Nelson Mandela Bay Municipality Budget & Treasury Directory Wants R50.7 million Used On Housing Rectification Recovered

SEPTEMBER 12, 2014

The Budget and Treasury Directorate wants to know how the R50.7 million spent on the rectification of houses out-side the “approved scope of work” will be recovered.

In a report to the Budget and Treasury Committee, which meets this week, the directorate explains a Project Assessment Committee meeting had been scheduled at which the question of the ratification of the expenditure of R50.7 million incurred in rectification of “extended houses” would be addressed.

It says this was authorised “outside the approved scope of work” and therefore not in terms of the original agreement between the municipality and Provincial Department of Human Settlements.

The report says that Budget and Treasury has been “informally” advised that the application by the municipality has been “unsuccessful, as the municipality did not comply with the housing code,” and that a formal communication will be forwarded by MEC Helen Sauls-August.

The report states that the situation “has enormous financial consequences for the municipality,” adding that Human Settlements Executive Director Lindile Petuna will have to advise Council on how he intends to recover the funds.

The R50.7 million, it says, was “crucial” to the reduction of the Housing Revolving Fund limit to below the R100 million threshold - it currently stands at R139.3 million.

Budget and Treasury now wants Petuna to advise City Manager Mpilo Mbambisa on “the processes to be followed to re-cover the R50.7 million expenditure incurred on the rectification of extended houses”.

The directorate is also concerned that an instruction was given by the Director: Housing Delivery to his staff to submit claims directly to the provincial department “by-passing” the required processes of Budget and Treasury.

This, it adds, is “seriously affecting the CFO Trevor Harper’s internal control function and the ability to ensure that all revenue in respect of subsidised housing due to the municipality is collected and correctly recorded”.