Metro is clueless on spending of R744m

2015-02-15 18:00

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The Nelson Mandela Bay metro racked up nearly R744?million in unauthorised expenditure last year – but won’t or can’t say exactly how it spent the money.

Late last month the metro’s executive mayor, Benson Fihla, tabled a report in a special council meeting asking it to approve the write-off of R743?928?574 in unauthorised expenditure.

This was for the 2013/14 financial year and, according to Fihla’s report – which City Press has seen – it was broken down as follows:

»R605?million for human settlements (housing);

»R121?million on infrastructure and engineering; and

»R17 million for safety and security.

The report, signed by city manager Mpilo Mbambisa on January 13 this year suggests that R622.6?million of the money was for “non-cash flow” items.

“The actual expenditure exceeded the budgeted amount due to the impairment of land and buildings as a result of reduction in market values,” the report reads.

“The executive mayor recommends that the council … approve a special adjustments budget to authorise the unauthorised expenditure incurred relating to non-cash flow items during the 2013/14 financial year.”

That’s as close as it gets to explaining the nearly R744?million.

City Press spoke to engineers in the metro who said that building a government house, depending on the number of rooms, would cost anywhere between R80?000 and R120?000.

This means at least 9?000 houses could have been built with the unauthorised expenditure revealed by Fihla.

There is no mention in Fihla’s report of the R768.5?million the city incurred in irregular expenditure in the same financial period.

Last year, Auditor-General Thembekile Makwetu gave the metro a qualified opinion because of this irregular expenditure – a leap from R483.3?million in the previous financial year. In fact, Makwetu suggested in his report the figure of R768.5?million could be “understated”.

Makwetu also found there was no “consequence management” for unauthorised, irregular, fruitless and wasteful expenditure in the metro.

Nelson Mandela Bay is controlled by the ANC, but in January President Jacob Zuma disbanded the party’s executive committee in the region and replaced it with a task team headed by former Cabinet minister Charles Nqakula.

This move is widely perceived by analysts and party insiders as damage control ahead of next year’s local government elections.

Even the metro’s own audit committee is asking tough questions.

In a report dated January 12 2015 and signed by audit committee chairperson Greg Billson, it’s suggested that forensic investigations are largely ignored.

“As at June 30 2014, six forensic reports for investigations were submitted to the municipal manager, with little or no action taken to date,” Billson said in this document, a copy of which City Press has in its possession.

The metro’s spokesperson, Roland Williams, hadn’t responded to questions at the time of going to press, but City Press has seen a January 9 midterm report signed by city manager Mbambisa in which he explains the municipality’s underperformance.

In the report, Mbambisa says the metro has only achieved 60% of its own targets.

He blames:

»Project delays caused by protests;

»Poor planning by directorates;

»Delays because of prolonged supply chain management processes;

»A lack of funding;

»Labour disputes; and

»A high vacancy rate.

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