Buffalo City Metro’s political and administrative bosses were on Thursday hauled before the institution’s watchdog committee to be grilled about billions of ratepayers’ money spent irregularly, according to the auditor-general.
Metro leaders, including mayor Princess Faku, city manager Mxolisi Yawa, council speaker Humphrey Maxegwana and the city’s finance directorate bosses, led by finance portfolio committee head NomaAfrika Maxongo and acting CFO Vincent Pillay, finally appeared before the public accounts committee (Mpac) at a packed meeting in the East London City Hall.
The engagement had been postponed numerous times and had to be rescheduled due to the unavailability of Faku on the previously scheduled dates.
This was confirmed by Mpac chair and ANC councillor Sakhumzi Caga on Thursday.
While the metro leaders, including BCM Development Agency bosses, were questioned over several issues flagged by the auditor-general in her latest audit, it was the issue of irregular expenditure amounting to more than R1.3bn in the year under review, and the lack of consequence management for those responsible, that occupied the meeting for its first few hours.
The R1.3bn irregular expenditure is for the 2023/2024 financial year, with the city having racked up more than R10bn in such expenditure in the past few years.
AG Tsakani Maluleke had given the city qualified audits on eight matters relating to assets and how they were managed, and had also raised some serious concerns about billing and revenue management.
The senior leaders were questioned about issues including long-standing and slow-moving projects, wrongly classified infrastructure assets, landfill rehabilitation, state vehicles in for repair for lengthy periods, unverified metro assets, billing irregularities and the city’s allegedly ineffective audit improvement plan.
The multiparty Mpac members had bemoaned the city’s lack of consequence management in dealing with some of the AG’s issues, including the escalating irregular expenditure which committee member and DA councillor Anathi Majeke described as a “culture problem”.
Majeke said while the city was a “serial offender” when it came to irregular expenditure, a persistent culture of impunity surrounding consequence management relating to supply chain management irregularities was the core problem and one of deep concern.
“Management’s reluctance, driven by fear and a lack of political will, prevents effective action on root causes and, consequently, irregular expenditure has escalated annually.
“Furthermore, insufficient information provided to Mpac consistently hinders their ability to make meaningful recommendations to the council, compounding the year-on-year increase in irregular expenditure,” Majeke said.
Caga said the committee was deeply concerned and worried by the lack of consequence management.
This meant for those responsible for a number of transgressions, including the incurring of irregular expenditure, it was “like a free-for-all for them in the city, with people doing whatever they feel like doing with ratepayers’ money”, knowing that there would be no serious repercussions.
Caga said this lack of consequence management was a “material finding” from the AG.
If it were not addressed, irregular expenditure would become a culture in the city.
EFF councillor and Mpac member Mziyanda Hlekiso said lack of consequence management was negatively affecting operations.
Hlekiso hoped the newly established disciplinary board would have teeth in dealing with some of these challenges.
Another Mpac member, DA councillor Geoff Walton, said there was something wrong in the city as the issue of irregular expenditure “has been going on year after year”.
While the R1.3bn irregular expenditure was a concern, as it showed that procedures were not followed, Walton was equally concerned that “procedural issues were allowed to persist”.
ANC councillor Phumezo Jaxa said BCM leaders should not hesitate to subject those found responsible for such irregular expenditure to the city’s disciplinary board if there was prima facie evidence against them.
The AG raised concern that between July 2023 and January 2024 no disciplinary action took place in the city.
She was also concerned that no investigation related to some of the irregular expenditure had taken place in recent years.
In response, Yawa said the city needed to take a comprehensive look at applying consequence management.
He said the deliberate disregard of rules and regulations in how things were done in the municipality was a “culture issue”, adding: “Culture is something that is stubborn and does not easily move away from an organisation.
“The problem of performance and the breaking of rules will be the culture of the organisation if consequence management is not instilled.”
Yawa said ethical and cultural training was needed for all BCM employees “so they could understand the dos and don’ts”.
While Yawa said the bulk of BCM’s irregular expenditure was historical and had been dealt with through Mpac processes, “it is not like we are doing nothing in dealing with irregular expenditure”.
“We have identified some irregular contracts which have since been declared unlawful by courts, contracts which we have since terminated, so we could start on a clean slate as the municipality.”
Faku, who was to be grilled on a number of issues, including the lack of consequence management, was yet to take the podium at the time of writing on Thursday.
So too BCM Development Agency bosses who were to account for, among others, a R13.1m irregular expenditure and R48.9m in fruitless and wasteful expenditure.
Daily Dispatch
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