Systemic issues in eThekwini's procurement and consequence management

Repeat findings in the eThekwini Audit and Risk Committee (ARC) report for the third quarter ended March 31, 2025, raised eyebrows during a council meeting on Thursday.

The ARC is an independent advisory body providing oversight and advice to the municipal council overseeing the organisation's financial reporting, internal control, and risk management processes.

The report stated that failure to address the repeated findings also renders the ARC ineffective. Some of the findings are as follows:

Persistent deficiencies in ensuring adequate and effective consequence management. There is a lack of oversight on non-financial misconduct matters. Also, there is a lack of implementation of recommendations of the City Integrity and Investigations Unit (CIIU). Procurement below R750,000, including splitting of orders, lack of evidence that the chief financial officer or his delegates approve deviations from the 7-day supplier self-service advert period.

The municipality was encouraged to fast-track filling of vacancies in the CIIU.

Dissatisfaction with the culture of not addressing findings by the Auditor-General and thus incurring repeat findings, including compliance management with the Wastewater Treatment Works undertaken without a valid licence, and consequence management, where it has been discovered that there are delays in concluding investigations, and no disciplinary action has been taken in certain instances.

With regards to the Durban Marine Theme Park, concerns were raised regarding cashflow challenges and non-finalisation of the feasibility options to determine a viable business model.

Reporting on the Inkosi Albert International Convention Centre, concerns were raised over the deteriorating financial position of the entity and the declining short-term investments. In response to the ARC, the municipality stated that should it become necessary, a task team comprising some of the eThekwini Executive Committee members will be established to focus on clearing the repeat findings. The municipality stated that the fourth quarter will reflect an improved picture.

Jay Singh, United Independent Movement (UIM) councillor, said the recurring audit failures in procurement, finances, and consequence management show systemic problems aren't being fixed urgently enough. He called for forensic audits of all irregular expenditure and monthly progress reports.

Singh said one cannot approve another plan while no officials face consequences for irregular spending, and infrastructure keeps failing.

“Until we see real accountability, these reports are just costly paperwork. The UIM insists on immediate, measurable improvements in consequence management. We cannot support business as usual while our city suffers,” he said.

Zwakele Mncwango, ActionSA eThekwini leader, hoped the report was taken seriously and that consequence management started to roll out.

Sunitha Maharaj, Minority Front councillor, said the steps management will be taking to address these concerns are key to keeping the city stable and providing essential services.

“Management was not responsive enough to the auditors' findings the first time round, nor was there political will shown to be responsive. We needed an independent body like the risk committee to remind management to act now and not later. Will be closely monitoring the commitment of the municipality on matters identified and the corrective measures to ensure correct billing of utilities and meaningful measures to address the water loss crisis,” Maharaj said.

Andre Beetge, DA councillor, was concerned about flaws in the Supply Chain Management processes.

“The entities cannot run at a deficit and are not sustainable. There will be no ICC or uShaka if the municipality does not assist them because there is no other method of sustaining them,” Beetge said.

Nkosenhle Madlala, ANC councillor, said interventions are in place to improve water and sanitation, and that the municipality is implementing a macro structure which will fill critical vacancies.

Patrick Pillay, leader of the Democratic Liberal Congress (DLC), was also concerned about water losses and called for the city manager to bring to account the officials responsible.

“It is unacceptable for us to continue to drag our feet in dealing with critical matters when it is brought to the attention of management and the Executive Committee. The key issues surround the inability to develop action plans that at times threaten the withdrawal of grant funding, inadequate performance management, procurement and contract management, and compliance management and consequence management are critical matters of note,” Pillay said.