The Tshwane metro says it will take aggressive steps against officials who are “enablers”, as it records the highest irregular and fruitless expenditure finding in four years.
A recent metro finance department report tabled in council revealed that it incurred R13-billion in unauthorised, irregular, fruitless and wasteful expenditure (UIFW) in the 202/21 financial year, the highest in four years.
The department said the growing UIFW indicates a lack of financial discipline within the metro.
Tshwane trend of UIFW:
– 2020/21: R13-billion
– 2019/20: R10-billion
– 2018/17: R5-billion
During the council meeting, councillors raised concerns about the growing year-on-year irregular expenditure, saying the money was being misused and this affected service delivery negatively.
The report stipulated that an increase in UIFW worsened metro finances.
“The trend also points towards non-adherence to internal controls, lack of financial discipline and non-compliance to supply chain management legislation as well as lack of consequence management,” the report read.
The report said the causes of the increasing UIFW were unfair disqualification of bidders, mandatory sub-contracting for tenders over R30-million not complied with and inadequate capacity within departments to manage UIFW.
Council approved a strategy for reducing and recovering UIFW as well as enabling it to open criminal cases against those implicated in wrongdoing.
“The strategy requires that the metro makes bold moves and commit to the various processes to reduce the current balance of R13-billion by 2023/24,” the report read.
There are the UIFW tenders under investigation as outlined in the new strategy:
– Unused ICT systems that cost R47-million in 2018/19
– Upgrades to City Hall costing R62-million
– The R800-million spent on security services but not disclosed in the 2017/18 annual financial statements
– The R41-million spent on outdated electricity meters in 2018/19
– The Tshwane market procuring R5-million worth of unsuitable software in 2018/19
Republican Conference councillor Lex Middelberg said the report showed an “embarrassing lack of concern and non-adherence to risk management control”.
“The deterioration of control despite repeated warnings over the last three years is a failure of the government,” he said.
“There are systemic problems. The issues raised to the mayoral committee and council are to a large extent ignored. This is a warning to us all that this executive is a failure.”
EFF Leofi Leshabana said the increase of irregular and fruitless expenditure was worrisome as the municipality also had financial problems.
“This municipality has failed to increase the salary of employees, alleging that it does not have money and yet we are called to discuss UIFW worth billions of rands.
“Millions are wasted on unauthorised expenditure,” Leshanana said.
Leshabana said he was not confident that the department’s strategy would curb the irregular and fruitless expenditure.
“Even if we are going to create further laws and regulations, there is just reluctance.
“Consequence management is not in place, people just do as they wish. In the past 15 years I have not heard of the metro taking someone to court for either stealing or doing what he was not supposed to be doing.”
In May, council instructed that irregular expenditure in its multi-billion rand contract with GladAfrica be recouped or criminal charges be opened against implicated staff.
The DA said a forensic report found that fraudulent invoices were submitted and that the contractor grossly overcharged the metro.
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