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VIDEO: Trollip outlines plan to address Metro's R11.5 billion irregular expenditure dating to 2002

By Afikile Lugunya - Jan 23, 2018
VIDEO: Trollip outlines plan to address Metro's R11.5 billion irregular expenditure dating to 2002

Nelson Mandela Bay Executive Mayor, Athol Trollip, on Tuesday held a press conference where he announced a plan to address matters raised in the Auditor General's Mid-Term Performance Review Report, which found instances of irregular expenditure totaling around R11.5 billion and dating as far back as 2002.

The Mayor will table the full report at the upcoming Council meeting on Thursday.

At the briefing, Trollip, who was accompanied by Member of the Mayoral Committee (MMC) for Budget & Treasury, Councillor Retief Odendaal and MMC for Infrastructure, Engineering, Electricity & Energy, Councillor Masixole Zinto, emphasised on the importance of reporting back to local residents, especially on matters of the Metro's finances.

He said that there are many issues raised in the Auditor-General, Kimi Makwetu's, report were inherited by the current Democratic Alliance (DA) led coalition government from the previous African National Congress (ANC)-run administration.

“The new administration is only responsible for part of the expenditure to the end of the financial year 2016/2017. So, there must be dual accountability and responsibility for this type of report," he said.

“In the Auditor General's report, there are three findings of concern; the first one is of irregular expenditure, there is an amount there about 11.5 billion rand of irregular expenditure.

“This amount is largely historic because it goes way back to the financial expenditure of 2002, where there were very little internal controls, poor document management."

Trollip said that many important financial documents were found to be missing when the Auditor General was auditing the Metro.

He said that the R11.5 billion was mostly a result of contracts being awarded on an open-ended basis, "which means the contracts just grew and grew ... this was clearly illustrated in the book by Dr Crispian Olver, How To Steal A City - and those contracts were used for political purposes as well".

“What we found in the past is that there were just poor financial management conditions and we are now accountable as the new administration to regularise that or to write it off so that we can start off on a clean slate - so that we can deal with our own clean financial year,” the Mayor said.

He added that at the end of the financial year, the DAled coalition will have to account to the residents of the Metro, hence they are working hard that they avoid coming up with excuses at the very last minute.

“In order to avoid further irregular findings around plant and equipment, depreciation and attention or creditor’s payment, we have come up with a 14-point management plan.

“It is there to make sure that, in conjunction with the Auditor General, we will not have questionable findings," Trollip told journalists.

“We are dealing with public money and I’m very serious that we will account for public money and make sure that we get value for money. To that, we have employed a quantity surveyor, a demand management director who will make sure that every single contract is ensuring that we get value for money as an organisation."

The Executive Mayor added that they have since hired a new Supply Chain Management Director and dismissed the previous director to ensure better management of the supply chain process.

The Metro has also developed a UIFW Policy to better handle historic financial issues; has for the first time signed procurement plans for the 2017/18 financial year to improve supply chain processes, expenditure patterns and limit deviations; and have finalised delegations to the Executive Directors to sign-off on contracts, which will serve as a financial control for the current financial year and improve contract management and accountability.

Trollip said the Metro has also initiated a contract management unit, which specifically deals with the contracts that the City enters into and ensures that all processes are correctly followed in terms of legislation.

An Electronic Management System has also been put in place to monitor and manage contracts while they have adopted an improved file management system - including the central storage and securing of tender documents. 

The Metro is also investigating all prior year tenders, which are open-ended in order to prevent further irregular expenditure.