By More Matshediso
Pretoria – The Matlosana Local Municipality administrator, Paul Serote, has been asked to fast track the municipality’s action plan, and to submit an audit report to the council soon.
The North West Provincial Legislature on Wednesday said the request, made by the Legislature’s Portfolio Committee on Tuesday, came after a meeting held by the committee and the municipality.
The meeting was held to discuss the municipality’s current state of affairs, including matters pertaining to governance, bulk infrastructure, service delivery, corruption, and successes and challenges.
The Portfolio Committee chairperson, Raymond Elisha, said Serote must implement the action plan, and that the investigation should be regularly monitored.
“The administrator should also take action on employees contravening the supply chain policies, and ensure that service providers involved in financial misconduct are blacklisted. The audit report needs to be tabled before the council very soon,” Elisha said.
The municipality was placed under Section 139(1) (b) intervention by the Provincial Government in March last year, as a result of its deteriorating financial status, which compromised service delivery.
Serote has discovered that supply chain management was not operational, and bid committees awarded tenders without sufficient documentation.
The Provincial Legislature said for the financial year of 2013/14, the municipality has an unaudited irregular expenditure of R211 million.
Serote said this was caused by non-submission of relevant documentation, tax clearance certificates and three quotations by service providers to the municipality.
“There was a culture of employees defrauding the system through cover quoting by manipulating ‘three quotation system’, whereby multiple quotations are submitted by individual companies who share the same information. It usually includes internal employees in the municipality,” said Serote.
He said the municipality is owed revenue for services of over R1 billion by communities and owes Eskom close to R130 million.
Serote said a forensic investigation has been instituted into financial misconduct in the municipality.
“We are analysing supplier data to ascertain certain links which resulted in suppliers sharing VAT numbers, bank accounts, postal and telephone addresses, and comparing employee database with the vender database to check further links,” he said.
“Cases of fraud are opened with the South African Police Services (SAPS), which include suspected payment of R1.5 million to an incorrect bank account, overpayments to suppliers, and price escalations outside the service level agreements,” Serote said.
Serote developed a draft recovery plan, which includes cost containments, detailed payment reviews, daily cash management and new asset register and monthly reconciliations.
Municipal Public Accounts Committee (MPAC) chairperson, Lawrence Mabunda, said there is possible misrepresentation of financial information in the financial years 2012/13 and 2013/14.
“Even though implementation of Council Resolutions on MPAC recommendations remain a challenge, current intervention is a success of MPAC,” said Mabunda. - SAnews.gov.za
