The auditor-general and the National Treasury have been urged to intervene to stop the Nelson Mandela Bay council from writing off R23bn of historic unauthorised, irregular, fruitless and wasteful expenditure (UIFWE).
This comes amid moves by the council to approve a blanket write-off in breach of the Municipal Finance Management Act (MFMA).
The municipal public accounts committee (Mpac) descended into a bitter showdown last week over the R23bn write-off.
Opposition councillors accused Mpac chair Luxolo Namette of being railroaded into approving the massive write-off without first scrutinising supporting documents to see what the amount was spent on and assess whether the metro had received value for money.
According to a report, acting city manager Lonwabo Ngoqo sought legal advice to assist the municipality in investigating and addressing its UIFWE, which has accumulated over the years.
At least two opposition parties have since written to the auditor-general and the National Treasury asking them to intervene.
In a letter to the National Treasury, ACDP councillor Lance Grootboom said he had written to escalate concerns regarding a severe breakdown of financial governance and an imminent violation of the MFMA.
He sent the letter on Monday.
“The ANC-led coalition utilised their majority to bulldoze this item through the committee, completely bypassing proper legal processes,” Grootboom said.
“They intend to present this illegal item to the upcoming council meeting on August 25 to regularise and approve this write-off.”
He said the city was attempting to use a generalised three-year civil prescription rule to wipe the slate clean without conducting the mandatory item-by-item investigations required by the MFMA, National Treasury Circular 68 and the auditor-general.
A similar letter was sent to the auditor-general.
“The acting city manager’s recommendation fundamentally contradicts the municipality’s own procured legal opinion.
“The legal counsel explicitly warned that prescription does not automatically commence merely because an item appears on the UIFWE register.
“The advice strictly dictates that each item must be assessed individually to determine when the municipality had the necessary knowledge of the debtor.”
He said the Supreme Court of Appeal confirmed that the recovery of UIFWE was a mandatory statutory obligation.
“The administration is ignoring this precedent, effectively protecting negligent officials from personal financial liability.
“If the administration concedes that these debts have prescribed due to their failure to institute legal action within three years, this constitutes a massive failure to collect municipal revenue.
“Yet, this R23bn write-off request is accompanied by zero portfolios of evidence showing that consequence management has been instituted against the officials who negligently allowed the right of recovery to expire, as well as outlining what preventative measures have been established to prevent its recurrence.”
Mayor Babalwa Lobishe and ANC regional secretary Siphiwo Tshaka did not respond to a request for comment.
In a statement, DA councillor Gert Engelbrecht said his party had also written to the auditor-general and the National Treasury.
“From 2009 to 2021, the municipality lost R23bn to UIFWE,” Engelbrecht said.
“The most problematic issue is that the committee has not received the legally required Section 32 reports from the MFMA.
“Without these reports, the committee cannot see what the money was spent on or hold anyone to account.
“The DA requested that the matter be deferred to allow Mpac members sufficient time to examine the documentation, establish where the money was spent and determine who should be held accountable.
“The request was rejected and the matter was subsequently put to a vote and referred to council.
“We have therefore asked the auditor-general and the National Treasury to intervene and ensure this R23bn UIFWE matter is handled properly, with full oversight and accountability.
“This write-off cannot go to council, which sits on August 25, until the necessary oversight and investigative processes have been properly completed.
“The DA will not stand by while billions of rands of taxpayer money are potentially written off without proper investigation.”
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