A consultant has hit back at the municipality for refusing to pay him by trying to expunge records from the finance department's computer system.
A consultant has hit back at the municipality for refusing to pay him by trying to expunge records from the finance department's computer system.
This was one of the shocking claims made in a report to Makana's Finance Portfolio Committee meeting last month, explaining why a financial consultant contracted by the municipality had been axed.
Unauthorised journal entries to the value of as much R65 million and missing files are among the alleged acts of "gross financial misconduct" that led Acting Chief Financial Officer, Namhla Dlulane to withhold payment from a consultant contracted to assist the municipality's finance department.
In retaliation, Dlulane claimed in the report, the consultant deleted information from the finance server. The data was consequently recovered, Dlulane said, and the municipality had intensified control measures as to who went in and out of the server room.
The problems with the consultant's work, according to the report, were related to bank reconciliations. "In September 2011, the bank recons were reviewed and numerous errors were identified," the report reads.
"The consultant was alerted of the errors in an attempt to correct the errors, but to no avail." The errors caused variances between the bank reconciliation and the cash book, which had shown a bank overdraft of approximately R3 million.
According to the report, a "series of unexplained or unjustifiable journal entries with significant value were prepared and processed without any authorisation in some cases by the consultant to the value of R65 million".
Furthermore, there were "missing files for other irregular journals processed by the consultant, in his capacity as an individual contracted to assist the finance department".
Responding to the report during the December meeting, Councillor Les Reynolds asked whether there was a policy in relation to the hiring of consultants, saying that the council needed to be cautious and that there ought to be criteria in place, similar to those used for suppliers.
"These people are getting big bucks. Are we getting the value?" Reynolds asked. Other matters relating to bank reconciliations and linked to the consultant, according to the report, were:
* A long list of unreconciled items amounting to R4 260 563.12 and R 1 526 847.58 for revenue and expenditure respectively;
*An uncleared suspense account amounting to R11 696 276.55. A suspense account must be cleared within 30 days and allocated to the right accounts; however this one dates from 2004 and has an impact on all debtors' accounts and other revenue paid into the municipal bank account.
Municipal Manager Ntombi Baart said corrective action had been taken and said the financial directorate needed to ensure that all transactions represented value for money. The committee noted the report and the remedial actions taken.
