AG frowns on Chris Hani mayor’s ‘excessive’ decor

THE Auditor-General has accused Chris Hani district municipality chief financial officer Nomfundo Fetsha of buying a mayoral house without following due process.

In an audit finding released late last year, which was kept under wraps according to a source, the AG found that the municipality had awarded tenders to two different companies – one to buy furniture and decorations and one to buy a mayoral house – without giving other firms a chance to bid.

The source at the municipality said a deviation had been used to buy the property.

“There’s no way this could have been allowed to happen.

“Deviation was unnecessarily done here and the CFO should answer for this.

“This was a fraudulent transaction,” said the source.

The AG, in the report released late last year, says that in terms of sections 62 (1) (a) of the Municipal Finance Management Act 56 of 2003, it is stated that the accounting officer of a municipality is responsible for managing the financial administration of the municipality, and must for this purpose take all reasonable steps to ensure that the resources of the municipality are used effectively, efficiently and economically.

“The following awards to suppliers procured through a deviation process are not deemed to be economical,” says the AG:

● The district buying a house for R3 533 192.60;

● The furniture bought at a cost of

R1 241 596.00; and

● Interior decorating that was done for R238 856.00.

“Based on the professional judgment as well as the fact that no other quotations were obtained, the procurement is not deemed economical. Furthermore, the expenditure on furniture is deemed excessive upon inspection of the service provider’s invoice,” reads the report.

The company sourced to supply furniture and interior decor was listed as Savrands cc trading as Interior Decor – Home Furniture while the mayoral house was bought through De Wet Shaw and Baxter Attorneys.

The AG says the municipality management needed to ensure the resources of the municipality were used in an economical manner and that the motivation for following a deviation process indicates “the benefits and economic impact compared to having followed the required competitive bidding process”.

Fetsha agreed with some of the findings. “The market was indeed not tested due to the security risk that is associated with the mayoral residence or state house.

“However, value for money was attained in the goods procured for the mayor’s house.

“The furniture for the state house, if you look at the market, and the furniture procured for the state house is not excessive,” said Fetsha.

She said the amount charged by the estate agent for the house was equivalent to the market value for properties in that area.

“The municipality followed a proper process for regulation 32 and the supporting documents for processing followed in Witzenberg municipality [in the Western Cape],” she said.

However, former Harcourts estate agent Adre Bartis, who is chairman of Border-Kei Chamber of Business, said the market value of the house at that time was R3 200 000 – about R300 000 less than the price the municipality paid for it.

Chris Hani district municipality spokeswoman Thobeka Mqamelo said all procurements done were reported to council for condoning. —