Former Cape Town City manager Wallace Mgoqi could face a bill of almost R9-million over alleged irregular spending he authorised on a jewellery city project.
He could also face criminal charges, mayoral committee member for finance Ian Nielson told a media briefing on Tuesday.
Nielson said that following a forensic audit and advice from a senior counsel, disciplinary hearings were initiated on Monday against the head of the city’s executive management unit, Mthuthulezi Swartz, who approved payments that were then authorised by Mgoqi.
He said the audit and the advocate found that Mqoqi’s appointment of TOM Consulting (TOM) as project managers for an African Jewellery City project planned for Cape Town’s waterfront was ”fundamentally flawed”.
They found that the resulting payment of R8,5-million to TOM, which is headed by former South African Local Government Association chairperson Thabo Mokwena, plus additional advertising costs of at least R127 000, were unauthorised, irregular and fruitless or wasteful spending.
They also found that the city was obliged under the Municipal Finance Management Act to recover the money concerned from Mgoqi.
Nielson said the council would, however, wait for the outcome of Swartz’s hearing before deciding on any further action.
Swartz has been suspended on full pay. His hearing is scheduled to start on September 13.
Nielson’s announcement is the latest round in a series of spats between the city’s new Democratic Alliance-led administration and its African National Congress predecessor, many of them over shaky contracts.
Mgoqi was appointed by the ANC, and when the DA and its allies came to power in March this year, he sought to cling to power through an irregular last-minute extension of his lucrative contract.
Nielson said that according to the minutes of a March 2005 mayoral committee meeting, the committee ”approved and endorsed” the concept of establishing a jewellery city, and resolved that the viability of a waterfront site be investigated.
It did not appoint Mokwena ”or anything else”. It would seem that Mgoqi then appointed TOM without any tender procedure.
This was totally contrary to the city’s procurement policy at the time, under which Mgoqi was authorised to approve contracts of up to R350 000.
According to the auditors, the work done by TOM was worth at most R1,5-million, and he himself would be very surprised if it was worth more than a million.
He said the city’s audit team had been in close contact with the Scorpions for several months on the issue, and that the city’s own investigations will soon be handed over to ”the appropriate authorities”.
He said the city is able to probe merely whether payments were regular or not, and did not have the capacity to determine whether there had been corruption.
It was too early to make any decision on the future of the jewellery project itself. This will be decided only after a number of appeals by other tenderers had been heard. — Sapa