R2,7 MILLION in irregular expenditure caused by non-compliance with Supply Chain Management regulations.
The report before council today ignores that this is the second and related write-off in two Financial Years – R12,3 million was written off in the previous Financial Year and R2,7 million now, totalling R15,069 million, and only on Customs House expansion alone.
Over and above that, R9,8 million was paid to FPT for the Naspers site. This money was spent prior to the tender going out and while no agreement was in place – meaning that the tender process was rigged – by Members of the CTICC Board.
• The FPT designed the tender specifications and then won the tender.
• The City’s Forensic report regards this as fruitless and wasteful expenditure – meaning Fraud.
The report before council today is also misleading:
• Page 237 – E (v) – the Forensic report recommended cancellation of the tender, it did not merely “suggest” it. This recommendation was ignored.
• E (viii) – It is obviously misleading and utter nonsense to assert that the Forensic report is only final once tested in a court of law. It is administratively unfair (legally) and it is contrary to PAJA. Anyway, the CTICC’s Accountants tested the report, so did the Auditor-General. And the Public Protector is doing so now, so will the Hawks.
• Either the report was final, which was asserted by the Chairman of the CTICC Board, by ENS their Lawyers (I am informed) and the City’s author of the report, OR it was a draft report.
• If it was a draft report, then more than R800 million worth of decisions were made and executed based on a draft report with draft findings – that is administrative recklessness that cannot be condoned – and against the MFMA and PAJA. In so doing, council itself and the public was mislead.
• Page 238 – J (iii) – This conclusion is also misleading. How can it NOT be negligent to NOT formalise SCM processes? SCM processes indeed are formalised and have been for the duration of the life of the CTICC. Further, the title of the report speaks the condonation of non-compliance of SCM regulations. The City’s forensic report confirms that SCM Regulation 50 (1) and (3) were breached, among many other breaches.
• J (vii) – is also misleading in that it is not just the Accounting Officer responsible for the failure in controls – at least 3 CTICC Executives were found to be responsible for breaching SCM controls and for the failure of these controls. These Execs continue to earn over R1m per year before bonuses.
The ACDP is of the view that the Board members on the Expansion Committee should be removed, in fact fired for their role.
The ACDP records its vote against the recommendations