A bid to write off R656m in legal fees dating back to 2017 was rejected by councillors on Tuesday as the Nelson Mandela Bay municipality failed to provide the documents needed to justify the spending, with the information provided showing inaccuracies.
The municipal public accounts committee also rejected a proposal to write off R42.7m in costs for geographic information software, calling the report incomplete.
Councillors said both reports lacked the evidence required to explain deviations, the reasons for external legal counsel and whether successive city managers had tabled the necessary municipal manager resolutions properly for the council’s approval.
Acting chief operating officer Nkosana Dunjana said some of the documents would be impossible to recover as some officials involved were either dead or had left the municipality.
Councillors criticised the quality of the reports, saying they were marred by inaccuracies and basic errors, and questioned how the items on unauthorised, irregular, fruitless and wasteful expenditure (UIFW) had cleared both the city’s UIFW specialist and acting city manager Lonwabo Ngoqo.
Several members accused Ngoqo of failing to take the committee’s work seriously.
Ngoqo was appointed acting city manager in September.
According to the report presented during the meeting, various historical deviations in terms of Section 36 of the supply chain management policy were approved by various acting city managers between July 2021 and November 2022.
These were for municipal manager resolutions 3660, 3323 and 3465.
The UIFW was first discovered in 2017.
The report said the municipality breached Section 78(1)(c), which requires senior managers and officials responsible for financial management to take all reasonable steps to prevent unauthorised, irregular or fruitless and wasteful expenditure, as well as any related losses.
The tender that ultimately racked up R656m in legal fees was first awarded on April 17 2015, for 36 months, with 32 service providers appointed to a panel of legal firms.
Work was assigned on an as-needed basis, and once the contract expired the city relied on a series of deviations, issuing month-to-month extensions and, at times, six-month contracts.
Dunjana said a new panel was appointed in January 2024 and that the city had learnt from its past errors, adding that the next tender would be advertised well before the current contract expired.
He asked councillors to approve the R656m write-off.
The city’s legal panel has long faced criticism, with the 2023/2024 auditor-general’s report highlighting several alleged irregularities in the appointment of the 18-member panel.
Mayibuye Civic Movement founder and former DOP councillor Tukela Zumani said that out of 18 firms on the panel, 82.6% of legal services work went to the same three firms.
During the 2022/2023 financial year, the metro reportedly spent R70m on legal bills, with R57m going to the three law firms.
This means the city has barely made a dent in the R30bn UIFW that the National Treasury instructed the metro to clear before it is allocated its December tranche of the equitable share.
DA councillor Marshall von Buchenroder questioned why deviations from 2018 were being brought to the committee now.
“Why did it take so long for officials to bring this item?
“I’m not happy. It’s devious.
“Some of these items are not complete and I feel they should be sent back.”
DA councillor Gert Engelbrecht questioned why the city continued for years with the wrong approach to hiring service providers.
“I don’t understand how we can go for 10 years and not correct it after a year or two.
“I want to see the process of shortlisting these companies.
“It’s clear to see some of these firms are blatantly abusing us if you see how much they’re charging.
“I suggest the item be deferred.”
DA councillor Werner Senekal asked how long it took for a city manager’s deviation to be submitted to the council.
“The council needs to record the deviation.
“Were these deviations available at the time, and where are the minutes to point out that the council accepted the deviations?
“We know where [former city manager Mzwakhe] Clay works. He works for Cogta.
“We know where [former municipal manager Johann] Mettler works. People must account.”
ANC councillor Xola Notshe said the committee appreciated corrective measures being taken.
“We find ourselves number one in UIFW in SA.
“We appeal to everyone in this chamber that contracts must be in place so that we remove ourselves from this position we don’t want to occupy.
“As the ANC, we are pleased with the movement in the right direction.
“Let the missing information be provided, and immediately, when available, the item be recommended to the council.”
ACDP councillor Lance Grootboom said the report lacked details on why deviations were necessary.
“There’s no information to tell us why the city needed to deviate.
“Why was it necessary?
“We have to be mindful that Section 35 of the supply chain policy allows for emergencies, but the report does not say so.
“Deviations are in case of emergencies but we’re not told what that emergency was.”
Responding to councillors, Dunjana said he appreciated the feedback.
“The documents come from a long time ago.
“Some of the people involved in the process have passed on.
“It is difficult to get some of the documentation.
“I hear what Grootboom is saying about why we had to deviate, but we weren’t there when the decisions were made.
“We struggled to put together this item because the information is not here.
“The little we put together required a lot of files.
“We request the committee to do the write-off because we might not be able to get the documents required.”
Ngoqo told councillors the documents being discussed dated as far back as 2015.
“We’re talking about a tender for 2015, which should’ve ended in 2018, then we’re sitting in 2025.
“If councillors are not satisfied, having these questions and whether it is necessary to deviate, it is prudent and clear that there was no tender in 2018.
“In preparing these reports, you don’t anticipate what questions will be asked of you.
“We do have a disciplinary board, and if you want an investigation into that matter, that can happen.”
On the R42m write-off proposal, Dunjana emphasised that Esri SA was the only company able to provide the geographic information system.
However, Notshe said the explanation of why the city had to deviate did not assist the metro.
“How is that response meant to assist the committee?
“How will that sentence assist the committee in making a decision?
“If documents are not available, it must be stated as such.”
Grootboom said the city had appointed a UIFW specialist and questioned how the reports bypassed the official.
“We need to know what happens when these items come here, how they are screened.
Mpac chair Luxolo Namette said a workshop had been organised for officials on how to draft reports.
“But it seems as if that workshop was just a waste of money and resources.”
Ngoqo admitted his office had been lax but promised stricter review, saying the UIFW specialist would thoroughly screen reports before they reached the committee.
The Herald
