/ 18 February 2023

Auditor General red flags eThekwini as city falters

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This stinks: An auditor general’s report on the state of the city of eThekwini’s finances found the city’s leadership unwilling or unable to maintain sewage plants, among other failings. Photo: Deon Raath/Gallo Images

Corruption, political infighting and a failure by the city leadership to enforce consequence management — and implement corrective rulings by state agencies — are threatening eThekwini’s future financial viability and its ability to deliver basic services to its 3.77 million residents.

The ANC’s eThekwini region, which governs the city via a coalition with the Economic Freedom Fighters, the National Freedom Party (NFP) and other smaller parties, moved this week to stabilise the city politically and end several months of no-confidence motions and collapsed council meetings.

The appointment of NFP and EFF councillors to chair city committees is aimed at bringing some level of normality to eThekwini after failed attempts by the Democratic Alliance and the Inkatha Freedom Party to remove mayor Mxolisi Kaunda earlier this month.

Kaunda was brought in by the ANC to replace Zandile Gumede in 2018 after she was recalled by the party over her arrest on corruption charges but the decision failed to stop it from losing its majority in the city in the November 2021 local government elections.

Kaunda has struggled since, with the ANC in the province beginning to talk about placing the city under section 139 administration due to the governance failures; interference in tender processes and the water and sewerage crisis.

On Wednesday, the ANC eThekwini region reconfigured the city’s municipal committees to give chairperson positions to the EFF’s Thabani Miya and deputy mayor Zandile Myeni of the NFP.

Both parties backed Kaunda in a vote of no confidence against him earlier this month, with Myeni being elected by the ANC-NFP-EFF coalition to replace ousted deputy mayor Philani Mavundla.

ANC regional secretary Musa Nciki said they had done so to “ensure co-operation of all political parties in the interests of service delivery” and to “sharpen and strengthen our service delivery machinery”.

The move might stabilise eThekwini politically but a scathing report by the auditor general on the state of the city’s finances paints a picture of a leadership unable — and unwilling — to deal with irregular expenditure; perform routine maintenance on sewerage plants and other city assets and roll out infrastructure.

In the report, released at the end of last month, auditor general representative Vanuja Maharaj said the city had incurred R1.5 billion in irregular expenditure, an increase from the previous year, with the bulk of this caused to follow supply-chain management procedures.

Irregular expenditure had increased over the past three years, while earlier instructions from the auditor general around consequence management; financial management and the implementation of supply-chain management procedures had been ignored. “Reasonable steps were not taken to ensure that the municipality implements and maintains an effective system of expenditure control, including procedures for the approval or authorisation and payment of funds for expenditure to the expanded public works programme and presidential employment programme,” the auditor general found.

The city failed to recover any of the R1.5 billion it had spent irregularly — it had not attempted to do so — and had continued to fail to implement disciplinary or criminal proceedings against staff and managers implicated in financial irregularities by independent investigations.

eThekwini had regressed in terms of procurement and contract management, and in maintenance and repairs, had spent only 6.59% of its budget on maintaining assets and 5.14% on capital expenditure.

More than 56% of the water purchased by the city was lost and did not make it to consumers, partially as a result of the low maintenance and repair spending by the city.

“The unfavourable expenditure on repairs and maintenance and capital expenditure has negatively impacted infrastructure as indicated by the increased water losses,” Maharaj said.

Maharaj said the continuation of the current trends “could be dire for the consumer and municipality with a likely increased tariff and consequently lower debtor recovery rates”.

She said the impact of water-shedding, caused by the further deterioration of the city’s infrastructure, on residents, business and the economy “could be devastating”.

eThekwini had operated its Kingsburg, Isipingo and Mpumalanga waste-water treatment works without valid operating licences, while the northern waste-water treatment works had not been maintained to prevent it from malfunctioning.

The state of the city’s sewerage works, many of which were damaged in the floods last April, has brought eThekwini into conflict with the province’s economic development and tourism ministry, headed by ANC provincial chairperson Siboniso Duma.

The department has laid charges against city manager Musa Mbhele, his predecessor Sipho Cele and Ednick Mtsweli, eThekwini’s head of water and sanitation, over a number of sewage spills since last year.

Department spokesperson Angel Sibisi said charges had been laid with the police over violations of the National Environmental Management Act involving the city’s sewage pump station at the Isipingo lagoon, Winkelspruit and at Eiderwood, near Phoenix, on the Ohlange River.

Sibisi said the investigations had been finalised after statements were obtained from witnesses and city officials and samples containing high levels of E. coli bacteria had been collected and tested at all three sites.

“The dockets were handed over to the National Prosecuting Authority (NPA) on 22 December 2022 for a decision. The department is currently waiting for a decision from the NPA as to whether they would prosecute or not,” Sibisi said.

A court application by ActionSA to force the city to fix the pump stations and halt the pollution of the rivers and beaches, in which the KZN department of economic development, tourism and environmental affairs and several other government departments are co-respondents, is set to be heard on 27 February.

The city did not respond to questions from Mail & Guardian regarding the auditor general’s report and the pollution charges.

Earlier this month, Kaunda and Mbhele said the city was implementing “appropriate plans” to address consequence management, contract management and performance information.

They also undertook to recover irregular expenditure and put measures in place to prevent further financial losses in the future.

Kaunda said on Wednesday that the city would increase its maintenance budget to 8% of revenue in order to improve the upkeep of the sewerage, water, roads and electricity networks.