JOBURG’S R3.4BN SHOCK
Previous ANC administration ‘flouted the law’
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.