TCLM forensic report uncovers corruption
R95 090 687,37 of the irregular expenditure examined did not have any documentation, including the payment reports.
LYDENBURG – “Gross misconduct, grossly irregular and in a fraudulent manner.”
These are the words used to describe what was uncovered when a forensic audit implementation plan was presented to Thaba Chweu Local Municipality (TCLM). The newspaper obtained a copy of the implementation plan that was presented to council on March 29.
The full report has still not been released by TCLM. The plan exposes fraud and misconduct and several officials and various businesses are implicated. The investigation was done by Audit and Risk Management Solutions (ARMS) after a request by the Municipal Public Accounts Committee on July 14, 2017.
The municipality lost R201,2 million. R84,4 million in fruitless expenditure will need to be recovered. ARMS said payments made to certain companies should be recovered as they were made even though proper service for asset management was not rendered, making them fruitless, and disciplinary action should be considered against those officials involved.
Another company developed and disposed of stands but no money was received for the sale of the stands. A transfer of an erf has fraudulently carried out using a court order that has no basis in law. According to the valuation roll, 96 stands were transferred into private ownership and there is no evidence that money from the sales was paid to TCLM.
The appointment of a forensic and risk company in 2016 was irregular and payments of R840 000 must be recovered. R47 030 for the “maintenance” of minisubstations which were never completed and amounts signed off by two officials for incurring a wasteful expenditure of R3 522 490,24 and R286 141,66 should be recovered and investigated.
Six senior officials in TCLM also received back pay totalling R615 851 and R1 080 635,05 was also paid to three of the six officials. R42 236 565,11 of irregular expenditure was attributed to security companies appointed irregularly and without a valid reason. The report stated that in 2014/15 there was an unauthorised expenditure of R44 403 811,21. Depreciation and non-cash items comprised 57 per cent of the unauthorised expenditure.
The electricity consumption that exceeded the budget ceiling was 34 per cent of the unauthorised expenditure. An amount of R5 615 768, that was earmarked as a municipal infrastructure grant, was utilised for an unintended road project. ARMS could not identify the said project as it was unknown to any other officials.
R95 090 687,37 of the irregular expenditure examined did not have any documentation, including the payment reports. R1 145 772 was paid to suppliers not authorised by delegated officials. R176 185 915,91 was classified as irregular due to supply chain management policy not being complied with.
The refurbishment of Kerk and Viljoen streets was of poor quality. The municipality paid R5 710 411,17 for this project. The officials mentioned in this report have not been suspended pending this investigation and the outcome.
