Mngadi may face charges over money

2008-02-07 00:00

Former uMgungundlovu municipal manager, Monica Mngadi, and her chief financial officer, Bongani Ndlovu, are likely to face criminal charges over the payment of more than R3 million to an allegedly unregistered company without a VAT number.

The company, African Influence, allegedly provided events management and catering services as well as stationery, including 80 staff diaries priced at R649 each. Sources allege that the diaries never arrived.

According to municipal legislation, it is illegal to source services from unregistered companies, but attempts made by The Witness to verify registration details of African Influence were in vain.

Details on the dealings at the municipality were revealed in a KZN Treasury audit report.

African Influence is one of several "preferred" companies that provided services to the municipality and allegedly received payments without proper requisition and purchase processes being followed.

Some suppliers were paid before purchase orders were approved, with a number of invoices being inflated by a 20% "management fee".

Duplication of payments was also found, along with evidence of the procurement of goods from "preferred suppliers".

The inadequate monitoring and compliance with supply chain management policy led to a loss of over R28 million at the district. When tender or service contract applications were received, the audit uncovered that the most competitive quotations were not always accepted and tender processes not properly adhered to.

The report also indicates that both Mngadi and Ndlovu did not comply with various aspects of the provisions of the Municipal Finance Management Act and deviated from the supply chain management policy between July 2007 and November 2007. The Treasury was unable to completely review tender processes as the district could not provide them with adequate tender or contract files, because the filing system was inadequate.

Over and above negligent expenditure, Mngadi and Ndlovu failed to report to council on shortfalls and over-expenditure. When adopting a financial recovery plan,

uMgungundlovu councillors were shocked to learn in December 2007 that council’s total expenditure for July to November 2007 amounted to R114 million, a monthly expenditure of R20 million.

At a media briefing at the municipality this week, head of Treasury Sipho Shabalala said the Treasury is aware of the financial problems experienced at the district and is assisting the municipality.

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