Durban cuts irregular expenditure by R151m

31 July 2019 | Web Article Number: ME201915653

Government & Municipal

DURBAN’S eThekwini Municipality has put measures in place to reduce irregular expenditure in the city. This follows the tabling of a report at an Executive Committee meeting held on 30 July which outlined irregular expenditure incurred during the 2018/19 financial year.

According to the report, there has been a decrease of almost R151 million in irregular expenditure in 2018/19 compared to the 2017/18 financial year.

The tabled report noted that irregular expenditure, which is a result of non-compliance with supply chain management policy, was R581 492 759.38 for the 2018/19 financial year. Included in this amount is R138 272 435.63 relating to the previous financial years (prior to 2018/19) and R443 220 323.75 relating to the 2018/19 financial year. Irregular expenditure in the City was R733 million in the 2017/18 financial year.

It was noted during the meeting that goods and services were received and that value for money was received for the irregular expenditure incurred.

While there has been a noted decrease in irregular expenditure, the municipality has implemented measures to further reduce it. This includes its process to address unauthorised, irregular, fruitless and wasteful expenditure which is currently being aligned to the amended Municipal Finance Management Act (MFMA) Circular 68, the report states. Once finalised, relevant reports will be submitted to the respective stakeholders as prescribed, including Council.

The report notes that a parallel process has been initiated to analyse all unauthorised, irregular, fruitless and wasteful expenditure, including amounts brought forward from the prior year. The report further states that based on the outcome of the analysis and the respective status of each item, the appropriate process will be followed to address this expenditure in line with the requirements of Section 32 of the MFMA and the amended MFMA Circular 68.

The tabled report further recommended that depending on the outcome of investigations by line departments, the City Integrity and Investigations Unit (CIIU) and the Municipal Public Accounts Committee, further action may arise including disciplinary action, recovery of monies and criminal charged being instituted where applicable.

Acting eThekwini Mayor Fawzia Peer said there was political will to ensure irregular expenditure did not increase in the City.

“I am happy that goods and services were delivered for this money. Irregular expenditure is very different from wasteful and fruitless expenditure. However, I encourage departments to plan in advance especially when contracts are expiring to avoid irregular expenditure,” said Acting Mayor Peer.

Speaking on the tabled report, Deputy City Manager of Finance Krish Kumar said the City has zero tolerance with regards to irregular expenditure and continued to look at ways of reducing it.

He said no payment was made, in terms of irregular expenditure, where services were not rendered. “Goods and services were delivered and we received value for money.”

Help for Msunduzi

Exco also considered a report detailing how officials from the City’s Electricity Unit will offer technical support to Pietermaritzburg’s cash-strapped Msunduzi Municipality.

The report states that there was a request from Msunduzi Municipality, via the Office of the City Manager, for technical support for the electricity business of the municipality. The report notes that Msunduzi Municipality is currently placed under administration and is undertaking improvement projects to stabilise and organise their departments.

The report noted that eThekwini’s Electricity Unit successfully operates and maintains a similar electrical topology to that of Msunduzi Municipality, albeit on a larger scale, which as a result means they possess the necessary skills and experience in the requested support areas.

According to the report, there are no financial implications for eThekwini as only “soft support” is being provided which includes the allocation of suitably skilled staff to engage and carry out the assessment exercise in conjunction with Msunduzi Municipality staff. The support includes technical analysis, capacity building, skills transfer, information sharing and training.

Acting eThekwini Mayor Fawzia Peer welcomed the report saying there are a number of skilled personnel in the City adding that she was honoured and proud that eThekwini Municipality is able to assist another municipality.

She stressed however, that this assistance must not impact or hinder service delivery in the City.

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