‘Make them pay back the R22.4m’
Six years after City of Champions started to receive money — totalling R22.4m — from the Nelson Mandela Bay municipality for splashy legacy events and hare-brained record-breaking attempts, the city has finally been urged to recover whatever cash it can and report the irregular expenditure to the police.
This is one of the recommendations contained in a leaked PwC report — compiled by Gerard Sutton and Janine Swart — that was handed to the municipality on Friday after acting city manager Mvuleni Mapu authorised payment for the report.
City of Champions hosted 113 events and was expected to stage 27 world-record attempts from 2014 to 2017.
The company was meant to make the Bay the first metro in the world to hold the most world records simultaneously in three years, while building social cohesion.
Port Elizabeth businessman Mazizi Msutu was the only director of Impact Leisure Investments, which traded as City of Champions at the time.
Attempted records included the most consecutive perfect push-ups, most hugs given in one minute, most frog-leap jumps by two people, and most high-fives in one minute.
One record, the longest marathon playing rugby union, was recognised by the Guinness World Records.
Other records were done through RecordSetter, a US company that allows people to submit videos as proof of attempts.
“All payments made to City of Champions [amounting to R22.4m] should be classified as irregular expenditure ... as we found no evidence that the requirements related to unsolicited bids were complied with,” the report says.
“The municipality should consult with its legal counsel to determine, based on the findings contained in this report, whether the municipality has a claim to recover the irregular expenditure.”
Sutton and Swart wrote that the municipality should inquire with its legal department if the irregular expenditure should be reported to the police.
“The findings of the report highlight instances of alleged misconduct by the sports, recreation, arts and culture officials.
“This report should, therefore, be provided to the labour relations directorate for them to consider whether sufficient evidence exists to support any disciplinary action that may be instituted.”
Msutu, when contacted, said he had never been contacted to give his side of the story by PwC.
“Now that a forensic report about City of Champions has emerged, which was done without the participation of City of Champions, allow me to correct its single-most flaw,” he said.
This flaw, he said, was based on the reasons PwC found the unsolicited bid did not comply with policy.
“If City of Champions had been part of the investigation or had been given the opportunity to comment on a report before it was made available to the media, I would have advised PwC for free and not charged them a cent just to tell them that I never submitted a tender to the municipality,” he said.
“I would have taught PwC that I submitted a sponsorship request to the municipality.
“If PwC had read the agreement between City of Champions and the municipality, they would have seen that, first and foremost, it is entitled ‘Sponsorship Agreement’, because that is what it was.
“It is a sponsorship, nothing less, nothing more.
“The idiotic and silly conclusion that there was no evidence of compliance with supply chain management policy is exactly that.
“It is idiotic, silly, illogical and irrational as there was no supply chain management issue to be dealt with in terms of that policy.
“All events that the municipality sponsors such as the Herald Cycle Tour, Ironman, Arts Festival, Happy Valley Food Festival, Cape Recife Music Festival, VW Open Life Saving Championship, Rumble Boxing, to mention a few, are all dealt with in terms of the events policy of the municipality.
“The Herald should understand that.
“All of these events went through a similar process that City of Champions went through because they too are not tenders to the municipality.
“They are not unsolicited bids but sponsorships.”
The company was hired under the watch of then sport, recreation, arts and culture executive director Noxolo Nqwazi.
She has been accused recently by acting ANC chief whip Litho Suka of refusing to pay the accounting firm while she was the acting city manager, allegedly to ensure two forensic reports never saw the light of day.
Suka made this startling allegation in a confidential report sent to ANC secretary-general Ace Magashule earlier in July.
In the report, Suka explained why his councillors had defied Eastern Cape party bosses when they endorsed Mapu as acting city manager instead of Nqwazi.
Contacted for comment after being sent a copy of the recommendations, Nqwazi said she was unable to fully comment.
“I assume that the report will be subjected to the internal process of the municipality which will include, but not be limited to, presentation of the [report] to council for a necessary resolution to initiate further processes for the implementation of the report.
“I have not been provided with a copy of the report to make the necessary representation save to state that the recommendations make reference to SRAC officials and not directly to me.”
The company was hired through an unsolicited bid, which meant it never went out to tender as the company approached the municipality.
However, the Weekend Post reported three years ago that artwork, hotels, an overseas holiday, fancy whisky and restaurants — with one bill topping R20,000 — were just some of the luxuries paid from the City of Champions bank account.
Msutu declined to comment on the spending at the time, saying the information came from private and confidential documents.
At the same time, suspended city manager Johann Mettler said former mayor Athol Trollip had asked him to commission an independent investigation into the City of Champions project after the Weekend Post report.
Eastern Cape DA leader Nqaba Bhanga said: “The party welcomes the report and we believe it must be presented to council to deal with the recommendations decisively.
“We believe there is more irregular expenditure in the Bay that needs to be addressed as well.”
In a December 2015 close-out report, City of Champions listed R2m spent on medals handed out at events.
Two companies hired to supply the medals — Valley River Trading in Gauteng and Perspective Engravers who trade as Badge Guy in Port Elizabeth — only charged a combined R234,932, according to invoices and financial records.
However, the forensic report by PwC shows that only R375,000 was budgeted for on medals in a progress report supplied to PwC.
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