JOBURG’S R3.4BN SHOCK

Pre­vi­ous ANC ad­min­is­tra­tion ‘flouted the law’

The Star Early Edition - - FRONT PAGE - SIHLE MANDA

THE CITY of Joburg un­der the ANC ad­min­is­tra­tion in­curred a stag­ger­ing R3.4 bil­lion of pre­vi­ously un­re­ported ir­reg­u­lar ex­pen­di­ture, with R700 mil­lion in the last fi­nan­cial year alone.

These shock­ing claims were made yes­ter­day by the DA – which took over the mu­nic­i­pal­ity from the ANC in Au­gust last year – af­ter tabling the au­di­tor-gen­eral’s 2015/16 an­nual fi­nan­cial state­ments.

The now DA-run coun­cil has blamed the bleak fi­nan­cial sta­tus on the pre­vi­ous ANC ad­min­is­tra­tion, which it ac­cused of “a shock­ing lack of at­ten­tion to fi­nan­cial man­age­ment prac­tices”.

This, the city said, re­sulted in a fail­ure to ad­e­quately in­ves­ti­gate cases of unau­tho­rised, ir­reg­u­lar, fruit­less and waste­ful ex­pen­di­ture.

Speak­ing to The Star about these find­ings, mayor Her­man Mashaba said the rev­e­la­tions had left him “very dis­ap­pointed” and “very an­gry”.

He said his great­est con­cern was that most of the con­cerns raised by Au­di­tor-Gen­eral Kimi Mak­wetu had not been in­ves­ti­gated in­ter­nally by the city. That, he said, was “a ma­jor in­fringe­ment of the law”.

Only four of the city’s 15 en­ti­ties are said to have re­ceived clean au­dits from the au­di­tor-gen­eral in the past fi­nan­cial year.

This was in stark con­trast to the to­tal of 12 in the cor­re­spond­ing pe­riod a year ear­lier.

About 80% of the fruit­less and waste­ful ex­pen­di­ture dis­closed in the an­nual fi­nan­cial state­ments was yet to be in­ves­ti­gated, but it was re­vealed that the to­tal bal­ance of unau­tho­rised ex­pen­di­ture reached R3.4bn, with R692m be­ing in­curred in the 2015/16 fi­nan­cial year.

The city also said that al­most 70% of the ir­reg­u­lar ex­pen­di­ture was iden­ti­fied dur­ing the au­dit, af­ter not be­ing de­tected by the city’s mon­i­tor­ing pro­cesses.

“This points to flaws in the city’s mon­i­tor­ing pro­cesses that per­pet­u­ated a cul­ture of cor­rup­tion and se­crecy,” ac­cord­ing to Mashaba.

The grim pic­ture was ex­ac­er­bated by rev­e­la­tions of sup­ply-chain pro­cesses be­ing dis­re­garded, with con­tracts be­ing awarded to city and other gov­ern­ment em­ploy­ees. About R18.4m worth of con­tracts went to three gov­ern­ment of­fi­cials and two Joburg staffers.

“The close fam­i­lies of seven of­fi­cials were also said to have un­duly ben­e­fited from con­tracts worth R4m. Just more than 50% of these awarded con­tracts were not de­clared.”

The city’s re­cently ap­pointed anti-cor­rup­tion unit head, Gen­eral Shadrack Sibiya, has been tasked with in­ves­ti­gat­ing the cases.

The au­di­tor-gen­eral had crit­i­cised the city for lax con­tract man­age­ment.

His re­port al­legedly found that the con­tract per­for­mance and mon­i­tor­ing of six con­tracts, amount­ing to R51.4m, were “in­suf­fi­cient”.

Ac­cord­ing to the city, Mak­wetu found that five con­tracts, val­ued at R398.6m, were pro­cured with­out go­ing to ten­der.

Ten con­tracts and quo­ta­tions, amount­ing to R51.7m, were pro­cured from sup­pli­ers with­out valid tax clear­ances.

A se­ries of other trans­gres­sions, amount­ing R100m, have also been flagged by Mak­wetu in the re­port.

Ap­proached for com­ment yes­ter­day, for­mer mayor Parks Tau said it would be “pre­ma­ture” to com­ment on the au­di­tor-gen­eral’s re­port be­fore it had been tabled in the coun­cil.

“The re­port has pos­si­bly been en­gaged with the ex­ec­u­tive and they are com­ment­ing on mat­ters that haven’t been pub­lished in the coun­cil. “What’s im­por­tant with the re­ports of the au­di­tor-gen­eral is that they are pre­sented to the coun­cil, and that the coun­cil is able to re­ceive and process the is­sues,” he pointed out.

“It be­comes pre­ma­ture – and un­der­mines the of­fice of the au­di­tor-gen­eral – for com­ments to be made on mat­ters that haven’t been pre­sented to the coun­cil to be able to iden­tify what the re­port says and what the re­sponse could be,” added Tau.

EX­POSED IT: Au­di­torGen­eral Kimi Mak­wetu

FU­RI­OUS: Mayor Her­man Mashaba

HASN’T SEEN RE­PORT: For­mer mayor Parks Tau

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