IRREGULAR expenditure at eThekwini surpassed R2.3 billion according to the auditor’s report presented to the full council yesterday.
The irregular expenditure more than doubled from the previous financial year of 2017/18 where it stood at R733 million.
“The majority of the irregular expenditure related to the instances where there was inadequate evidence as well as irregularities identified relating to the approval for the use of certain suppliers for the IT system,” said Erin Sampson, Senior Manager at Auditor-General of South Africa.
Sampson added that there were several invalid assessments to supply chain management (SCM) contracts, the city failed to follow competitive bidding processes and three quotations were not obtained.
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“The root cause of this is a lack of effective consequence management for transgressions with prescribed SCM regulations, policies and procedures preventing the municipality from complying with laws and regulations,” she said.
Although the eThekwini municipality maintained their unqualified audit opinion, there were also six material findings reported on the status of findings on predetermined objectives (increase from 2 in the past year) and 3 findings of non-compliance (increase from 1 in past year).
“These findings are a result of insufficient evidence that procurement of contractors were monitored. Competitive bids were not advertised for the required minimum period of 30 days and procurement was not always done in competitive bidding and (contracts) were approved where it was practical to invite bids,” said Sampson.
There were no material findings for Durban Marine Theme Park but the Durban International Convention Centre regressed to unqualified findings.
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Nicole Graham, Democratic Alliance eThekwini caucus leader, asked the AGSA what could be done to curb irregular expenditure.
“A lot of what you highlighted in your report seems to relate to a lack of internal accountability that people are effectively doing things they should not do and there isn’t enough restriction of that behavior or accountability,” said Graham.
Sampson recommended the implementation of “effective consequence management” and better oversight in SCM to improve the city’s audit outcomes.
Mxolisi Kaunda, Mayor of eThekwini, was more optimistic of the report, stating that there are impovements but more work needs to be done in making oversight more robust.
“We must also make the management accountable to us as politicians (and) also to look at the performance conduct of the senior management,” he said.
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