Red tape stalls Nelson Mandela Bay’s R30bn irregular spending inquiry

Nelson Mandela Bay has one of the highest irregular expenditure records of any municipality in South Africa – yet this year, not a single meeting has been held to investigate it.

Instead, three meetings were cancelled because senior managers did not submit eight outstanding reports required under Section 32 of the Municipal Finance Management Act – the legal mechanism that compels officials to account for irregular spending.

The City’s Municipal Public Accounts Committee has not interrogated a single irregular expenditure report since December 2025, despite warnings from the National Treasury that continued failures could jeopardise portions of its grant funding.

The metro had been instructed to hold two meetings per month to deal with the irregular expenditure while strengthening its financial controls by curbing evergreen contracts and deviations, among other measures.

Now, Municipal Public Accounts Committee chairperson Luxolo Namette is preparing a motion to council to address the missed meetings and delays in submitting reports.

The most recent meeting, scheduled for Tuesday 2 June, was cancelled at the last minute because the reports had still not been submitted.

Namette wrote to councillors informing them about the failed meetings due to the delayed submission of reports. He reminded councillors that at a 9 December 2025 Municipal Public Accounts Committee meeting, former acting city manager Lonwabo Ngoqo committed to ensuring the reports were submitted to his office for compliance checks before being sent to the secretariat for distribution.

“The office waited in vain, with the secretariat reporting that there were no reports that had been referred to their office from the city manager’s office, as per the resolution.

“An email was written to the city manager, early in April 2026, alerting him that the meeting of 7 April was unlikely to sit due to no reports [being] submitted to the secretariat, seeking clarity on the cause of the delay. There was no response to this email.”

Namette indicated that after establishing from the secretariat that no reports had been submitted by 9 April, his office wrote to the city manager’s office for an explanation.

Again, there was no response.

“On 26 May another email was written to the city manager registering the frustration they are putting the office under due to non-submission of reports to the secretariat, despite committing to do so in the meeting of December 2025,” he wrote.

When Namette finally met with the acting city manager on 28 May, he says he discovered that eight reports had been sitting idle across various departments, waiting for final vetting by a technical committee before they could be submitted to the Municipal Public Accounts Committee.

“As of 1 June, those reports were declared ready for interrogation at the Municipal Public Accounts Committee, but they were late for the scheduled meeting of 2 June. I am writing to you to appeal that we meet on Monday, 15 June 2026, to interrogate those reports as it is the only available date for the council chambers.

“I understand that it will be the first day of recess and councillors already have plans, especially it being the eve of June 16, but I am appealing to you to consider this request.”

ACDP councillor Lance Grootboom said the lack of Municipal Public Accounts Committee meetings was problematic.

“The last time we convened to deal with Unlawful, Irregular, Fruitless and Wasteful Expenditure (UIFWE) was in December. For a municipality with R30-billion in UIFWE that is unacceptable.

“We need the reports that will explain how we got to this figure, but the executive directors are not sending these reports; we can’t sit for six months without dealing with the highest UIFWE in the country.”

Grootboom said he was concerned that the National Treasury would effectively hold the transfer of a portion of funds, which would severely affect the municipality.

“The Treasury has said if we do not write off a certain amount of the Unlawful, Irregular, Fruitless and Wasteful Expenditure and investigate it our funds will be withheld. The administration is not sending the items to the secretariat for them to compile an agenda so we can convene a meeting. It’s either the directors don’t know how to do the work, or they are simply ignoring it.”

Grootboom said the acting city manager and mayor Babalwa Lobishe must hold accountable whoever was responsible for delaying the reports.

In April when National Treasury officials visited the metro they doubled down on the December threat to withhold grant funding after the City failed to respond and address 10 actions plans as instructed, and to submit related documents.

The initial threat was due to the city’s failure to deal with the Unlawful, Irregular, Fruitless and Wasteful Expenditure and implement consequence management.

DA councillor Gert Engelbrecht said he got a call last week from one of the officials informing him that the meeting of 2 June had been called off because there were no agenda items.

“I said that was impossible because as of the council [meeting] of 30 April we recommended to recover funds from an official in the Office of the Speaker and the item was referred back to the Municipal Public Accounts Committee, and we also have consequence management items that need to be dealt with. The official said he did not receive anything from the Speaker’s office.”

Engelbrecht said he wrote to Speaker Eugene Johnson, who noted his email but had yet to formally respond.

“This year we have only dealt with the letter from the National Treasury and the annual report, so it would not be surprising if they withheld some funds. We have not tabled a single Unlawful, Irregular, Fruitless and Wasteful Expenditure meeting this year and there’s no urgency from the officials and the Speaker’s office to get items onto the Municipal Public Accounts Committee agenda.

Explaining the delays, current Acting City Manager Charity Sihunu said the metro recently participated in mid-year assessment engagements with the National Treasury, during which the role of the Disciplinary Board in the Section 32 process of the Municipal Finance Management Act was discussed and clarified.

Sihunu indicated that upon receipt of the section 32 reports from senior managers, they were referred to the Disciplinary Board for a due diligence review.

“The board’s role is to verify the accuracy, completeness and procedural compliance of the information contained in the reports. This process is undertaken to ensure that oversight structures receive reports that are credible, factually sound and capable of withstanding the necessary governance and accountability scrutiny,” she said.

The metro established a technical committee responsible for assessing, verifying and quality-assuring all section 32 reports before submission to the Municipal Public Accounts Committee.

“These measures reflect the municipality’s commitment to sound governance, strengthened accountability, legislative compliance and robust oversight by council’s governance structures,” stated Sihunu.

Speaking on Wednesday, 3 June, Namette said the postponement of the three meetings had raised serious concerns about the effectiveness of municipal oversight and the timely management of public funds.

“The first delay relates to meetings originally scheduled for 7 and 16 April, which were subsequently postponed to 2 June. However, the rescheduled meeting on 2 June was also cancelled. This second postponement was attributed also to the failure of several directorates to submit the necessary reports to the acting city manager in time. These reports are essential for tabling before the Municipal Public Accounts Committee, enabling the committee to carry out its investigative and oversight responsibilities.”

Nametter said he wrote to Sihunu to highlight concerns regarding the meetings and the required reports that hampered the committee’s ability to fulfil its mandate of oversight and accountability.

“The committee’s work largely depends on Section 32 reports, which relate to the Unlawful, Irregular, Fruitless and Wasteful Expenditure. Notably, the committee only becomes aware of the specifics of these reports once they are formally presented for investigation. During these proceedings, executive directors are expected to account for and provide detailed explanations on each case. The absence of these reports has far-reaching implications.

“Encouragingly, the acting city manager has responded to the committee’s concerns after meeting with myself and the Municipal Public Accounts Committee office. In her communication, she confirmed that the matter has been addressed with the relevant directorates, with support from the Section 154 intervention team. According to the committee’s secretariat, the outstanding reports have now been received.”

A request has since been submitted for the committee to convene a special meeting on 15 June to consider the reports, but has not yet been confirmed. DM