Cogta in spotlight for underspending

Report: only 86% spent in 2016-17 financial year

THERE is a growing culture of underspending in the province’s cooperative governance and traditional affairs department.

Cogta spent only 86% of its budget allocation in the last financial year compared to 97.4% the year before.

This was revealed in the department’s annual report for the 2016-17 financial year, which shows the it underspent on its municipal infrastructure grants (MIG) and disaster management, while also recording R6.7-million in irregular expenditure and R5.5-million in fruitless and wasteful expenditure.

The auditor-general of the province said Cogta had also incurred R71.78-million in irregular expenditure accumulated over a number of years, which accounted for.

Cogta spokesman Mamnkeli Ngam said R5.96-million of the irregular expenditure “is due to Cogta not being represented in the bid committee for the construction of the disaster management centre by the department of roads and public works [DRPW].

“The main contractor subcontracted to a company whose broadbased black economic empowerment [BBBEE] level status was more than 25% as prescribed in the Preferential Procurement Regulation of 2011. The contract was awarded during 2013-14 financial year and as a remedial action, Cogta participates in bid committees for all contracts that are arranged by the DRPW on its behalf.”

He said the department does not receive MIG funds as Treasury pays the money directly to municipalities. Cogta monitors its use.

Ngam said the fruitless and wasteful expenditure cited in the annual report was subjected to a forensic investigation undertaken by national Treasury, which had made recommendations that were being implemented. had yet to be

He could not state what the recommendations were.

Cogta was allocated R53.703-million for MIG and only R51.274-million of this was spent.

The amount set aside in the 201617 financial year for disaster management was R20.1-million but only 68% of this amount – R13.673-million – was spent, causing under-expenditure of R6.4-million.

The annual report further reveals that there was R21-million not spent by municipalities. This is 20.8% of the R80-million that Cogta transferred to municipalities.

“With regard to the municipal transfers, the financial year-end reporting for the department ended in March 2017 and for municipalities on June 30 2017,” said Ngam.

“For this reason, there is a difference of three months between the two financial years [Cogta and municipalities] hence the expenditure as at the department’s year-end is reporting what the municipality has spent in their third quarter of the financial year.

“As at the end of June 2017 the municipalities had spent all of their grant allocations,” he said. —