INLSA
Auditor-General Terence Nombembe has previously raised concerns about the abuse of Section 36 contracts by the eThekwini Municipality.
Members of the eThekwini council’s municipal public accounts committee called on the city yesterday to put measures in place to curb abuse of the controversial section 36 provision.
Section 36 of the supply-chain management system is used when the accounting officer deems it necessary to deviate from normal supply-chain management regulations, or in exceptional cases, in which following the official procurement process is impracticable or impossible.
Auditor-General Terence Nombembe has previously raised concerns about the abuse of this section by the city, which in 2009/10 reached more than R1 billion.
The concern of the public accounts committee members came after the audit and risk committee submitted a report showing a decline in the use of the section 36 policy.
Members expressed concern that officials repeatedly said service delivery would be “adversely” affected if they did not use this policy.
Presenting a report covering two quarters which ended on September 30 and December 31, 2011, audit and risk committee head Vusi Ndlovu said that use of section 36 during this time was of “great concern”. In addition, goods worth R1 billion had apparently been procured using the policy in the first two quarters of 2012.
Since January, tenders worth R46 million had been procured using section 36.
Minutes of the municipal public accounts committee of June 14 indicated that officials responsible for the Cornubia housing development project had submitted a report to the city’s executive committee requesting approval for tenders worth R107 million – again through section 36 of the supply-chain management regulations.
“The audit committee wishes to express its concern with the view, repeatedly stated by officials, that service delivery will be adversely affected by the insistence of the audit committee that the provisions of section 36 be complied with,” said Ndlovu..
“It is the view of the committee that there are inefficiencies in the supply-chain management process, and that section 36 is used to circumvent these bottlenecks.”
Committee members wanted measures put in place to ensure there were no further abuses of this policy.
IFP councillor Birtharthee Iyir urged that a follow-up report on the use of section 36 be drafted to ensure compliance.
“The challenge is, what are we going to put in place to ensure that section 36 is not abused again? It appears to me that we have fallen foul of this time and again.”
Replying to a query about the section at the committee meeting of July 2, city manager Sbu Sithole told the committee that previous reports about section 36 were submitted to the council after the expenditure in question had been in incurred.
Sithole said now the section 36 reports were, in the first instance, submitted to exco to obtain an in-principle approval of section 36, adding that this new process had resulted in a reduction in the number of such awards.
