eThekwini councillors, officials and workers are among those who, on the face of it, have illegally benefited from the city’s dysfunctional supply chain management system, with more than R147.3m in tenders awarded to them or close relatives, and to other employees of the state.
They include close relatives of mayor Obed Mlaba and an unnamed senior manager, who together received contracts totalling R88m in the past year alone. It’s been previously reported that Mlaba’s daughter, Thandeka, benefited from municipal tenders.
The latest information is contained in a management report from the auditor-general’s office dated November, 2010 to city manager Michael Sutcliffe. The report forms part of the metro risk and audit committee’s annual report for the municipal year ending June, 2010.It has yet to be officially tabled before the city’s executive committee.
The report states that seven contracts totalling R11.4m went to councillors, in direct contravention of the law and supply chain management (SCM) policies, and constituted irregular expenditure.
A further 46 contracts valued at R5.4m went to entities whose directors, members, principal shareholders or stakeholders were in the service of the municipality.
The report identified two municipal employees by name, who received contracts amounting to R76 886 and R60 000 respectively. A further R1.2m payment was made to one employee after he changed the company’s name.
In its response, the city said it was still investigating whether the individuals were in fact employed by the city at the time and whether their previous or current jobs had anything to do with the contract.
The report also highlights that 107 awards totalling R42.5m were made to 123 entities whose directors, members or stakeholders worked at other state institutions.
This too is prohibited by law and SCM regulations and constitutes irregular expenditure.
The auditor-general’s provincial representative, Herman van Zyl, noted that procedures were not in place to ensure that potential service providers were not state employees.
He notes that “non-disclosure constitutes a corrupt and fraudulent act which should be investigated and dealt with”. This could include cancelling contracts.
In its response, the municipality’s policy and support unit said it was impractical and not cost-effective to verify suppliers for all contracts under R200 000. It also did not have access to the payroll database of all government employees.
Sutcliffe added that searches via the Companies and Intellectual Property Registration Office (Cipro) did not always yield the right information, and it was difficult to undertake independent checks on the spouses and children of municipal staff and councillors.
“In this regard, access to Home Affairs and Sars records should be made available to municipalities to ensure they could do more thorough checks,” he said.
Many of the allegations centre on the awarding of housing contracts. There is already a separate investigation by Willie Hofmeyr’s Special Investigating Unit into municipal housing.
In at least 10 instances, goods and services worth more than R200 000 were not procured through competitive bidding processes or through Section 36 emergency awards. The management report adds that 30 electricity department workers were paid R10.6m in overtime, R4m more than their total salaries of R6.7m.
The city’s management blamed the huge overtime bill on “gross understaffing”, saying the vacancy rate for electricians’, superintendents’ and clerks’ posts was 50 percent.
“While management has done everything possible in the past three years, there is a chronic shortage of utility experienced electricians in SA.”
The city said it was also not able to compete with Eskom and private companies in paying salaries.
While significant gains were made to attract and train electricians in the past 18 months, most were inexperienced and needed training to become productive.
Another reason for the excessive overtime bill was attending to theft of networks and illegal connections.
“The alternative is to leave customers cut off from (4pm) until normal works hours the following day if overtime was to be avoided,” the municipality said.
Credit to: The Mercury
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