An audit committee report presented at eThekwini Municipality’s executive committee meeting on Tuesday highlighted R50.2-million in irregular expenditure at the city over three months and a lack of accountability in dealing with it. 

The report, which covered the period January 1 to March 31, 2019, made several damning findings while placing much of the malfeasance on leadership’s lack of consequence management against officials.

Issues raised included the poor monitoring of projects, lacklustre disciplinary processes, a lack of detail written into service provider contracts to measure delivery, and a mounting number of unimplemented recommendations from several hundred internal investigations. 

The City’s audit committee chairperson, Nala Mhlongo, presented the report to the executive council.

Mhlongo said the greatest amount in irregular expenditure – R16.9-million – came from services for upgrading Glebelands hostel, which was acquired without a tender process.

Next in line was the R9.9-million from the city’s economic development unit, which “procured services without following the relevant supply chain management processes for the Kwa-Mnyandu Development Facilitation”.

Additionally, R8.1-million within the same unit was non-compliant with the Municipal Finance Management Act s112 for “preliminary and detailed designs for the upgrade of water main projects along Anton Lembede [street]”.

Third in line was the city’s electricity unit, which incurred R8.2-million for services procured on expired contracts for fault repairs.

Irregular expenditure for the City’s Moses Mabhida Stadium amounted to R4.6-million, for which various services were provided without valid contracts, according to the report, while the water and sanitation unit racked up R900,000 in services “procured on an expired contract”.

No corrective action plans were initiated because it was found that no fraud had been committed.  But Mhlongo said the audit committee “did not agree” with this reasoning.

The report recommended that consequence management should be initiated against the deputy city managers that failed to take corrective actions on matters associated with irregularities. 

Speaking about the arrest of several employees for fraud and corruption, the report said management did not provide the audit committee with risk mitigation controls.

Mhlongo said the audit committee believed that the lack of action taken against the accused was of concern.

A lack of action could lead to victimisation of witnesses who were the subordinates of those implicated, intimidation and threats to potential witnesses, according to the committee.

A lack of action could also lead to tampering with evidence such as “audit trails and physical supporting documents”, new allegations arising of similar irregularities “as a result of the continued involvement [of those implicated], and a “bad perception” being created among other employees that the city was “tolerant of corruption”.

“The audit committee believes that management should take the appropriate and necessary actions in order to allow for a fair investigative process,” said the report.

Mhlongo further highlighted the city’s failure to implement the City Integrity and Investigation Unit recommendations against staff implicated in wrongdoing.

Currently, there are a total of 400 incomplete matters. 

The report once again recommended “consequence management” and said media reports of allegations of corruption should be taken seriously.