R100 million in irregular KDM spending

More than R100 million has been found as irregular spending during KwaDukuza (KDM) municipality‘s quarterly auditing.

The shocking amount of R100 million is for spending recorded from May to November this year. Only seven months.

KDM’s irregular spending amount has increased from 2013’s R62 million and last year’s R86 million.

While in this case the term ‘irregular spending’ does not necessarily point to fraud, it shows that the processes in recording payments as well as tenders are not being followed correctly.

Grass cutting services, G4S security and payments to Dolphin Coast Waste Management were among the highest amounts classified as irregular with a combined amount of R15 million.

Some of the reasons listed by auditors for irregular spending were that there was no competitive bidding in the tender processes and expired contracts with KDM’s service providers.

DA caucus leader Madhun Sing said that the increasing amount is blamed on not following proper processes is worrying.

“It works that the municipality has to follow the correct steps especially when it comes to tenders. Tenders are to be advertised for 30 days. If tenders are advertised for 29 days it will count as irregular spending. When money is paid out but the documents and the tender process were not followed it counts as irregular and has to be investigated.”

Grass cutting contracts have not been renewed for five years but they have been extended on a month-to-month basis. That is not how it is supposed to work,” said Sing.

While no cases of fraud were discovered, DA Cllr Malcolm Hubner worries that the flawed processes in recording spending might lead to fraud in the future.

“In any institution weakness in the system allows for fraud to take place. The trend shows that irregular spending is increasing through the years and we need to find out why.

“The matter has been handed over to the municipal public accounts committee for an investigation. They need to report to council where the weakness in the system is and why processes are not being followed. This needs to be fixed.”