IFP municipality to write off R396m in unauthorised expenditure

The council of the Zululand district municipality in Ulundi in northern KwaZulu-Natal has voted to write off R396-million in unauthorised, irregular, fruitless, and wasteful expenditure, which was incurred in the 2023-2024 financial year.

The Inkatha Freedom Party-run municipality, led by Mayor Michael Khumalo, will now have to write to the MEC for Cooperative Governance and Traditional Affairs (CoGTA), Reverend Thulasizwe Buthelezi, who, ironically, was the mayor when the expenditure was incurred.

Water projects that failed

Moreover, most of the expenditure was incurred in water projects that failed to come to fruition, leaving people without clean water for years. This is as the district municipality is tasked with providing water and sanitation services to the Ulundi, eDumbe (Paulpietersburg), Uphongolo, Nongoma, and Abaqulusi (Vryheid) local municipalities.

The true picture of the expenditure is contained in a report compiled by Mtambo Financial Consulting CC. It was tabled to the council for consideration last week. In the same report, the firm advised that the figure may not be accurate and it may change if new information comes to light.

“It should be noted that despite a diligent effort on our part to obtain all information and documentation relevant to conduct the investigation, we cannot guarantee that such is accurate. Therefore, our opinion and conclusion may change should further documentation or information be obtained or made available to us that materially impacts on this investigation,” the firm said in its report.

Irregular procurement processes

Amongst the projects where there is irregular expenditure is the Phethu water scheme. This is where the municipality paid R20-million to Mqhele Wethu Trading and Projects. The firm found that Mqhele Wethu Trading and Projects did not disclose local content on their tender documents as required by the preferential procurement regulations, 2017.

“The supply chain manager, evaluation committee and bid adjudication committee, did not ensure that the bid was evaluated as per the conditions specified on the tender document.

“The award was approved by the municipal manager without checking if the tender was evaluated as per the conditions on the tender document and that the evaluation also complied with the relevant legislation,” the report noted. It recommended that the municipality should refer the matter to the Municipal Financial Misconduct and Disciplinary Board.

The report also flagged a company called Fakalintuli Construction and Services. It was appointed in August 2022 to provide fuel, but it was later found to be doing work outside its scope.

Appointment outside scope of rules

“The service provider was appointed for the supply and delivery of fuel and related services. Upon review of the payment vouchers, we noted that the service provider was providing repairs and maintenance to different sites of the Zululand District Municipality.

“The appointment was approved by the municipal manager as per the appointment letter. This was outside of their scope as stipulated on the tender document,” the report stated.

In another bizarre transaction, Multichoice Africa (PTY) LTD was contracted to provide television subscription services. But there was no service level agreement signed by the service provider and the municipality.

“Irregular expenditure amounting to R26, 847,00 was incurred during the 2023/24 financial year. The payments were approved by the HOD: Corporate services. No competitive bidding process was followed by the municipality for this procurement.”

The municipality confirmed that the council voted to write off the expenditure. But the officials are not off the hook.

“The council resolved to write off as well as to subject all those responsible to account before the independent municipal disciplinary board,” it said in a response sent to Sunday World.

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