Latest news with #R53-million
Daily Maverick
5 days ago
- Business
- Daily Maverick
Nelson Mandela Bay mayor accused of ‘financial misconduct' over funding rollover for flood disaster projects
The ANC-led coalition government in Nelson Mandela Bay on Thursday rammed through the approval of a 'top up' from city coffers to fund flood disaster projects that were intended to be financed by a R53-million conditional grant. While the Nelson Mandela Bay metro remains at high risk of losing R53-million in flood disaster funding for Kariega, Executive Mayor Babalwa Lobishe on Wednesday urged council to approve that a top-up amount be paid from city coffers to fund the shortfall in the projects. According to council documents, the metro has spent R1.6-million of the proposed R52.3-million so far — and the mayor wants R7-million from the Roads and Stormwater budget to be reprioritised for flood projects as a 'top up'. Democratic Alliance councillor Rano Kayser pointed out to the mayor that the rollover for the funding had not yet been approved by the National Treasury. He cited a Treasury circular stating that rollovers would not be granted in cases where key positions such as city manager and chief financial officer (CFO) have been vacant for more than six months — or where CFOs have been serving in acting roles beyond that period. Kayser said the city failed to spend the money in time. 'The Acting City Manager gave us the assurance that the money will be spent,' Kayser said. 'He even boldly said he visited Kariega, but after all these visits he still failed to spend the R53-million.' In June 2024, Kariega was hit by devastating flash-flooding after a cloud burst dumped 230mm of rain in the area in less than two hours. In October, heavy rains in the metro again damaged parts of Kariega and Gqeberha. But as it was a conditional grant, there was a limited time during which the money could be spent. The metro did not spend the money in time and now has to apply for a rollover of funds. In a letter addressed to Lobishe, Kayser pointed out that the metro must apply for a rollover of the funds by 31 August and a decision in this regard will only be made by 22 October. He said despite no application for a rollover being made by the metro, Lobishe has now asked the metro to approve a 'top-up' budget to be paid from the metro's budget. This, Kayser pointed out in his letter, was 'financial misconduct. This item illustrates the failure and incompetence of the administration. The item is misleading to the council.' He stressed in council that no rollover of the funding had been approved. On its social media pages, the metro claimed the council approved the rollover of funding, but added that this must still be approved by National Treasury. 'I wrote to the executive mayor tabling the allegations of misconduct,' Kayser added. 'She has 7 days to bring the item to council. It has all the elements of misconduct.' He said the metro, through its failure to spend the money, had lost R53-million. 'It may be in the bank account, but it cannot be used. For every project relating to the floods the money has been lost.' The ACDP's Lance Grootboom agreed. 'This is conditional funding. You must apply to the National Treasury for a rollover first,' he said. He pointed out that Treasury was clear in a circular that no rollover requests will be considered where a municipality has a vacant CFO post or had a CFO in an acting position for more than six months. Added to the risk, Grootboom pointed out, is that the metro's city manager has been on suspension (since 2023). 'It is basically an illegal request,' he said. 'You want the metro to top up the money, but you will only get an answer [later].' He later said the issue would have to be addressed by the Standing Committee on Public Accounts. The metro has a pattern of underspending grant funding from National Treasury and has in the past three years lost millions. The MMC for Budget and Treasury Khanya Ngqisha said the opposition was telling the metro not to spend the money. 'We have an accounting officer. He doesn't take decisions without advice. The problem is that some of the political parties listen to wrong advice from junior officials.' He admitted that no money was spent yet. 'If there is anything wrong, the Auditor-General will deal with it.' Acting City Manager Ted Pillay said Lobishe's request should be amended to indicate a budget adjustment instead of a rollover. This was then approved by the council. However, Lobishe then later, after voting, said she didn't want the changes proposed by Pillay. 'He had no right to correct my item. I didn't fix it myself.' A second decision, this time based on the original, unamended item, was then passed — despite objections from opposition councillors, who argued this violated council procedures. They said the proper route was for the Speaker to take the item on review. DM
Daily Maverick
06-06-2025
- Politics
- Daily Maverick
Nelson Mandela Bay councillors demand answers about spending of flood disaster grants
Councillors have accused Nelson Mandela Bay's acting city manager of dodging questions about the municipality's spending of flood disaster grants. In a rare moment of unity, councillors from across the political spectrum agreed that they were unable to get proper answers over Nelson Mandela Bay's use of two flood disaster grants to repair infrastructure in Kariega. On 1 June 2024, a cloudburst in Kariega led to flooding that caused the deaths of at least 10 people and destroyed two vital bridges and several roads, while more than 1,000 people were displaced. The metro received two tranches of disaster grants after the floods to start repairing infrastructure damage estimated at R1-billion. The first tranche was for R53-million and the second for R89-million. DA councillor Johnny Faltein, seconded by councillor Franay van de Linde, this week sought clarity over the state of repairs specifically for the two canals in Kariega that are supposed to function as flood mitigation measures, but which have fallen into disrepair. Both councillors said they were very worried as three days of heavy rain are predicted for Nelson Mandela Bay next week. The South African Weather Service has issued a Level 2 flood warning. Van de Linde said she was upset when she heard at a recent meeting of the Budget and Treasury Directorate that there was no money for the repair of the canals. The leader of the DA in Nelson Mandela Bay, Rano Kayser, accused acting city manager Ted Pillay of misleading the council and asked for answers. Kayser said that as the metro was now at the end of its financial year, there was a good chance that the city would lose the R53-million grant funding due to underspending. 'But are we at risk of losing the other R89-million funding as well? There are no contractors on site,' he said. The ANC's councillor Bongani Mani said they were hearing 'scary things' about the disaster funding. 'Acting City Manager, are you confident that this will not result in egg on our faces?' he asked. 'We want it on record.' He said he was tired of receiving the 'same boring answers' about the spending of the grants. Pillay said a decision had been made to reduce the four projects that were originally planned to two. 'Only two can be implemented. We have to find funding for the other two,' he said. This included the repair work on the canals. The R53-million for the repair of roads was awarded to different companies than those which had won a triennial contract for this work. 'This will result in irregular expenditure,' Pillay said, adding that the municipality's public accounts committee would have to sort it out. However, he insisted that work on the two bridges was progressing. Kayser countered that the information he had received from the city's Budget and Treasury Department was that the contractors had been appointed illegally, as the council had not supplied the correct supporting documentation with its decision. DM
