Probe uncovers Umngeni managers’ exploits

2009-06-09 00:00

Forensic report highlights

On the purchase of the mayoral residence, 1 Mimosa Road, Hilton, the report alleged:

. Official procurement and competitive bidding processes were not followed in the purchase. Payment was made in cash by the uMngeni Municipality, using funds from the Public Improvement Fund. The amount was not included in the adjustment budget and was therefore “unauthorised”. The intention to purchase the property was not communicated to council and Dumisani Vilakazi was negligent in failing to present to council the option of a cheaper, equally suitable home.

. The Mimosa Road property was purchased from DDT Civils (a supplier of the municipality) Jonathan du Toit, who bought it for R1,2 million. One month after the sale went through in October 2006, Vilakazi, on behalf of the municipality, signed an offer for R1,75 million, which Du Toit accepted.

.Vilakazi was negligent in that he failed to ensure that Du Toit performed alterations to the house as part of the purchase price.

On the allegedly corrupt relationship between Du Toit and Vilakazi, the report alleged:

. Du Toit paid R13 750 for Vilakazi to attend a rugby match in Twickenham in the United Kingdom in November 2006. According to the report, Vilakazi claims to have paid back R5 000, but could not supply proof. Vilakazi changed R29 650,32 to British pounds for the trip. On his return, he sold £1 000 to Du Toit, who transferred R14 762 into Vilakazi’s bank account, without setting off the costs of the trip. The report notes that the selling of foreign currency to anyone other than an authorised dealer is a criminal offence.

.During the three-year period between June 2004 to June 2007, DDT Civils, owned by Du Toit’s brother Danie, allegedly received work from the uMngeni Municipality amounting to over R39 million.

Allegations against municipal CFO Bertus van der Merwe are that he:

.Mis-stated cash flow projections to council and exco for two financial years;

.Failed to take reasonable steps to avoid unauthorised or wasteful expenditure in the purchase of the Mimosa Road property;

. Allowed the inflation of general managers’ official kilometres travelled;

.Allowed the overpayment on Vilakazi’s performance bonus;

.Used part of a R20-million loan from Absa incurred for capital expenditure on specific projects for the day-to-day running of the municipality;

.Failed to pass an adjustment budget within 60 days after purchase of the Mimosa Drive property;

.Failed to note deviation in procurement procedures;

.Failed to deduct taxes on performance bonuses to municipal employees;

.Together with technical services manager Eric Svensson, Van der Merwe is accused of incurring unauthorised expenditure in respect of a request for 41 invoices from municipal suppliers amounting to over R15 million, and the issuing of certificates for work that had not been completed. Cheques were held back and paid out in the next financial year with no application to treasury to approve the “roll-over”.

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