KwaDukuza Municipality has been holding on to money earmarked for important projects in the district.
This underspending on capital projects was one of the red lights that stood out in KwaDukuza mayor Ricardo Mthembu’s mid-term annual report last week.
It showed that KDM had only spent 30 percent of their budget for projects like housing, electrical infrastructure upgrades, and road maintenance.
Commenting on the municipality’s finances, an independent auditor general said the lack of spending was especially worrying because KDM had reduced its capital budget (the money they would spend on projects) from previous years. The budget currently sits at R344.7 million.
“To still see a 30 percent underspending on a reduced budget is a point of concern and grant money which is unspent is often requested back by the national treasury to be allocated back to other municipalities”
Last year, the municipality had to give back R15 million of grant funding, meant to be spent on electricity infrastructure upgrades, to the national treasury.
Out of the R20 million earmarked for electrical upgrades, only R3,6 million had been spent by December last year. Around R160 000 out of the budgeted R600 000 had been spent for public safety which relates to buying of emergency equipment for disaster management. Only about one million of the allocated R4.5 million has been spent on housing projects.
Another problem was irregular expenditure at a high of R127 million despite a 50 percent decrease from the previous year. This suggests a serious problem in KDM’s supply chain processes which deals with the sourcing and buying of goods and services, tenders and contracts.
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Most local councillors said this was simply unacceptable. DA caucus leader Madhun Sing said underspending on projects was a trend that showed poor service delivery.
“That is your IDP and it shows that we are not delivering to the people and this is a trend in the municipality that needs political intervention. When you get money from grant funding, you need to have a plan in place to spend it. With regards to irregular expenditure, the accounting officer needs to take more caution when it comes to procuring goods and services. There must be more consequence management.”
IFP PR councillor Moosa Motala suggested an urgent need for joint political intervention.
“The mayor’s report did not touch on the issue of land and this municipality’s stance on it. There was also no views on economic transformation in terms of investments and job creation. We need to form a committee and analyse this report because their are a number of issues we need to look at before we get a clean audit.” A task team has been formed to address the problem of underspending.
ANC chief whip Dumisani Ndimande, however, welcomed the report saying that while there was still room for growth, the report showed improvement.
“We must appreciate the 50 percent drop in irregular spending and commend the departments on the measures put in place to curb the trend.”
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