Durban — The eThekwini Municipality met only 46% of its targeted objectives for water, sanitation and electricity and incurred R1.5 billion in irregular expenditure.
Also, employees in the service of the municipality whose close family members had a private business or interests, and municipal workers who had business interests in contracts awarded by the municipality, failed to disclose such interest. The municipality also lost 56.2% of water it had bought.
This was revealed at a full council meeting on Tuesday in an auditor-general (AG) report compiled for July 1 to September 30, 2022.
The report stated that the Kingsburgh, Isipingo and Mpumalanga waste water treatment works did not have valid operating licences, as per the national Water Act.
Also, the Northern waste water treatment works in Sea Cow Lake were not maintained to prevent malfunctioning infrastructure that could not operate as intended, as required by the Municipal Finance Management Act (Mfma).
In terms of expenditure management, it was reported that the City did not take reasonable steps to prevent the irregular expenditure of R1.5bn.
Most of the irregular expenditure was as a result of non-compliance with supply chain management regulations.
The report found reasonable steps were not taken to ensure that the municipality implements and maintains effective systems of expenditure control. These included procedures for the approval or authorisation and payment of funds for expenditure related to the Expanded Public Works Programme (EPWP) and Presidential Employment Programme.
The compliance findings by the AG were that some goods and services with a transaction value over R200 000 were procured without inviting competitive bids, as required by the Supply Chain Management Regulations (SCM).
The AG recommended that management improve controls over demand management and planning to ensure a competitive bidding process.
The AG stated that the accounting officer should implement and monitor effective consequence management structures within the municipality to ensure disciplinary proceedings were instituted timeously and officials were held accountable for their actions.
The AG recommended the municipality have a sound system of internal control and effective governance structures to achieve its goals.
Proper record-keeping measures should be implemented to ensure that complete, relevant and accurate information is accessible and available to support performance reporting as well as compliance with applicable legislation, the AG said.
African Democratic Change leader, Visvin Reddy, said the report painted a bleak picture of poor management and confirmed that the council was on the verge of collapse.
“Of particular concern to us is that 56.2% of water bought by the municipality is lost. The City buys about 402 million kl of water but sells only about 175 million kl.
“This means that eThekwini residents are paying for these huge water losses. The biggest contributor to non-revenue water is ageing infrastructure. With the money spent on water lost, this could be used to replace pipes,” said Reddy.
DA eThekwini caucus leader Thabani Mthethwa said many of the findings against the City are a repeat involving the same transgressors.
The City racked up a bill of R1.5bn in irregular expenditure, he said – a significant rise over the preceding three years.
“The AG also disclosed that the City has not recovered any of the money that was improperly spent and has no intentions to do so.
“The irregular expenditure closing balance also indicated that R554m was written off, with over R3bn remaining unaccounted for,” said Mthethwa.
IFP councillor Jonathan Annipen said the loss of water and associated financial implications; the anomalies around the EPWP project; ghost employees and other critical areas of concern cannot be allowed to go unchallenged.
“The City has a responsibility to its residents to manage ratepayers’ money in a prudent manner. They have clearly failed to do this,” he said.
Democratic Liberal Congress leader Patrick Pillay said this astronomical water loss is an indictment on the City and its leadership in terms of dealing with infrastructure defects and water leaks effectively.
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