Nelson Mandela Bay municipality set to write off R10bn

2019-07-03 06:01

THE Nelson Mandela Bay Municipality (NMBM) is on the verge of writing off R10 billion in limitation of scope amounts and irregular expenditure.

This comes as a result of the NMBM failing to spend the money in the metro during the previous financial year.

A recent proposal was made by the Nelson Mandela Bay Metro Public Account Committee (MPAC) to write off irregular expenditure and was submitted to council for approval.

Council will sit this Friday, but it’s unclear whether the irregular expenditure will be on the agenda.

However, without council’s approval, the NMBM will once again be the municipality with the highest irregular expenditure in the country.

This follows only two weeks after the municipality approved the 2019/2020 budget for the Nelson Mandela Bay metro with steep hikes in tariffs for residents. The tariff for property rates tax will increase by 7.7%; water, sanitation and refuse by 7.5% each; and electricity by 13.04% (on average pending NERSA approval).

According to the DA NMB spokesperson for budget and treasury, Leander Kruger, the funds being forfeited were money that was desperately needed for projects that would have improved the lives of residents.

Kruger added, “The situation is made worse by National Treasury’s warning that they are highly unlikely to approve any rollover applications for unspent conditional grants should council fail to appoint a permanent chief financial officer before the end of the financial year.”

Kruger said in a statement that, as of June 21, the Urban Settlements Development Grant (USDG) expenditure of 63% meant that R330 million had not been spent, while Integrated Public Transport System Grant (IPTS) expenditure of 48% means that R90 million had not been spent.

According to Councillor Lance Grootboom, the item does not fully comply with the legislated prescripts in dealing with writing off of irregular expenditure. In terms of legislation, a write-off can only occur after an investigation by a committee (in this case the MPAC) if council has found that the expenditure cannot be recovered.

“This is a blanket write-off. We need to ask ourselves, have we done due diligence? We are writing off without knowledge of whether we have any chance of recovery, and in terms of our own policy, writing off is subordinate to recovery. This proposal should have been tabled by the council on June 27,” Grootboom said.

While the ANC, EFF and UDM voted in favour of the proposed write-off, the ACDP and DA refused to support the item in its current guise, sighting among others, concerns over the costs involved with using a special disciplinary board to deal with these items.

According to a report from the NMBM, during the 2017/18 financial year, an amount of R7.9 billion relating to the historic limitation of scope and historic irregular expenditure was approved by council.

The NMBM has over 1 233 affected tenders from the previous write-off of R7.9 billion and on this item the total affected tenders are 557. Therefore the total affected tenders are 1 790.

Grootboom said that while he fully supported and understood the need to deal with this swiftly, this should not result in the NMBM being found to have operated outside the law.

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