Municipality Fraud and Corruption Investigations

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LOCAL GOVERNMENT AND ADMINISTRATION SELECT COMMITTEE
10 September 2003
MUNICIPALITY FRAUD AND CORRUPTION INVESTIGATIONS


Chairperson: Mr B Mkhaliphi (ANC)

Documents:
Summary of report on forensic investigation into Lekwa Municipality (Appendix 1)
Summary of investigation into Dikgatlong Municipality (Appendix 2)
Nkomazi investigation reports
Delmas investigation reports (email
info@pmg.org.za for document)

SUMMARY
The Delmas municipality investigation report indicates abuse of funds by the Mayor. The MEC dealing with the Nkomazi Municipality has appointed Ebony Forensic Auditors to investigate allegations of fraud and corruption in the municipality. The Dikgatlong Municipality report indicates that the concerns of the Barkley West Task Team have been adequately addressed and that there is no need for further investigation. The Lekwa Municipality investigation report highlights misuse of funds by the Mayor and wrongful suspensions of municipal officials.

MINUTES
The Committee considered the following investigation reports:

Dikgatlong municipality investigation
The Chair said that the investigation report shows that all issues that the Barkley West Task Team complained about have been sufficiently addressed. He pointed out that the MEC for Housing and Local Government had indicated that there was no need for further investigation into the complaints as they have already been dealt with. The MEC said that he has also convened a team to look into the affairs of the Emthanjeni municipality. Also noted was the fact that some members of the local government would like the Select Committee to pay an oversight visit to the municipality despite the MEC's recommendation that there is no need for further investigations.

Mr J Horne (NNP) felt that that there is a need to visit the municipality so that the committee could observe what is happening there.

The Chair felt that there is no need to visit the municipality given the MEC's recommendation. He alluded to the fact that it is normal for political parties to make unfounded allegations and such do not necessarily warrant intervention.

Mr K Mokoena (ANC) suggested that the Committee should invite delegates from the municipality to come and address the committee if necessary

The Chair indicated that an investigation had taken place and the MEC had made recommendations. There might possibly be some problem of communication or misunderstanding within the municipality. The investigation had been done correctly but people are still not aware of its outcome.

Mr P Maloyi (ANC) said that the Barkley West Task Team (BWTT) is a political party with councillors and therefore they raise issues in the council. He observed that perhaps the issues they had raised were not adequately addressed by the council hence they had taken them to the MEC and then to the NCOP that now requires the Committee to act. He asked if the approach of the BWTT is correct. He opined that if the Committee is forced to act then they would be setting a bad precedent.

The Chair agreed that one would be setting a bad precedent given the fact that the complaints were all addressed by the office of the Mayor and Municipality Manager. The report indicates that the issues were addressed adequately. He suggested that perhaps the municipality needs to refine its communications strategy since people complained of lack of communication.

Mr Mokoena said that if the NCOP wants the Committee to act, the Committee might simply acknowledge receipt of document or invite the municipality to come and address the Committee. The Committee might also respond by paying a visit to the municipality. He cautioned against allowing every municipality the opportunity to abuse the process - in that every time they complain, the Committee would have to act.

Mr Maloyi supported Mr Mokoena and said that the Committee has never heard of marches by people handing memorandums to the municipality. If opposition parties in other municipalities realise that they can simply take issues directly to the NCOP, there might be problems.

Mr Horne suggested that the Committee should abide by the MEC's recommendations and that if it later turns out that there is a need for intervention, the Committee would then act.

Mr Maloyi suggested that the Committee should respond to the BWTT and ask them to highlight issues they are not happy with so that if the Committee decides to invite the Mayor to address it, they would know on which areas to focus. There is no need to invite the BWTT as they have already been given answers to their complaints.

Mr Mokoena said that if the Committee responds to the BWTT it would be opening an avenue for any municipality to start writing to the Committee.

Investigation into Delmas Municipality (Mpumalanga)
The Chair said that the MEC of Local Government had authorised investigation into the municipality's affairs following allegations of fraud, corruption and other malpractice. The investigation report has since been forwarded to him. It is a very thick document that still needs to be edited. It would be discussed once it has been edited. The report indicates that the then Mayor had abused funds and he has since been demoted to an ordinary councillor.

The Chair noted that he has asked the MEC if any legal proceedings would be instituted against the then Mayor and if the municipality has done anything to recover the money. He said that the MEC had replied that the council is still looking into the matter.

Investigation into Likwa municipality (Mpumalanga)

The Chair noted that the report highlights a number of areas where there was a clear misuse of municipal funds, especially the unregulated use of the Mayoral Fund by Mayor Thabete, unauthorised transfers of money, wrongful suspensions of municipal officials and the non-payment of services by Councillors.

He had asked the MEC if any corrective steps have been taken especially regarding the funds that have been abused and that the MEC could not provide any answer. He observed that the Mayoral Fund features prominently in all cases where the affairs of municipalities are probed.

Mr Mokoena said that is seems that the issues dealt with in the report have since been referred to the Director of Public Prosecutions. The Committee should be informed of the decision the Director takes.

Investigation into Nkomazi Municipality
The Chair noted that the MEC has designated auditors to investigate allegations of fraud, corruption and other malpractices within the municipality. He would not be surprised if the abuse of Mayoral Fund also futures prominently in the report. The Committee awaits the report with keen interest.

The Chair and Mr Mokoena expressed concern with the fact that an outside auditing firm had been hired to do the job whilst the municipality could have done it itself. Mr Mokoena indicated that in Northern Cape Province an internal team was tasked with the investigations and had produced a brilliant report. He lamented the fact that the municipality has missed an opportunity to empower itself by doing the investigation itself.

The meeting was adjourned.

Appendix 1
INFORMATION SERVICES: RESEARCH

Summary of Report on Forensic Investigation into Lekwa Municipality

1. Background

This is an overview of the report on factual findings of the forensic investigation into the Lekwa Municipality. The investigation covered the period 5 December 2000 to the date of reporting on 1 August 2002.

The investigation arose out of a request from Mr M Bhabha: MEC for Local Government, Traffic and Safety, Mpumalanga, to investigate complaints about irregularities allegedly committed by officials and Councillors serving the Lekwa Municipality.

The report highlights a number of areas where there was a clear misuse of municipal funds, especially the unregulated use of the Mayoral fund by Mayor Thabete, unauthorised transfers of money, wrongful suspensions of municipal officials and the non-payment for services by Councillors.

There were certain matters that could not be finalised by investigators due to the unavailability or lack of co-operation by witnesses, lack of access to privileged information and time constraints.

The method of investigation included analysing and reviewing documents obtained from Mr Bhabha, the Municipality and other third parties. The investigators also conducted interviews with relevant officials and third parties. The investigators had various documents at their disposal. These included: correspondence related to grievances against Councillors and copies of relevant bank statements. With respect to the investigation into the use of the Mayoral fund, the investigators reviewed the following documents: returned paid cheques, original receipts and invoices, Council's resolutions and bank statements for the period December 2000 to April 2002. The authenticity of these documents could, however, mostly not be verified.

The report draws conclusions on the basis of the information available during the investigation but notes that Mayor Thabete's version of the events had no bearing on their report. The report recommends that some matters be investigated further. The assistance of the South African Police Services could, for instance, be sought to gain access to the accounts of the Deputy Treasurer and the driver of Mayor Thabete.

2. Wrongful Suspensions

Two senior Municipal officials alleged that they were wrongfully dismissed due to their actions against the Mayor and Councillors with respect to traffic violations. Mr J McPherson: Chief Protection Services, Lekwa and Mr JA Landsberg: Acting Head of Traffic, Lekwa were suspended for "conspiring against Council members". They argued that their suspensions were wrongful and that the prescribed procedures for suspending personnel were not followed. They argued that their suspensions arose out of circumstances relating to the following incidents:

Mayor Thabete's criminal charges for traffic violations. Thabete was elected mayor for Lekwa after 5 December 2000; prior to his election as Mayor, Mr DL Thabete was issued a ticket for driving a vehicle as a learner driver without supervision. Thabete neither paid the fine nor appeared in court and a warrant for his arrest was issued. The warrant was later cancelled when he paid a fine. A Traffic Inspector, Ms Terblanche, and her clerical assistant later registered grievances with the Council after Mayor Thabete allegedly threatened to have their employment terminated due to their handling of his traffic violation. The Council has not responded to their grievances.

Mr Maboea: Speaker of Lekwa, was charged by Mr Landsberg for allegedly driving under the influence of alcohol, supplying false information to a traffic officer and reckless and negligent driving.

Mr Ngwenya, a Councillor, allegedly threatened Mr Rossouw: Head Licensing Officer, and labelled him a racist in the course of Mr Rossouw implementing a Council resolution to relocate hawkers to designated areas.

Members of the Lekwa Community complained that the Mayor and Council members were disregarding traffic rules. Traffic officials were therefore instructed to those Council members for contravening the rules.

Mr De Bruto, Town Treasurer, Lekwa, was also suspended for "contravening a Council decision". He argued that he was wrongfully suspended, without the proper procedures being followed, as a result of his decision to employ a particular person to do programming work for the Council.
3. Mayoral Account

3.1 Findings of the report

In spite of repeated instructions dating from July 2001 from the Head of the Department of Local Government to all local municipalities to close their Mayoral Accounts, the Lekwa Mayoral account continued to be operated and was only closed on 26 March 2002.

The Deputy Treasurer of Lekwa was the official responsible for the Lekwa Mayoral account at all times. However, he was never officially appointed; the responsibility was given to him through an administrative decision and implied through his actions.

The applicable rule for the use of the discretionary fund was "Council funds for Council use" although this admittedly does not further define what would constitute acceptable expenditure.

The report concludes that, by using the Mayoral account for private purposes, Mayor Thabete did not act in the best interest of the Council and the wider community he was meant to be serving.

The Deputy Treasurer was negligent in the performance of his duties in allowing the Mayor to use the funds in the Mayoral account for private purposes and not submitting a reconciliation of the account to the Finance Committee for the period December 2000 to December 2001.

On a number of occasions Mayor Thabete signed fuel invoices where fuel was supplied to other individuals; these were attempts to mislead the Council.

Even fuel used for the Mayor's private purposes was partly paid for by the Council.

3.2 Recommendations

Disciplinary proceedings could be instituted against the Deputy Treasurer for the negligent performance of his duties with respect to the Mayoral fund.

The report should be submitted to the Director of Public Prosecutions for a decision on whether or not to institute criminal proceedings against Mayor Thabete.

With regard to the fuel used by the Mayor for private purposes, a civil claim for the amount could be instituted.
3.3 Background

The Mayoral Account, available to the Mayor for general purposes, was established in terms of the previous Transvaal Ordinance 17 of 1939.

The amount of the fund, determined before the Mayor's term of office begins, may not vary during the Mayor's term, either through increases or decreases. The amount is deposited into a specific bank account. The Mayor and an official (designated by the Council) determine the way in which the funds should be spent. This official accounts for the expenditure to the Finance Committee, although the amount is not subjected to an annual audit.

The investigation focussed on the Mayoral Fund, but there was also another personal allowance allocated to the Mayor by the Council, an amount of money not exceeding a third of the Mayoral fund. The use of this personal allowance is not subject to auditing; the Mayor's signature will be enough to authorise the expenditure of the allowance.

Here follows an outline of the events which eventually resulted in the closure of the Mayoral Fund on 26 March 2002:

30 May 2001
Council decision A167 resolved that a budget in the amount of R30 750 was to be made available to the Mayor for photos, crockery, an air conditioner and a heater. Resolution A 169 resolved that an amount of R70 000 be made available to the Mayor for the financial year for the Mayoral fund. The report notes that the total allowances for the Mayor for the financial year (2001/2002 financial year) equals R 77 000.

9 July 2001
Mr Sandane: Head, Department of Local Government, sent a letter to all local municipalities instructing them to close, with immediate effect, the special Mayoral accounts since the Remuneration of Public Officer Bearers Act of 1998 and the Structures Act of 1998 revoked the Transvaal Ordinance of 1939.

25 September 2001
Council decision A 412 stated that the report by the Town Treasurers on personal and Mayoral fund allowances, dated 30 August 2001, should be noted. However, a legal opinion should be taken first and in the meantime the Mayoral Fund continued to be in use.

The Treasurer's Report, paragraph 5, states that no expenditure should be incurred without the prior approval of Council. If these powers are delegated to the Executive Committee, they would have to approve the expenditure in advance. The Report set out the following guidelines for which the Mayor's could acceptably use the allowance:

Expenditure relating to transport needs of groups (for example religious groups or welfare).
Donations to charity organisations and institutions.
Any other expenditure which the Mayor deemed necessary in order to execute his Mayoral functions properly.
Entertainment to groups and individuals.
Entertainment for Mayoral purposes at the discretion of the Mayor; proof would have to be provided that the expenditure was for official purposes.

The Council did not accept the Treasurer's report. Instead they asked that the status quo be maintained while legal opinion was sought. The Mayoral Fund was therefore not closed.

29 October 2001
Mr Sindane repeated his instructions to Council that the Mayoral Fund be closed.

The legal opinion obtained by Council stated that the Mayoral Account was being operated illegally and recommended that it be closed as it was being conducted in contravention of the Remuneration of Office Bearers Act and the Local Government Structures Act.

26 March 2002
Council decision A122 resolved that the Mayoral Account should be closed with immediate effect.

Mr Rampete: Deputy Treasurer, noted in his comments to investigators, that the applicable rule for the management of the Mayoral Fund was "Council funds for Council business". He revealed that the Council had not appointed him as the designated officer for the account. Instead, he was verbally requested by the Town Treasurer, Mr De Bruto, to oversee the Mayoral account. Mr Rampete, the Deputy Treasurer, was therefore the responsible first signatory on the Mayoral account and this position made his responsible to ensure that transactions were effected in the approved manner and that the account was managed responsibly.

Mr De Bruto in turn explained Mr Rampete's appointment as being based on an administrative decision. Mr De Bruto and/or Mayor Thabete were second signatories on the Mayoral account. Mr Rampete and Mayor Thabete had signed all cheques for the Mayoral account.

3.4 Expenditure from the Mayoral account

Mr Rampete confirmed that he had never prepared reconciliations for the Mayoral account, as required.

The investigators were not able to perform such reconciliation as fourteen original paid returned cheques to the value of R 17 183,70 were unavailable. Substantiating documentation for 65 paid returned cheques to the value of R 50 123, 57 could not be provided for by Mr Rampete (as Deputy Treasurer and designated official responsible for the Mayoral account).

The report records the following irregular expenditure:

Out of 50 transactions, 37 transactions were related to Mayor Thabete's personal account.

Irregular payments from the mayoral account included a cheque to the value of R 3 200 allegedly used to pay a long outstanding debt of the Mayor which had accrued before he became mayor. The amount was meant as partial payment towards the funeral expenses of a family member of the Mayor. Although the Deputy Treasurer had discussed the possibility of the debt being covered by the Mayoral Fund he told investigators that he believed the funds would be used for a function. The debtor, being the Funeral Directors, claimed that the debt has still never been paid.

According to the claim forms submitted by Mayor Thabete, there was a total expenditure on fuel, tyres, subsistence and travel of R 15 170,24. The breakdown of this expenditure is as follows:

Another cheque to the value of R 1460,34 was drawn to pay for tyres for the Mayor's vehicle, which he had ordered in his personal capacity. Although the Mayor had agreed to refund the money, he has never done so.

Several irregular travel claims were submitted by Mayor Thabete. The Mayor claimed for kilometres travelled when the Council already paid the fuel for his vehicle.

The Mayor used the Municipality's petrol account at a local garage to fill his private vehicle with fuel. The Mayor was also using funds from the Mayoral account to pay for his own petrol account.

Fuel for two vehicles, the owners of whom could not be traced, was paid for with cheques from the Mayoral account. It appeared that friends of the Mayor also used the Mayoral account for fuelling their cars.

While not in itself irregular, the report noted that most of the cheques issued from the Mayoral account reflected private persons as the payees.

4. Water and Lights Accounts of consumers and Councillors
Consumers
The outstanding water and lights accounts of consumers in Lekwa were examined by investigators; these accounts were substantially in arrears. The water and lights accounts of all serving Council members were also examined.

The report focussed on the accounts of two specific businesses in the Lekwa district. It was alleged that the business owner had an informal agreement with the Mayor regarding the supply of basic services to the businesses, that is water and lights. The services were terminated but later reconnected in contravention with the Council's credit control policy, which stipulates that services can only be reconnected if agreements for long overdue arrears and the payment of the current account have been paid in full.

The contract of Debtpack, the official debt collectors for Lekwa, was cancelled by the Municipal Manager but no Council Resolution could be found authorising the cancellation of the contract.

Councillors
Mayor Thabete was found to be in arrears with an amount of R 1584,84. He was receiving his electricity via a prepaid meter system; however, the data on his account suggested the bypassing of the normal electricity supply system. This could not, however, be confirmed. Mayor Thabete's electricity supply had been unlawfully reinstated by someone unknown, although he remained in arrears.

4.1 Findings of the report

The report concludes that Mayor Thabete contravened the code of conduct for Councillors by allowing his water and light accounts to fall into arrears.
The Deputy Treasurer's actions with regard to the handling of the arrear accounts were not to the benefit of the Council and in contravention of the Council's debt control policy.

4.2 Recommendations

The arrear amount on the municipal accounts could be recovered from Mayor Thabete.
All the water and lights accounts for Lekwa should be audited, especially instances of abuse.

5. Unexplained transfers into an employee's bank account

The report found that the bank account of a Municipal employee had been used to pay money from one Meshack Motloung, who had been awarded a tender to build houses in terms of a housing project, to the Deputy Treasurer, Mr Rampete.

5.1 Recommendations

The report recommends that the matter be forwarded to the Director of Public Prosecutions for consideration.

6. Allegations that require further investigation

Water tender
Contracts were alleged to have been awarded to persons well known to the Council. It also seemed that intimidation was rife and that irregular conduct around tendering was common.

Security tender
A security tender had been awarded to a company which was employing the wife of the Speaker of Lekwa Municipality. The Speaker did not recuse himself from the decision making process for the awarding of the contract, in spite of this indirect interest. This contravenes the Municipal Systems Act, 32 of 2000, specifically Schedule 1, Article 5. The Municipal Manager asserted that this matter was referred to the Ethics Committee but this could not verified.

Unexplained bank transfers
One of the Councillors transferred an amount of R6000 into the bank account of the Deputy Treasurer. Although the Councillor argued that the money was for the payment of a sub-contractor to a housing contractor, the sub-contractor claimed never to have received that money. Moreover, the Deputy Treasurer claimed never to have received that money.

Another amount of R10 000 was paid into the bank account of the mayor's driver. The money was subsequently transferred to Mayor Thabete and a Councillor before their departure on an official visit to China.

7. Outstanding issues

In relation to the Mayoral account, the Deputy Treasurer failed to provide investigators with all the relevant returned paid cheques. ABSA bank was requested to provide copies of bank statements. There was also a second Mayoral account, marked as 'The Mayoral Sports Fund' account, for which the Deputy Treasurer could not provide bank statements. The investigators are awaiting bank statements from ABSA together with returned paid cheques.

Sources:
Report on Factual Findings on the Forensic Investigation into the Lekwa Municipality

Appendix 2
INFORMATION SERVICES: RESEARCH


25 August 2003

Summary Of Investigation into Dikgatlong Municipality

1. Introduction

There are different kinds of investigations by the provincial government into local government:

In terms of Section 139 of the Constitution of South Africa, there may be an investigation and eventual intervention in a municipality.
In terms of Section 106(3) of the Municipal Systems Act, an MEC may authorise an investigation into a municipality or request information where there is reason to believe that a statutory obligation is not being fulfilled or there is fraud, maladministration and so forth. In addition, there is provincial legislation on commissions of enquiry. If, for instance, there was an investigation in terms of Section 106 in Dikgatlong, the Northern Cape Committee of Enquiry Ordinance would also have an effect on the investigation.

The investigation being reported on here does not fall into either of these two categories. It was simply an investigation to determine whether there were grounds for an investigation in terms of Section 106 of the Municipal Systems Act.

The investigation arose out of the following circumstances. The Northern Cape MEC for Housing and Local Government, Mr Dikgetsi, received complaints from a group known as the Barkley West Task Team about certain irregularities in the running of the Dikgatlong Municipality. The Barkley West Task Team sent a memorandum to the MEC as well as the Municipal Manager setting out their grievances with Dikgatlong Municipality officials and Councillors. They demanded that a commission of enquiry be established by the MEC and that officials and Councillors be suspended with immediate effect pending the investigation. The financial standing order and Councillors Code of Conduct would apply if the commission of enquiry found that their concerns were true.

The MEC instructed his Departmental Legal Advisor to consider and advise whether it was feasible to appoint such a commission of enquiry. The investigation team, known as 'The Task Team' consisted of officials from the Department of Housing and Local Government, led by Mr R Matthews, the legal advisor.

2. The Investigation

On 21 January 2003 the Task Team conducted the investigation into the alleged mismanagement at the offices of the Dikgatlong Municipality. Mr R Matthews, acting as Chairperson, with Ms Phenyeke and Mr Mothelesi, presided over this meeting between representatives of the Council as well as the Barkley West Task Team, where each party was given a chance to state their case. Each party had also provided written submissions to the Task Team. On the basis of these submissions and the representations and evidence available, the Task Team compiled their report.

According to the minutes of the meeting on 21 January, the following issues, which had previously been complained of by the BWTT, were raised:
The use of the Mayoral Fund.
R1 million loan to SA Boyi Company.
Use of Council vehicles.
Stolen Computer.
The use of R 25 000 paid to the Council by Hall of Diamonds.
The manner in which residential sites had been allocated in Rooirand.
Municipal services being employed for private use.
High spending on travelling and accommodation for Councillors and Officials.

The Mayor's response to the Task Team, on behalf of the Council, was as follows:
There was no justification for the BWTT to have written a memorandum to the Municipal Manager and the MEC for Local Government.
The BWTT is a registered political party with two Councillors representing them in the Council.
He alleged that the memorandum was a personal vendetta between the Chairperson of the BWTT, Mr Benne, and himself.

In their report to the MEC on 23 May 2003, the Task Team concluded that the complaints by the BWTT did not provide sufficient justification for the appointment of a formal commission or committee of inquiry by the MEC into the affairs of the Municipality. The matter was regarded as finalised.

On 19 June 2003 the Barkley West Task Team addressed a letter to the National Council of Provinces requesting an intervention in what they alleged to be the "biasness" of the provincial Department of Housing and Local Government. They pointed out that the Department had repeatedly denied their requests to intervene in the mismanagement of the Dikgatlong Municipality and had not allowed them sufficient time to support their arguments with documentation.

3. Issues giving rise to the Investigation

The MEC had been alerted to problems at the Dikgatlong Municipality on 3 October 2002, when the Barkley West Task Team (BWTT) handed a memorandum to the MEC, Mr Dikgetsi, as well as the Municipal Manager, Mr J Eilerd. The Memorandum isolated a number of issues.

The Municipal Manager sent the BWTT a response on all the issues raised in their Memorandum. Council's general reaction to the complaints by the BWTT were in the following terms:

The Municipality denied that they were acting contrary to the interests of the community.
All the concerns raised by the BWTT were unfounded and their allegations were false. They also provided additional explanations on all the issues raised.

The following issues were raised:

3.1 Roads

BWTT allegations:
All the roads in Dikgatlong are in an undesirable condition and potholes and repairs should be given immediate attention, specifically the Rooirand entrance road.

Response by Municipal Manager:
Applications for funding to upgrade roads have been made to numerous sources, including the Development Bank of South Africa (DBSA). The Consolidated Municipal Infrastructure Programme (CMIP) has approved funds for the upgrading of the Rooirand entrance and construction work is being planned.

3.2 Mayoral Fund 2001-2002

BWTT allegations:
A detailed report on how money is spent should be submitted.

Response by Municipal Manager:
The Municipality pointed out that since the beginning of his term of office, the Mayor had spent the Mayoral fund on charity in the form of assistance to community members in need for food and shelter as well as on paupers funerals within the municipal area.

3.3 R1 million loan to SA Boyi Company

Resolution 2001/12/11was taken by ANC Councillors on 14 December 2001 to loan R1 million to the Chinese SA Boyi Company, which would have a benefit of R 130 million for Dikgatlong.

On 28 February 2002 Councillor Leon Kock enquired about the amount in a motion and it was confirmed that the R1 million was loaned to SA Boyi.

BWTT allegations:
The BWTT called on the municipality to cancel the deal. SA Boyi should pay back an undisclosed amount paid to them for the Brick making factory.

Response by Municipal Manager:
Council Resolution 2002/01/02 of 31 January 2002 cancelled the decision by Council to lend R1 million to SA Boyi Property Investments taken in terms of the resolution of 14 December 2001. The community was also informed that the R1 million was not paid to the Company.

3.4 Account of Kimatlab; Geological Study

BWTT allegations:
Kimatlab should be paid R64 000 for geological studies conducted.

Response by Municipal Manager:
The amount allocated for this project was R 64 183, 80. After an agreement between the Council and SA Boyi Property it was decided that Kimatlab should do the study, a form of sub-contracting. SA Boyi would then settle their account after the Council and SA Boyi accepted their report.

However, after the account remained outstanding for a considerable period of time, Kimatlab requested payment from Council. They argued that they were entitled to payment from the Council since they had negotiated with Council and not with SA Boyi. Council took a decision on 9 April 2002 in terms of Resolution 2002/03/09 to pay this account to avoid legal proceedings. A letter was subsequently sent to SA Boyi requesting reimbursement of the full amount but their reply is still being awaited.

3.5 Motions

BWTT allegations:
The Municipal Manager tends to discard motions written by Councillors as if they were ordinary letters.

Response by Municipal Manager:
The Municipality noted Councillor Kock's tendency to submit letters of complaints and instructions to Municipal Officials. Yet these letters were not in the form of motions nor did Councillor Kock indicate that they should be dealt with as motions.

The response notes that there is a standing agreement that Councillors must first bring their complaints and community related issues to the attention of the relevant Ward Councillor, who will ensure that the matter is referred either to the Council or to the Municipal Manager. According to the Code of Conduct, no Councillor may give direct instructions to any officials.

3.6 Catering

BWTT allegations:
In the 2001/02 financial year the Council budgeted R 23 484 for catering. In spite of warnings by the Accountant that the fund was about to be exhausted spending on catering continued unabated and the actual amount spent on catering amounted to R 98 000.

Response by Municipal Manager:
The BWTT'S concerns around the over-expenditure on catering for 2001/02 were noted; the amount budgeted for was R 23 484 and the actual amount spent was R 98 895. The expenditure was, however, explained as arising from the numerous meetings with communities and special Council meetings on amalgamation matters.

3.7 Municipal Vehicles

BWTT allegations:
The BWTT recommended that stickers be placed on all municipal vehicles so that they could easily be identified as municipal vehicles.

Response by Municipal Manager:
The Council has already decided to place stickers on the vehicles but the new Coat of Arms is being awaited. Progress reports are tabled before Council at intervals.

3.8 Hall of Diamonds payment of R 25 000

Hall of Diamonds paid an amount of R25 000 as royalties to the Council and it was resolved that the money be used to open a Community Development Trust.

BWTT allegations:
The Task Team asked what had happened to the account and whether the money was being properly used. They asked for the following information:
The name of the trust.
The list of beneficiaries.
Details of the account.

Response by Municipal Manager:
The assistance of the Department of Minerals and Energy and community members to provide names of suitable people to serve on the Trust was sought. However, no names have yet been submitted to the Council. The R25 000 remains in the Council's account.

3.9 ANC Membership Cards

BWTT allegations:
The BWTT protested against statements made by the Mayor to the effect that only people with ANC membership cards would be employed by the ANC and asked that an apology be issued to the community. In addition, they asked that a moratorium be placed on the construction of a stadium since the hiring was not in accordance with the agreement on the use of identity documentss.

Response by Municipal Manager:
It is Council policy that all projects be labour intensive and the whole community should benefit from it. A moratorium on the construction was impossible because the project is also behind in terms of the time schedule arranged with donors and the contractor.

3.10 Rooibult Farm

BWTT allegations:
The BWTT questioned whom the farm actually belonged to. They asked for clarity on the resolution to evict people from Rooibult.

Response by Municipal Manager:
Council had received numerous reports that the farm was bought by the Department of Agriculture for the extension of the commonage land of Dikgatlong Municipality. The farm was registered in the name of the Municipality with the understanding that the Council must work with local small farmers to develop the farm to benefit the community.

Council was forced to take action to evict people who took possession of the farm without the permission of the Council. There were also other factors which played a role in the eviction action:
Illegal game hunting and making of firewood was taking place on the farm.
Property was damaged and there was theft.
The Mayor was harassed by members of the Thusanang Committee, who demanded that the farm be handed over to them.

3.11 Telephone allowance

BWTT allegations:
The extra R 400 allowance for Ward Councillors is unnecessary. The R700 cellphone allowance is sufficient as they are not full time councillors.

Response by Municipal Manager:
Council policy provides that there is an allowance of R 500 per month for Councillors and R 700 per month for Ward Councillors. The policy does not provide for any other extra telephone allowances.

3.12 Transport Policy

BWTT allegations:
Non-municipal workers are being seen driving the municipal vehicles. The BWTT therefore asked that the adopted transport policy should be applied. They called for a particular worker who was using a vehicle in contravention of policy to be charged. In addition they asked for a full report on the maintenance, logbook and petrol consumption of all municipal vehicles.

Response by Municipal Manager:
The Council policy provides as follows:
The Mayor may use the BMW CAG 3 NC and is fully responsible for the vehicle while in his possession.
A petrol card system is being operated and vehicles must maintain logbooks. Details of maintenance and petrol and oil consumption are also recorded.
Councillors are not allowed to keep vehicles over night at their residences unless they have pre-arranged it for a specific purpose.
Vehicles may not be used for private purposes by officials or Councillors.

If the allegations of the Task Team were found to be true, the Council would take appropriate corrective steps.

3.13 Toilets

BWTT allegations:
The BWTT asked that the non-SABS approved latrines be done away with and be replaced by flush toilets.

Response by Municipal Manager:
The Department of Water Affairs and Forestry is busy installing VIP toilets in Rooirand. Each individual beneficiary was allowed to exercise a free choice.
In meetings with the community, it was agreed that DWAF should continue with the project.

3.14 Accounts

BWTT allegations:
The accounts are always faulty; the Finance Department should make sure that all meter readings are correct. The equity policy should be serving its purpose so that people are not judged before they are granted the indigency policy. The BWTT also alleged that the Mayor threatens municipal employees.

Response from Municipal Manager:
There are problems around incorrect accounts. This stems from the amalgamation of the financial systems of the three disestablished municipalities, following demarcation. Changes were also made to the IT system and data was not transferred completely correctly.

Councillors are aware that a process to purify all data has begun, which should be finalised in the near future. However, delays have been caused by a shortage of staff in the Finance Department.

3.15 Allocation of Rooirand sites

BWTT allegations:
The BWTT demanded an enquiry into the allocation of sites to old residents of Rooirand.

Response from Municipal Manager:
Councillors always consult with the affected residents when they are to be moved to surveyed sites. No complaints have been received from residents of Rooirand although people are free to lodge their complaints with the municipality.

3.16 Ward Committees

BWTT allegations:
The BWTT alleged that Ward Committees have not been functional since they were established. They serve no purpose and they therefore should be replaced or reworked around their roles and responsibilities.

Response from Municipal Manager:
The Ward Committees were elected in accordance with prescribed processes and the Council is of the opinion that they are performing reasonably well.

3.17 Unfair municipal services

BWTT allegations:
Municipal vehicles and employees were used during funerals and to erect tombstones or build houses.

Response from Municipal Manager:
If more detailed information can be provided on the use of municipal labour for private use by officials and Councillors, the matter would be dealt with in terms of procedures prescribed by law.

3.18 Travelling allowance

BWTT allegations:
A full report was demanded on the travelling expenses of the Town Manager, including cash received, accommodation accounts and transport and kilometres travelled. Apart from those of the Town Manager, all other travelling expenses should be investigated.

Response from the Municipal Manager:
The amount budgeted for travelling and accommodation for 2001/02 was R 120 000 and actual expenditure was R 247 687, 93. This covers the travelling of Councillors, Officials and Integrated Development Plan (IDP) forum members to local government related meetings. Council are usually selective about the attendance of meetings and make use of the most effective travelling and accommodation.

3.19 Volunteerism

BWTT allegations:
BWTT argued that volunteers should not be used any longer as they are being used as a vehicle of nepotism.

Response from the Municipal Manager:
The response explained the circumstances around the use of particular volunteers. It noted that a decision on the use of certain volunteers was taken in the light of serious staff shortages. There was pressure on the Council to begin implementing certain new projects and persons with relevant experience also became volunteers.

3.20 Governance and Administration

BWTT allegations:
The BWTT alleged that ANC Councillors cannot differentiate between governance and administration. For instance, municipal workers are given instructions by Councillors.

When community members seek administrative attention, Councillors are always bullying community members. Were Councillors therefore also employed as municipal workers?

Response from the Municipal Manager:
By now all officials and Councillors must understand their roles and functions; they were given copies of the Municipal Systems Act and the Code of Conduct for Councillors. Those in violation of these requirements will face the consequences.

3.21 Paupers funerals

BWTT allegations:
A detailed report on the paupers' funeral fund was requested. Even after the Mayor had announced that the fund was exhausted, such funerals continued to be funded.

Response from the Municipal Manager:
The report acknowledged that the funds for the financial year were exhausted.

3.22 Stolen Computer

BWTT allegations:
The BWTT demanded a full report on a computer which was reported stolen, although there appeared to be no police docket or investigation.

Response from the Municipal Manager:
In their response it was acknowledged that this matter needs to be followed up. In order to confirm whether a computer was missing, the Software suppliers were asked for a list of the computers and the serial numbers of computers which they had supplied. The list was still being awaited.

3.23 Graveyard

BWTT allegations:
The BWTT demanded that the graves be numbered as administration fees are paid for them.

Response from the Municipal Manager:
During the budget process over the past few years Council considered the numbering of graves. However, it was placed on hold, as it would have resulted in higher tariffs. The current tariffs are insufficient to cover all the graveyard related expenditure.

3.24 Renovation of Halls

BWTT allegations:
The Resweletse and Proteahof halls generate a great deal of money but are in terrible condition and need to be renovated.

Response from the Municipal Manager:
Council spent a considerable amount of money upgrading halls especially the Resweletse hall, which was seriously vandalised after a few weeks and this left the hall in a worse condition.

The income derived from the halls is not sufficient to justify incurring major expenses for upgrading. The Department of Welfare has made funds available to upgrade all the halls as they are being used as pension pay-out points. Work will commence once the programme has been finalised.

3.25 One Stop Centre

BWTT allegations:
The BWTT argued that the one stop centre should be built in Delportshope.

Response from the Municipal Manager:
Negotiations with relevant State Departments to establish a one-stop centre in Delportshoop are in an advance stage. The site has been identified and Council has given permission that a structure be erected at the Municipal Office in Tidimalo. The Department of Welfare is expected to give a commencement date shortly.

3.26 Small miners

BWTT allegations:
Small miners should be charged a reasonable fee for mining as they use their own resources.

Response from the Municipal Manager:
In order to avoid losses previously suffered as a result of people not paying royalties, the Council adopted a policy of charging specific tariffs. These tariffs were communicated to the small miners. Council argued that they have always tried to assist SMMEs as far as possible. Incentives to Previously Disadvantaged Individuals (PDIs) have been discussed and the existing Council policy will be amended shortly.

4. Conclusion
The findings of the preliminary enquiry by the Task Team appointed by the MEC for Local Government was that there was no justification for a commission of enquiry in terms of Section 106 of the Municipal Systems Act. However, since the allegations of the Barkley West Task Team have now been referred to the National Council of Provinces, the response of the Council on the issues raised by the BWTT would have to be considered.

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