Irregular spending at East London Metro

DOWN THE DRAIN IN A YEAR: R150-million

The Buffalo City Metro (BCM) has incurred more than R150-million in irregular, fruitless and wasteful expenditure over the past financial year which ended in June, with R67,000 of that amount spent on renting vacant office space.

According to a report presented to council recently by city manager Andile Fani, the metro wasted R140-million paying service providers even though their contracts had expired.

Another R3.1-million was spent on emergency requisitions even though officials did not have permission from the accounting officer to justify the “emergency”.

The report shows that contracts worth R10.7-million were awarded without acquiring the three quotations as required by legislation for tenders of less than R30,000.

Auditor General Singa Ngqwala also declared more than R100,000 of the 2010-11 expenditure fruitless and wasteful, as the metro had spent R77,357 on litigation costs and R27,557 for cancelled tenders.

The report further states that R67,000 was spent in the past financial year to rent beachfront office space for the defunct Buffalo City Development Agency (BCDA).

“BCDA has incurred irregular expenditure to the amount of R67,098 due to the expired contracts being utilised in the 2011-2012 financial year.

“The irregular expenditure incurred was due to the upkeep of the BCDA offices as a result of a lease being in place, a lease that was terminated on June 30,” Fani stated.

Out of frustration, the council recently resolved to appoint a multi-party task team led by ANC councillor Sithembiso Tyilo, to look into why the city continued to incur such huge amounts in fruitless, irregular and wasteful expenditure, said council chief whip Sangweni Matwele.

This despite the irregular “red” amount dropping from more than R340-million in the previous financial year (2010-11).

Matwele said: “The multi-party committee was formed to investigate circumstances surrounding our irregular and wasteful expenditure so that they could provide council with more information on the matter.”

These challenges occured while the city struggles to fill vacant positions, including the crucial post of the chief financial officer (CFO).

The city hasn’t had a permanent CFO since Brian Shepherd left four years ago, with various city officials acting in the position since then. Pam Adonis currently occupies the post in an acting capacity.

The council raised concerns this week about the unfilled CFO post, saying it was detrimental to service delivery.

“Things will always be this bad as long as we do not show commitment towards permanent filling the CFO post,” PAC councillor Jerome Mdyolo said this week.

Executive mayor Zukiswa Ncitha had previously said that the post had to be re-advertised and that it was expected to be filled by the end of this financial year.

BCM has also been planning to resuscitate the defunct Buffalo City Development Agency, and had been recruiting board members.

However, in a report, Ncitha announced this week that the plan had been shelved as they had identified “some gaps” due to the city failing to budget for the agency.

“It must be noted that the process of recruitment is not yet complete because I have identified some gaps in the applications. I discovered that there was no one from the business sector and no one with fundraising expertise.

“At the moment there is no budget allocated to re-establish the agency and it is therefore premature to appoint the board of directors,” Ncitha revealed.