New mayor claims R124 million in unauthorised spending uncovered at Uthukela

2011-07-19 00:00

UTHUKELA District Municipality is in a financial crisis and the situation needs urgent attention, according to the new mayor, Dudu Mazibuko.

Mazibuko said that before the equitable share was paid into the municipality’s bank account, employees were paid by a bank overdraft of R5,5 million last month.

She said executive council (Exco) resolved during its sitting on Friday to look into ways of dealing with the crisis.

“The finances of the municipality are a mess. If you can see our [financial] statement at the end of June, it’s disastrous. We were rescued by the equitable share funds. If you look at last year’s auditor-general’s report you will be shocked.

“We took a resolution on Friday to make creditors’ age analyses as the municipality needs to know how much is owed to whom and for how long. We also resolved to review the municipal organogram.”

Mazibuko said the new leadership has discovered that the municipality has R124 million of unauthorised expenditure and R53 million is wasteful expenditure.

In February the Co-operative Governance and Traditional Affairs Department (Cogta) launched a forensic investigation into the affairs of the district municipality following allegations of fraud and maladministration.

Auditing company Moloi & Kirby seized documents under the observation of the Hawks. The same company was contracted in 2005 to undertake an investigation into the municipality.

Cogta MEC Nomusa Dube had said the allegations included bribery, money laundering, tender fraud and nepotism.

Former Mayor Mqapheli Sithole expressed his anger over the investigation, calling it a ploy by the ANC government in the province to discredit the municipality because it was led by the Inkatha Freedom Party. In all these investigations the department had found no misappropriation in the municipality, he said.

Hawks spokesperson Colonel McIntosh Polela said at the time: “The interest to us is that early last month we were investigating R3 million which was said to have gone missing, and we discovered R100 000 in cash in a house of one of the people connected to the municipality.

“We are investigating if the money was legitimately gained.”

Mazibuko said a skills audit to see if people are qualified and if they are suitable for the posts they occupy is imminent.

Municipal manager Siya Nkehli said there is nothing untoward about any organisation having an overdraft facility ready as a cushion to bridge any cash flow situation if the need should arise. He said interference of councillors into the administration of the municipality can prove problematic.

“That is why this is part of the contractual arrangement between the municipality and its bankers. It is not a problem for Exco to obtain reports about the council’s operations as they have the responsibility of playing the oversight role. However, it can be problematic if councillors interfere with administration of the municipality.”

Nkehli said the issue of the municipal finances being in a mess can only be evaluated against the Auditor-General’s findings on the municipal finances.

“This municipality has obtained unqualified reports for the past five years consecutively. The 2010/2011 financial year has not been audited by the Auditor-General yet. Therefore it is difficult to find the authenticity of the allegations regarding the R124 million and R53 million.”

Co-operative Governance and Traditional Affairs spokesperson Lennox Mabaso said the investigations into the municipality’s affairs are ongoing. He said that only after these are finalised can the MEC make an announcement about the steps to be taken.

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