13 May 2016
Finance and Procurement Committee Decisions
To root out corruption in eThekwini Municipality, the City has implemented stringent disciplinary action against officials that are implicated in any wrongdoing.
If found that Supply Chain Management (SCM) policies and the Municipal Finance Management Act (MFMA) were violated, the City will implement disciplinary, criminal and recovery action.
In a report tabled before the Finance and Procurement Committee on 12 May 2016, it emerged that there was irregular expenditure which amounted to R142 million for the financial year ending 30 June 2015.
According to the report by SCM Unit progress has been made in dealing with officials who incurred irregular expenditure for that period.
All reports for irregular expenditure are submitted to the Bid Adjudication Committee, and thereafter to the Internal Audit and City Integrity and Investigations Unit (CIIU) for further investigation where necessary.
The report reflects that in some cases, disciplinary action has been taken while in other cases investigations are being finalised by CIIU. The report further states that disciplinary procedures are in the process of being conducted against implicated officials.
The oversight role of the Finance and Procurement Committee, which is chaired by Councillor Fawzia Peer has been instrumental in ensuring the reduction of irregular expenditure and conflict of interest cases.
To monitor the City’s spending, including the use of Section 36, the committee has requested monthly reports.
Section 36 is a minor deviation from the normal public tender awards.
In this regard the committee had requested an update report on the action taken by respective Heads of Department in dealing with all transactions which resulted in irregular expenditure.
The second report tabled at the committee by the SCM Unit included a report on all public tender awards including Section 36 requests or awards as of 31 March 2016.
The report highlights all contracts that have been awarded by the Bid Adjudication Committee in the month of March.
For the month ending 31 March 2016, 204 normal public tender contracts were awarded with the value of R910 650 771.35. Seven contracts were awarded in terms of Section 36 of the SCM regulations, totalling R56 130 503.37 which constitutes 4 percent of contracts awarded.
The committee noted the report, and stated that City Manager Sibusiso Sithole reserves the right to investigate the awards with a view to take disciplinary, criminal and recovery action where wilful and negligent violation of SCM policies and MFMA provisions are observed.
The oversight instituted by the committee has resulted in the reduction of Section 36 spending over the last four years. This has resulted in City being awarded a Clean Audit for the 2014/15 financial year.
The Committee noted the monthly report.
A report on investments for the March and April 2016 was also tabled and noted. As per the report the Municipality’s national credit rating as per global credit ratings company remains as AA- for long term rating whilst the short term rating stands at A1+. These are the highest ratings of all Metros. The Municipality has an average return rate on investments of 7.50 percent.
The committee also welcomed a report by the City Fleet Unit. The report shows that the key dashboard indicators reflect that the operations of City Fleet are in keeping with industry norms.
Areas of concern raised by the committee were with regards to the high consumption of fuel by certain vehicles. Head of City Fleet, Malcolm Joshua, explained that all red flags raised were investigated, adding that monthly reports are submitted to respective line departments for action if necessary.
Issued by eThekwini Municipality's Head of Communications,Tozi Mthethwa.
For more information contact Municipal Spokesperson Thulani Mbatha on 031 311 4820 or 082 651 6290 or email: or Princess Nkabane on 031 311 4818 or email:
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