Urgent intervention needed as KwaDukuza Municipality warns of potential loss of grant funding

Tens, if not hundreds of millions of rands in disaster grant funding are at risk of being lost in KwaDukuza.

This was the message delivered to the KwaDukuza Municipality (KDM) council last week during an update on the municipality’s 435 grant funded projects.

KDM has received three separate grants to help with infrastructure repair following the 2022 floods, totalling R109-million, R1.27-billion and R22-million respectively.

As of February 16, almost R732-million had been spent, with the remaining R670-million needing to be spent by the end of the current financial year in June.

An application to roll over unspent funds from the 2022/23 financial year into the 2023/24 budget was previously approved by Treasury.

“Council should note there is a high risk for the municipality being instructed to return or surrender unspent funding by end-June 2024 as there is no legal basis to roll over funds more than once,” reads the council item prepared by Community Services executive director, Siyabonga Khanyile.

There have been a number of issues that have contributed to the grant underspend to date.

The presentation to council cited business forum pressure, unexpectedly complex constructions, weather damage, poor workmanship and a lack of internal control measures.

Widespread vacancies in the relevant departments have also previously been identified as a concern.

This aside from many aspects of the tender award process being mired in controversy. Just two weeks ago, the Attorney General’s office returned a query made by ActionSA councillor, Nel Sewraj, in May last year.

Sewraj wrote to the AG’s office asking for an audit on a pre-approved panel of 25 contractors which were to be used for road repair contracts, citing concerns about the appointment process.

The AG’s office undertook a regularity audit which identified conflicts of interest, non-compliance with supply chain management processes, fraud risk factors and a lack of control on rotation of the panel.

All of the findings were shared with the municipality, but it is not clear what consequence management was undertaken, if any.

KDM did not respond to queries from the Courier to that effect.

Nevertheless, the fact remains that more than half a billion rands worth of tenders and contracts will need to be assigned and completed over the next four months.

The solutions put forward by the Community Services unit include a ten point plan headlined by a push to have all remaining tenders awarded before the end of March.

The unit must also “introduce and insist on a strong internal control environment with practical and routinely executed activities that will prevent financial losses, wastage, transgression and significantly improve the accountability ecosystem.”

Whether these 11th hour interventions will be enough to prevent huge grant losses remains to be seen.

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