R 800 million missing from East London Municipality

The Buffalo City Metropolitan Municipality (BCMM) cannot produce adequate documents to account for at least R 781 million spent during the 2012/2013 financial year, according to the Auditor General (AG).

Oxford Street after a protest march.
Oxford Street after a protest march.

This equates to more than R2 million rand per day that cannot be properly accounted for.

Details of these findings reveal that:

• The AG found R 65 million in irregular expenditure that BCMM officials did not disclose in the Annual Financial Statements.

This amount could in fact be much higher, as the Auditor General said that it was “impractical to determine the full extent of the understatement of irregular expenditure”. This is due to the lack of adequate systems and non-availability of sufficient evidence.

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• Measures to combat the abuse of the Supply Chain Management (SCM) system were not implemented as per the requirements of Municipal Regulations, as declarations of interest were not submitted to assess whether awards were not made to providers who; (1) had failed to perform satisfactorily on a previous contract, (2) committed a corrupt or fraudulent act in competing for the contract, (3) abused the SCM system of the municipality, or (4) had been previously been convicted of fraud or corruption.

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The DA believes that the issue of irregular expenditure incurred by BCMM can be attributed to a dysfunctional and corrupt Supply Chain Management (SCM) department.

“We have been promised that SCM will be overhauled for years; however the issues persist and serve as an example of the culture of corruption within Jacob Zuma’s ANC. The DA, once again, calls on BCMM to open up its tender processes and overhaul the SCM department in order to increase transparency and accountability to bring an end to the unrelenting looting of BCMM coffers,” said DA Councillor Lance Weyer.