She said the term ‘fruitless and wasteful expenditure’ refers to money that was spent in vain and which could have been avoided if reasonable care was taken.
Bushbuckridge mayor Sylvia Nxumalo has defended her municipality’s decision to write off more than R180 million of irregular and unauthorised expenditure, saying in other instances it was pure technical errors.
She said fruitless expenditure doesn’t really mean that the money was stolen.
She said a difference between fruitless, irregular, unauthorised, wasteful expenditures exists.
Nxumalo said it was for this reason that the council had to write off certain amounts of money.
She said the term ‘irregular expenditure’ means that the expenditure “was not incurred in the manner prescribed by legislation”.
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Nxumalo said unlike investing money into VBS, which they never did, fruitless and wasteful expenditures “refers to expenditure that was made in vain and could have been avoided had reasonable care been taken”.
“Such expenditures include interest, legal or litigation costs,” she said, adding that the costs they incurred with Rand Water occurred while they were in the process of taking Rand Water out of the municipality.
“We will remember that the municipality was involved in a protracted legal wrangle with Rand Water in which the municipality could not agree with Rand Water billing statements. While discussing the Rand Water billing, interest was charged by Rand Water,” said Nxumalo.
She also said this money, which is money “charged against the municipality after legal cases were finalised” had to be written off.
DA councillor Khunjulwa Pilane said the R182 million in irregular, unauthorised, fruitless and wasteful expenditure for the financial years 2014/15, 2015/16, 2016/17, 2017/18 and 2018/19 that was written off on the first week of August 2020 was the municipality’s attempt to get a clean audit.
“Their reason given for writing off the amounts below was that they wanted to get a clean audit outcome,” Pilane said.
R330 000 of fruitless and wasteful expenditure for the 2015/16 financial year, R27 million of fruitless and wasteful expenditure for the 2016/17 financial year, R72 million of irregular expenditure incurred for the 2016/17 financial year, R45 million of unauthorised expenditure for the 2017/18 financial year, R14 million and R22 million of fruitless and wasteful expenditure incurred for the 2018/19 financial year.
Pilane said on top of that amount the municipality was also planning to write off R64 million worth of interest that had been generated on overdue accounts over the past financial years.
“Money which the municipality could have used for the delivery of services,” he said. “Writing off millions to get a clean audit outcome is similar to fraud,” Pilane said.
But the mayor is calling on the public to not worry as this process is to ensure they are “spot-on in efficiency concerning service delivery within our municipality”.
“It’s been minor hitches, but that’s all in the past,” Nxumalo said.
She said it’s similar with costs incurred with Eskom, where Eskom would charge them interests for invoices not paid within 30 days.
“After the 15th day without payment, interests are charged while National Treasury says we need to pay our clients within 30 days,” she said.
She said the other fruitless expenditure came from employee related costs.
Nxumalo said a technicality related to salary adjustments led to problems in the payroll system and government’s financial management system incurring R45.1 million.
“There was a management oversight in considering the special budget adjustment before the end of the financial year 2017/18,” she said.
Nxumalo said these issues are investigated by the Municipal Public Account Committee (MPAC) and all their reports are on the municipal website.
“As the mayor, together with my mayoral committee, we also continue giving feedback to the community of Bushbuckridge through mayoral imbizos.
“Our newsletter also on a quarterly basis, reports and gives feedback on all projects implemented by the municipality,” she said.
(edited by MLM)
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