Category Archives: Paddy Harper

City Press: Prove me wrong, Durbs. Nail them

http://m.news24.com/CityPress/Columnists/Prove-me-wrong-Durbs-Nail-them-20120512

Prove me wrong, Durbs. Nail them

by Paddy Harper

There’s a massive opportunity right now for the politicians and bureaucrats who run the city of Durban to do the right thing.

Mayor James Nxumalo, his executive committee, city manager S’bu Sithole and the councillors who make up the eThekwini council have an amazing chance to act decisively against those who have raided the city’s coffers and bent the rules to their own advantage for the past decade.

They were given this chance last year when KwaZulu-Natal Cooperative Governance MEC Nomusa Dube appointed the Manase forensic audit into abuse of city finances to the tune of R500 million in the 2009/10 financial year.

Dube brought in the external investigators to look at, among other things, abuse of emergency spending regulations by then city manager Mike Sutcliffe and his team.

They also probed allegations that councillors and their families had been illegally doing business with the city.

The intervention was sparked by a series of leaks to the media during a war of words between Sutcliffe and then mayor Obed Mlaba, which saw both being implicated in dodgy dealings and embarrassed the ruling party by having its dirty laundry being aired in public.

The right decision was taken for the wrong reason, but at least there was a chance to rid the city of some seriously bad people and practices.

After several months, a report with a series of recommendations was given to the city, which had 90 days to respond and outline a course of action.

It had six months to implement it. Things looked good.

The city had an opportunity – and a Constitutional obligation – to nail those fingered by Manase and clean up its systems to ensure that the kind of cronyism that took place could be prevented in future.

Then strange things started happening. Dube, Sithole and Nxumalo refused to make public Manase’s full report or even its edited findings. Councillors have still not seen the full report.

Both Dube and Sithole claimed the ban was to allow those fingered time to respond, but both have selectively quoted from its contents, naming Sutcliffe and other officials – but not the councillors – implicated.

The DA has gone to the courts to get access to the full report. The city has created an unnecessary – and costly – battle, which it will lose.

More ratepayers’ money will be flushed away simply because somebody wants to protect those accused of raping the city’s coffers. This is very strange logic.

Council then decided that it would mandate its executive committee and city manager to decide how to deal with Manase’s recommendations.

Councillors Stanley Xulu and Nondumiso Cele, both of whom Manase fingers for doing business with the city, sat in the exco meeting that took these decisions.

Nobody in council made any attempt for their recusal, despite their vested interest in the outcome of the behind closed doors meeting.

The exco decision was that the city’s ethics committee and speaker Logie Naidoo deal with allegations against councillors and Sithole those against officials.

The ethics committee hearings started weirdly. Evidential procedures were changed in what appears to be a clumsy bid to protect the 10 councillors, including Cele and Xulu.

Officials with a legal background led evidence at the initial hearings, but Sithole stepped in to order that evidence be led by councillors instead.

The hearings have been held in committee, with the media and the public barred from hearing which elected office bearers broke the rules to benefit themselves and their families.

This week Cele, Xulu and a third councillor were given a slap on the wrist in the form of fines, with no further sanction against them. The public has also been denied knowledge of what they did wrong.

In the case of Sutcliffe, the city has gone for the throat, despite his argument that every decision he took was in line with ANC policy – read: dictated by the eThekwini regional leadership – and reflected the wishes of the ruling party in council.

Sithole has publicly fingered Sutcliffe and has promised both criminal and civil action.

Two senior members of Sutcliffe’s team, procurement head Derek Naidoo and housing boss Cogi Pather, have been allowed to bow out through non-renewal of contracts rather than the city immediately suspending them, and taking criminal and civil action.

The city still has about a month to present its full programme to deal with the corruption, initiate action against those implicated and implement better corporate governance measures.

Sithole has been adamant he is following process. Nxumalo wants crooked councillors be given a second chance.

The city’s public actions on Manase thus far have done little to instil confidence that the political will is there to make sure that politicians, bureaucrats and the dodgy businesspeople who made money from them are held to account.

It really looks as though the city is going to let the chance to do the right thing slip away.

It would be really nice if Durban’s fathers and mothers were to prove me wrong.

Forensic audit of Sutcliffe, Mlaba et al

http://www.citypress.co.za/SouthAfrica/News/KZN-launches-probe-into-city-administration-20110317

KZN launches probe into city administration
2011-03-17 11:50

Paddy Harper

A wide-ranging forensic investigation into the embattled eThekwini Municipality after months of allegations of corruption and maladministration levelled against city manager Mike Sutcliffe, his administrative team and councillors, has been launched by KwaZulu-Natal’s Local Government Ministry.

The probe comes in the wake of a city appointed audit being suppressed by city officials and a damning auditor general’s report nailing Sutcliffe’s team for using emergency funding regulations to pay out more than R500 million in irregular expenditure for sub-standard low cost housing projects around the city.

Local government MEC Nomusa Dube said yesterday the earlier audits had provided prima facie evidence of maladministration and failure to abide by regulations around supply chain management and tender procedures and that her ministry had decided to step in and get to the bottom of the matter.

The new probe, which will be carried out by an experienced company of independent forensic auditors and would dovetail with separate investigations by the Special Investigation Unit (SIU) and other state agencies, would cover:

» Irregular expenditure caused by poor budget controls;

» Failure by city officials to follow supply chain management procedures around key infrastructure and housing projects;

» The failure of city official and councillors – including mayor Obed Mlaba – to disclose their financial interests;

Irregular tender procedures and awards;

» The illegal rental and sale of RDP houses;

» Irregularities in staff appointments and abuse of travel and other allowances;

» Fraudulent practices in the Durban Metropolitan Police; and

» Irregularities in the city’s development and planning department.

Dube said the probe would also take in any other information which came to light from the public and officials and said “serious steps’’ would be taken against any city official or councillor who refused to cooperate.

Earlier probes have been hampered by the refusal of key city officials to both cooperate and hand over documentation to investigators.

Dube said that while the city was “not collapsing’’ it was clear that “something wrong is taking place in the city’’.

She said when the probe was completed the city would be forced to take “decisive action and corrective measures’’.

Criminal charges would be laid against any official or councillor found guilty of corruption, fraud or maladministration, while civil action would be taken to recover city funds paid out illegally.She was unable to provide an exact timeframe for the probe to be completed, saying it would be retrospective and would “go as deep as it needs to go.”

– City Press

http://www.timeslive.co.za/local/article973466.ece/Mayor-and-city-boss-to-be-probed

Mayor and city boss to be probed
Mar 17, 2011 10:11 PM | By NIVASHNI NAIR

Durban mayor Obed Mlaba and city manager Mike Sutcliffe are to be investigated as part of a wider probe into alleged fraud and corruption in the eThekwini Municipality.

KwaZulu-Natal co-operative governance MEC Nomusa Dube said yesterday: “There is something wrong in this municipality and we believe that we need to investigate.

“We have been monitoring the latest developments in the municipality with keen interest and utmost concern.”

The ANC called on Dube to order a forensic investigation after the auditor-general found that the city had irregularly spent R535-million and the Ngubane audit implicated Sutcliffe and three officials in irregular housing contracts of R3.5-billion over the past 10 years.

Mlaba allegedly had shares in a company that nearly landed a R3-billion tender to convert the city’s waste to energy.

Dube said yesterday the investigation would cover:

*Irregular expenditure resulting from inadequate controls over the budget and payment processes;

*Non-disclosure of interests by councillors and officials;

*Irregularities in the awarding of contracts, payments and performance management of telecommunications;

*The alleged illegal rental and sale of RDP houses;

*Irregularities in travel and overtime allowances and appointment of staff; and

*Alleged fraudulent practices in the metro police.

The outcome of the investigation would compel the municipality to take decisive action and corrective measures and would lead to criminal and civil prosecutions if unlawful activities were unearthed, Dube said.

The forensic probe would begin immediately.

http://www.sowetanlive.co.za/news/2011/03/18/leave-no-stone-unturned

‘Leave no stone unturned’
18 Mar 2011 | Mhlaba Memela

KWAZULU-Natal MEC for cooperative governance and traditional affairs Nomusa Dube has appointed a forensic auditing firm to probe fraud, corruption and maladministration allegations in the eThekwini metro

Manase and Associates will lead an investigation into the affairs of the ANC-led municipality. This latest investigation will supersede all previous probes that were conducted into the affairs of the municipality.

The audit firm is tasked with unearthing any irregularities and maladministration concerning the awarding of tenders.

The municipality has hogged the headlines in the past few months following auditor-general Terrence Nombembe’s report indicating that R532million had been spent irregularly by the council.

Recently it also surfaced that mayor Obed Mlaba is part of a company that nearly landed a R3billion deal with the city to convert waste to energy.

The MEC said she had received representations and reports concerning allegations of maladministration, fraud and corruption.

“The documents include reports on an investigation requested by the accounting officer of the municipality undertaken by Ngubane and Company, the management letter of the auditor-general and an internal audit report,” Dube said.

She said it would appear from the findings of these reports that there is prima facie evidence of maladministration and a failure to comply with procedures and legislation.

“There is currently no evidence of any fraud and corruption,” Dube said. “The scope of these reports was, however, limited and it appeared to be additional areas of concern and further allegations, which have not been investigated.”

The forensic firm’s scope of investigation comprises allegations of illegal rentals and sale of RDP houses, non-disclosure of interests by councillors and officials, irregularities in the supply chain management in the awarding of tenders, payments and performance management in respect of telecommunications, human resource irregularities when recruiting, selecting and appointing staff.

Other allegations are the abuse of travel claims, overtime, allowances, development and planning offices, and non-compliance with street traders’ by-laws.

Dube said any other consequential matters that may arise will form part of the investigation.

“The eThekwini municipality still has a healthy balance,” she said.

Cosatu applauded Dube’s decision to institute a comprehensive forensic investigation into the affairs of the eThekwini municipality.

Secretary Zet Luzipho said the move is long overdue and appealed to Dube to “leave no stone unturned”.

http://www.iol.co.za/news/south-africa/kwazulu-natal/firm-to-probe-ethekwini-1.1043484

Firm to probe eThekwini

March 17 2011 at 09:38pm

A forensic auditing firm has been appointed to probe fraud, corruption and maladministration allegations in the eThekwini municipality, KwaZulu-Natal’s co-operative governance MEC said on Thursday.

“There is something wrong in the municipality and we believe there is a need to investigate,” Nomusa Dube told reporters in Durban.

The allegations relate to the awarding of tenders.

Auditor General Terrence Nombembe’s 2009/10 report indicated R532-million had been spent irregularly in the municipality, which runs the city of Durban.

The Mercury newspaper recently reported that mayor Obed Mlaba was part of a company that nearly landed a R3-billion deal with the city to convert waste to energy.

Dube said she had received representation and reports on claims of corruption, fraud and maladministration. Documents she received included a report following a probe by accountants Ngubane & Co, an eThekwini municipality internal report and the AG’s report.

“It would appear from the findings of these reports that there is prima facie evidence of maladministration and failure to comply with procedures and legislative provisions.

“In view of the seriousness of the allegations, we have deemed it appropriate to institute a forensic investigation.”

Dube however said the municipality would not be put under administration because it was not falling apart. “The municipality is not collapsing. It’s finances are okay.”

She invited whistle blowers to help the department get to the bottom of the problems. Dube said auditing firm Manase and Associates had been appointed to conduct the investigation, which would cover:

– Irregular expenditure resulting from inadequate budgetary controls, controls over payment processes and weak checks and balances.

– Non compliance with supply chain management policies for infrastructure and housing projects.

– Non disclosure of interests by councillors and officials.

– Irregularities in the awarding of contracts, payments and performance management of telecommunications.

– The illegal rental and sale of RDP houses.

– Abuse of overtime and travel allowances.

– Alleged fraudulent practices at the Durban metro police.- Sapa

City Press: Crackdown on leaky RDP deals proving to be costly

http://www.citypress.co.za/SouthAfrica/News/Crackdown-on-leaky-RDP-deals-proving-to-be-costly-20110305

Crackdown on leaky RDP deals proving to be costly
2011-03-06 10:15

Paddy Harper

KwaZulu-Natal’s human settlements ministry has cracked down on dodgy housing contractors, whose shoddy work on RDP houses is costing the province more than R1 billion in demolition and rebuilding costs.

At the same time, the Special Investigating Unit (SIU), has launched 13 investigations into a number of housing contractors and provincial and municipal officials over tender irregularities, corruption and other offences.

A number of the investigations are focused on tenders and contracts within the eThekwini Municipality, particularly contracts issued in terms of emergency funding regulations used to pay for housing projects.

This resulted in unauthorised expenditure of more than R500 million in the last financial year.

This week human settlements and public works MEC Maggie Govender ordered the demolition of 493 low-cost houses in Underberg. They were built by Ntokozweni Developers as part of a project to build 1 200 houses.

About 80% of the 27 000 RDP houses inspected by the department since last May will have to be demolished and rebuilt.

On Thursday Govender and Premier Zweli Mkhize met with contractors to outline the changed regulations.

In terms of the new policy:

»No contractor can hold more than four housing contracts at any time;
»Large housing projects are being broken down into smaller, more manageable phases involving more contractors;
»All new contracts will have definite time frames;
»No contractor will be paid until work is completed and ­inspected to the department’s satisfaction;
»No contractor will be allowed to “bank” tenders and take on work that can only be completed at a later stage; and
»Existing contracts will be ­reviewed and terminated if contractors are not performing.

“Since last May we have been putting systems in place to ensure improved delivery. Projects cannot take up to five years to complete because contractors have taken on more work than they can handle or where they are subcontracting to unregistered companies,’’ said Govender.

She said more cases would be opened in the SIU probe. Four staff members have already been arrested for fraud and have ­appeared in court.

The province has also drawn in bodies from the building, engineering and quantity surveying fields to act as an inspectorate on all state housing projects.

Dodgy contractors will be blacklisted and referred to the National Home Builders’ Registration Council for disciplinary action.

– City Press