommended.
The AG also noted that the municipality had inadequate measures to manage consequences.
A disciplinary board had not been established to investigate allegations of financial misconduct and monitor the institution of disciplinary proceedings against an alleged transgressor, the report said.
The report also found that 32 suppliers had submitted false declarations of interest which amounted to R23.8-million.
Despite this, the municipality was given a clean bill of health with a fifth consecutive unqualified audit.
Mayor Nomfusi Nxawe told journalists last Friday that the municipality was targeting a clean audit.
Makunga said an investigation would be conducted and appropriate action be taken regarding the expenditure.
“The municipality has performed exceptionally well as opposed to other government institutions in order to keep irregular, unauthorised, fruitless and wasteful expenditure as low as possible,” he said. —