Cape Town tops irregular spending list at R47m

With Beaufort West and Eden District, amount spent totals R173m – auditor-general

THE DA-run City of Cape Town has incurred R47 million in irregular spending, topping the list of three municipalities in the province that have together spent R173m in 2016/17 without following the legal prescript.

The irregular expenditure in the Western Cape has decreased by R1m from 2015/16 when it was R174m.

However, the auditorgeneral pointed to the city’s weaknesses in consequence management and revenue management and polit- ical instability municipalities.

The AG’s business executive in the Western Cape, Sharonne Adams, this week released the local government audit results indicating a regression in the audit outcomes of municipalities in the province compared with 2015/16.

The main contributors to irregular expenditure were the City of Cape Town (R47m), ANC/Karoo Democratic Forcerun Beaufort West (R36m) and DA-run Eden District (R32m).

Of the total irregular expenditure amount, R163m of related to non-compliance with supply chain management (SCM) regulations.

Adams said 98% of the SCM-related irregular expenditure involved current year transgressions that can be isolated to unjustifiable deviations in terms of SCM regulations, the extension of contracts without the necessary approvals, and non-compliance with local content prescripts.

“The overall regression can be attributed to some municipalities not taking our messages and recommendations seriously as well as not demonstrating the required levels of accountability and governance.

“Three municipalities lost their clean audit status – City of Cape Town, Bitou and Eden District. This was due to material non-compliance with SCM regulations at all three municipalities, irregular expenditure not being prevented at Bitou, and weaknesses in consequence management and revenue management at the City Cape Town,” Adams said.

Adams said her 2015/16 recommendations to improve accountability and audit outcomes, did not receive the necessary attention in all instances.

“This is evidenced by the findings from our audits that included attention not being paid to audit action plans, poor performance planning and budgeting, the lack of improvement in the status of internal control, and inadequate assurance provided by the different role players in local government,” she said.

Adams said non-compliance with the Municipal Finance Management Act, in particular SCM regulations, continued to be one of the main obstacles to increasing the number of clean audit opinions in the province.

“The accountability failures we noted can be attributed to, among others, political instability, instability in the positions of municipal manager, chief financial officer and others, and a failure to sufficiently monitor and implement action plans to address prior year findings,” she said.

Outgoing mayor Patricia de Lille admitted there were several issues in the city administration.

“Once there is a report of this nature, the Municipal Accounts Committee has to investigate this. Once their investigation is completed, we will get a set of recommendations and from there rectify what is wrong and take further steps,” she said.

Beaufort West mayor Noel Constable said the irregular expenditure stems from among others the illegal appointments of staff.

“There was a forensic investigation into several issues in the municipality about two years ago. That investigation is currently with the Hawks. Most of the irregular expenditure stemmed from the illegal appointments of staff.

“We are very much weary of all the problems we have and we are fixing them and preventing this from occurring again,” Constable said.