Nelson Mandela Bay’s municipal public accounts committee has descended into a bitter showdown over a R23bn write-off of unauthorised, irregular, fruitless and wasteful expenditure (UIFWE).
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 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.
The metro has the highest UIFWE in the country, sitting at nearly R30bn and recently had its equitable share allocation for the 2026/2027 financial year temporarily withheld by the National Treasury.
The Treasury subsequently paid over R725,210 on July 31.
Ngoqo told councillors he had prepared an affidavit, which he still needed to sign, and intended using it to report matters to the police against people implicated in the UIFWE.
The legal opinion makes it clear that the municipality cannot simply assume that older UIFWE has prescribed.
Instead, it must assess each item individually to determine if it remains legally recoverable.
Under South Africa’s Prescription Act, legal claims and debts are subject to time limits.
If a creditor fails to take legal action within the prescribed period, the debt may become “prescribed”, meaning it is extinguished and can no longer be recovered through the courts.
Section 32(2) of the Municipal Finance Management Act (MFMA) requires a municipality to recover UIFWE from the person liable for it, unless a council committee has investigated the matter and council certifies the expenditure as irrecoverable and writes it off.
Writing off UIFWE does not absolve officials or political office-bearers from potential criminal or disciplinary consequences.
The amounts identified for write-off date from the 2009 financial year through to the 2021 financial year.
They include:
- 2009 — R16.04m;
- 2010 — R70.19m;
- 2011 — R159.61m;
- 2012 — R470.68m;
- 2013 — R567.37m;
- 2014 — R1.4bn;
- 2015 — R1.33bn;
- 2016 — R1.33bn;
- 2017 — R8.79bn;
- 2018 — R3.1bn;
- 2019 — R2.4bn;
- 2020 — R1.43bn; and
- 2021 — R1.98bn
According to the legal opinion from Joubert Galpin Searle, the municipality should not assume that all items placed on the UIFWE register by a particular date have prescribed.
“As Circular 68 [issued by the National Treasury on May 10 2013 and updated in April 2026] explains, prescription begins only once the municipality has sufficient factual knowledge to institute recovery proceedings, including the identity of the responsible person and the causal link to the UIFWE amount,” the legal opinion read.
“Each item must therefore be assessed individually.
“We therefore recommend, at least in relation to UIFWE, that the metro conduct an item-by-item prescription assessment, supported by the factual record for each UIFWE entry, to determine whether recovery remains legally enforceable or whether the debt has prescribed and is for that reason irrecoverable.
“The metro must place an item on the UIFWE register within five days of suspecting that the expenditure is UIFWE.
“Within 10 days of the entry of an item on the UIFWE register, the metro is obligated to prepare an incident report detailing all of the information giving rise to a cause of action in terms of Section 32 of the MFMA.
“We thus recommended to the metro that it regard all items of UIFWE on the UIFWE register up to June 30 2021 as being irrecoverable based on prescription.
“An item to Mpac recommending this course of action will need to be prepared.”
As Namette moved to adopt the report during a meeting on Thursday, councillors raised concerns that no Section 32 report had been presented to the committee, which was contradictory to their mandate.
Opposition councillors asked for more time to read the documents, including annexures from Ngoqo’s affidavit, which he said was about 500 pages.
However, Namette would not budge and maintained the meeting would go ahead.
“Here we’re criticised in the media that we’re not dealing with issues.”
ACDP councillor Lance Grootboom questioned whether Ngoqo was effectively saying the city had written off R23bn without Mpac conducting any investigation.
“That’s in contravention of the legal advice given because it says each item must be assessed individually,” Grootboom said.
“Are these items coming individually in the form of a Section 32 report?”
DA councillor Morne Steyn said the committee had not done a single thing about UIFWE in the last two years.
“Now, we’re sitting here in what is probably the final meeting before the council term ends.
“We asked before the beginning of this meeting to have regard for the rules to apply our minds.
“You’re 100% into pushing these items.
“It’s concerning.”
DA councillor Gert Engelbrecht said the DA was not opposed to writing off the amount but needed time to go through the documents presented.
“We’re not even given Section 32 reports, and how do you think the funds are written off?” he said.
“They need to come to Mpac for consequence management, for preventative measures.
“This is a stunt to put in front of the National Treasury so that the National Treasury can see we’ve written off R23bn, but we’re just shifting responsibility.
“We’re sitting with 17 years of corruption.
“I’m still on the point of why we’re not getting sufficient time to go through these documents.”
Responding to the councillors, Ngoqo said everything he had said and the legal opinion covered the Section 32 reports.
“It does indicate the amounts in those reports. It would be duplication. Here is a presentation, here’s a report.”
Engelbrecht said an external company had been appointed to do Mpac’s job and the committee was expected to rubber-stamp the report and send it to council.
“The National Treasury warned us against this, that Mpac should be sitting and going through reports.
“We need to go through these reports.
“As public representatives, we need to go through these to see who’s implicated.
“We can’t have officials be players and referees because why are we here as the watchdog of this municipality?”
DA councillor Werner Senekal said some officials had been with the municipality since 2009.
“We don’t know who those officials are because we’ve not been presented with a Section 32 report.
“Section 32 places that duty on us to go through those documents.
“We need to see the 500 pages, study them, go through them and do a thorough analysis and in good conscience, I cannot agree to this item, the way it’s been handled.
“There’s too much being left to chance.”
ANC councillor Xolani Notshe said it had been explained that should there be wrongdoing, it would be uncovered and investigated.
“The ANC supports that we take the item to council for council’s approval,” Notshe said.
“Also, for the acting city manager to continue opening a case, being mindful of the affidavit that has been prepared.”
After the meeting, the DA wrote to the auditor-general and the Treasury to request urgent intervention.
Follow The Herald WhatsApp channel today and stay connected to the stories shaping our world.
The Herald
