City fails to spend half its capital budget

2013-01-28 00:00

THE Msunduzi Municipality failed to spend 53% of its capital budget, almost R235 million, in the 2012 financial year, according to the Auditor-General’s (A-G) latest report.

The amount unspent came to R234,852  million. Despite the underspending, the municipality received its second consecutive unqualified report.

Several issues remain a concern for the A-G, such as as staff doing business with the council.

“Persons in the service of the municipality who had a private or business interest in contracts awarded by the municipality failed to disclose such interest,” states the report.

Concern was also expressed that awards were made to service providers who were in the service of other state institutions and that the performance of contractors or service providers was not monitored on a monthly basis.

Municipal manager Mxolisi Nkosi assured councillors the full capital budget would be spent before the end of the current financial year in June.

He said his team had already put in place a plan to deal with the matters raised by the A-G.

Nkosi added that the under-expenditure was the result of two major projects stalling, but said they were back on track.

The contractor on the New England Road expansion project, Cyclone Construction, was placed under liquidation by the high court in Pietermaritzburg earlier this month, and the contractor of the tourism hub in Langalibalele Street had absconded without completing the job.

Nkosi said the Independent Development Trust (IDT) had stepped in to complete the projects and the budget for the projects would be spent.

He added, however, that procurement would have to be done using emergency regulations, as there would not be time to go to tender as required by the law.

“I know that the A-G is not happy with this, but in this instance it is justified or we will lose the money,” Nkosi said.

He told the council that tenders had already gone out for the remaining capital budget, and that part of the money would pay for the Chota Motala interchange.

In the current audit, R27,4 million was irregularly spent compared with the previous figure of R222,8 million.

There was also no improvement in losses in the electricity and water accounts. Losses of R119 million were incurred in the electricity account in 2012, and R75 million in the water account.

The A-G also expressed concern with the following:

. Acting senior managers directly accountable to Nkosi did not sign annual performance agreements;

. Nkosi did not provide a job description for each post on the staff establishment;

. A credit control and debt collection policy was not implemented as required;

. There was inadequate record keeping;

. The municipality does not have a proper internal audit unit;

. The service delivery budget implementation plan was not consistent with the targets set by the council’s integrated development plan.

The audit report also noted that 37 internal investigations into mismanagement, fraud and corruption had been completed and 26 of them had resulted in criminal charges being investigated.

Thirteen investigations were still in progress.

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