Land audit uncovers thousands of ‘off the books’ properties owned by metro
The Nelson Mandela Bay Municipality has more than quadrupled its property portfolio after uncovering a scam it believes has fleeced the metro out of hundreds of millions of rands.
The extraordinary discovery comes after a land audit revealed thousands of “off the books” properties owned by the municipality all over the Bay.
Several municipal employees have been implicated in the scam.
The report was commissioned by mayor Athol Trollip three months ago, following a presentation by corporate services that outlined thousands of leases of municipal property which were unaccounted for.
Trollip, in turn, ordered a forensic audit into sub-directorates of both the corporate services and human settlements divisions.
The report delves into the sub-letting of commercial, residential and vacant land by the municipality, which it was unaware it even owned.
According to Trollip, the report will be given to the police for criminal investigation by early next year.
He said yesterday that a team of investigators had already found more than 2 100 municipal leases for properties that were being leased out but were not on the metro’s books.
“A forensic audit of a small sample of these leases has revealed 11 alleged cases of outright corruption and theft,” Trollip said.
“These  alone have lost the municipality over R4-million – a figure that rises every month.”
The audit found that the municipality, in fact, owned 17 000 properties but only 4 000 were officially documented on its books.
These 17 000 properties include any land owned by the municipality, which incorporates vacant land, public parks, RDP homes that have not yet been transferred to the rightful owners as well as commercial and residential properties across the Bay.
Of the 13 000 newly discovered properties, at least 2 100 were being sub-let to various businesses or individuals.
“The major findings relate to illegal sub-letting, irregular leasing, illegal occupation and irregular application of council resolutions.”
Trollip said the municipality’s register had only showed 500 rented properties originally.
These alone brought in millions of rands each month in rental for the metro.
The register, following the recent audit, now puts the municipal lease register at 2 600 properties.
“Now we have to investigate each and every property to determine what the total losses have been to the municipality,” Trollip said.
He said several municipal employees were involved in the racket, profiting from money that should have been ploughed back into the city.
“Certain individuals are involved in many of the cases, which speaks to this possibly being an organised syndicate-like operation.
“This is money that the municipality could have used on various other projects for the people.
“Because of the size of the racket that we have uncovered, additional manpower will be brought in to assist with the audit.”
The second phase of the probe would include analysing each municipal lease. “Once the second phase is completed, we will be handing the documents and evidence to the police for criminal investigation,” he said.
“This coalition government will not be lenient with those implicated in irregularities.
“Public money will be recovered and those responsible will be dismissed. Corruption is no longer tolerated in Nelson Mandela Bay.”
When Trollip announced the audit in September, he said it was unclear if it was fraud or negligent governing of the management of the metro’s leases which had allowed the responsible directorates to collapse into mayhem.
A similar probe in 2010 at the Buffalo City Municipality revealed the city had 12 552 properties on its books, but the land audit revealed a further 9 286 that were then added to the register.
Bay mayoral chief of staff Kristoff Adelbert said the audit had uncovered a sub-letting scam which cost the metro multimillions of rands each year and saw municipal employees stealing those funds for personal gain.
“This mismanagement could have resulted in the buildings falling into disrepair,” he said.
“We will only know the state of some of the properties once the audit is compete.”
Police spokeswoman Colonel Priscilla Naidu said police were unable to comment on the matter until a criminal case had been formally opened.