AG issues first certificate of debt to force municipal manager to pay back R4.6m loss due to inflated tender

Auditor-General Tsakani Maluleke has exercised some of her new powers for the first time by issuing the first certificate of debt, forcing a municipal manager to pay back a R4.6 million loss due to an inflated tender.

Maluleke told the Standing Committee on the Auditor-General in Parliament on Friday that this certificate of debt against the Ngaka Modiri Molema District municipal manager was the first since the Public Audit Act’s (PAA) extended powers came into effect in April 2019.

This new "milestone", according to Maluleke, follows the material irregularity (MI) issued by the auditor-general on overpayment for water tank services rendered to the municipality by a service provider.

The certificate of debt issued by the AG will hold municipal manager Allan Losaba personally liable to pay back the money with interest applicable between 30 days after the certificate has been served and the date of full payment.

The municipality appointed a service provider in June 2018 to provide water tanking services as part of drought relief, for water and sanitation services to be rendered to various communities as and when required.

The initial contract term was for two years, effective from July 2018 to 30 June 2020.

Auditor-General Tsakani Maluleke: "And this was extended for an additional six months. The contract management processes were so weak that this led to a material financial loss of R4.6 million. The loss relates to daily tankering schedules that overstated the kilometres of the particular service provider had changed and as a consequence, the municipality was essentially overpaying for the service."

Maluleke said that on issuing the certificate, she also reminded the executive mayor of the municipality that in terms of section 5b(2) of the Public Audit Act, it is the mayor’s responsibility as the executive authority to collect the amount specified from the accounting officer.