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A recently released report has revealed that eThekwini metro municipality, with an annual operating budget of close to R19-billon, has recorded irregular expenditure of R2,188-billion in the past three years.

The report, by Manase and Associates, commissioned by the KwaZulu-Natal Department of Co-operative Governance and Traditional Affairs, followed the 2009/2010 auditor-general’s report, which revealed widespread maladministration, fraud and corruption in eThekwini.

Findings against eThekwini’s former city manager, Mike Sutcliffe, and former mayor Obed Mlaba, did not relate to fraud, but rather to their failure to declare personal interests and to take action against corruption within the municipality.  Other city officials mentioned in the report, which was tabled before the eThekwini council on Tuesday April 7, face more serious allegations. Officials have been given 21 days to respond to the report.

eThekweni is not the first municipality to have landed in hot water recently. Last month the ANC in the North West recalled two of its mayors, Boitumelo Moloi and Andrew Maphetle, for alleged corruption. Only seven municipalities received clean audits in the last financial year, with Auditor-general Terence Nombembe blaming corruption in supply-chain management and weak accountability systems for his findings.

eThekweni is of particular concern because of its size and its large operating budget. Many of the contracts under scrutiny are for multimillion-rand housing and infrastructure tenders granted to companies who were not registered with the National Home Builders Registration Council and who delivered houses so poorly built they had to be demolished, or whose work had to be stopped because of structural defects.

Among the findings of the Manase report were: R2-billion in irregular expenditure; 161 municipal employees doing business with the municipality; appointment letters issued to three contractors who had become involved in the R24-million Westrich Housing Rehabilitation Programme before they had submitted the required documents and at least 14 metro police officers who were found to be taxi owners with outstanding fines ranging between R5 000 and R117 000.

Shortly before the report was released SA Municipal Workers Union (Samwu) officials downed tools and marched to City Hall to hand over a memorandum to mayor James Nxumalo calling for the city to remove metro police head Eugene Nzama and to root out what they said was mismanagement, nepotism and inequalities in the force. Samwu provincial secretary Jaycee Ncanana called for urgent action to be taken, saying the union feels vindicated by the Manase report.

Nxumalo, while emphasising that nobody has yet been found guilty of any transgression, said the metro’s executive committee would study the document and decide how to proceed. He called the report “a wake up call”.

Co-operative Governance MEC Nomusa Dube has recommended that disciplinary procedures be implemented against all officials named, and the report recommends a forensic investigation into all irregular contracts. The report also calls for the tender process for the waste reduction plant at the Bisasar road landfill site to be restarted after questions were raised about the involvement of two daughters of the former mayor, Obed Mlaba, in companies that tendered for and won the contract.

Shortly after the eThekwini report findings were released, the South African Local Government Association (Salga) announced that it would set up public accounts committees in all municipalities to introduce more controls.

Salga CEO Xolile George said it is hoped that the establishment of public accounts committees at municipal level – they already exist at national and provincial level – will help to address problems of this kind.

The committees are empowered to hold officials accountable for the way they use public funds.

An independent report reveals billions in irregular expenditure by one of the country’s largest municipalities, eThekwini in KwaZulu-Natal.