Mogalakwena Local Municipality response to Committee questions (awaited)
Three Limpopo local municipalities were called to appear before the Committee as a follow up to the Committee's oversight visit in October 2019 to Mogalakwena Local Municipality and Collins Chabane Local Municipality and to obtain a status report from Greater Tzaneen Local Municipality.
The Chairperson noted the large numbers in some of the municipal delegations. Excess delegates would need to be accounted for as the municipalities had been warned to keep their delegations compact to avoid wasteful expenditure. She asked the Limpopo MEC for Cooperative Governance to note that some delegations were overrepresented. She asked Mogalakwena Municipality why it had such a large delegation.
Ms Andrina Matsemela, Mayor of Mogalakwena Municipality, replied that the invitation indicated that all senior managers be brought before the Committee.
The Chairperson said that the delegates before the Committee were not all Section 56 senior managers. She asked if there was a different structure in Mogalakwena municipality as the other municipalities adhered to the prescripts of the law and brought only senior managers before the Committee.
Ms Matsemela insisted she had come with only senior managers.
The Chairperson disagreed with her. She was worried about the cost implication and wondered who had been left in Mogalakwena to run the municipality. Senior managers were those accountable to council.
The Chairperson said that information had been requested during oversight visits. Some municipalities had complied while the two had partial compliance hence the necessity for a follow-up meeting so the Committee could report to Parliament.
The Chairperson told the Limpopo MEC for Cooperative Governance, Mr Basikopo Makamu, that the national committee had observed a trend where officials who attempted to implement the law had been targeted by a play of power politics. As a result, many officials had written to the Committee in protest. The Committee had taken a stance against such behaviour and it would intervene before matters turned ugly. That was the case with Greater Tzaneen Municipality which had challenges that had been covered in the media. She requested that Tzaneen present first. The Chairperson asked the Greater Tzaneen mayor to focus on the firing of its Municipal Manager, Mr Serapelo Matlala, for terminating irregular contracts. Their projects had sky rocketed to twice the tendered amount. The Codesa To Hani Street (Codesa) project was tendered for R10 million but the service provider claimed R17 million. The Mulati Access Road project was tendered for R27 million but the same service provider claimed R58 million. She asked for an overview beginning with the termination of the Municipal Manager.
Mayor of Greater Tzaneen Local Municipality (GTM) presentation
Mr Maripe Mangena, Greater Tzaneen Mayor, requested that he start with the state of the municipality.
The Chairperson replied that would require the documents to be before Members and since they were still being printed, she asked that he start with the Municipal Manager.
Mr Mangena referred to the written presentation which had been prepared and stated that it mainly dealt with the reasons for the suspension of Mr Matlala. The municipal council took a decision to suspend Mr Matlala with the aim of launching an investigation into the allegation the municipality believed to be of a serious nature. The municipality intended investigating why the municipal manager applied the two rules referred to in the presentation. The Municipal Council suspended Mr Matlala because it believed the two rules had been applied procedurally incorrectly. Council appointed an independent investigator to get information on why Mr Matlala had not immediately reported to Council when problems arose.
Mr Mangena noted the other concerns Council had with Mr Matlala. He did not act on the consulting engineer recommendations that had been communicated by the relevant departments. Therefore, they wanted to investigate these matters and felt Mr Matlala should be suspended.
Mr Mangena said the same problem led to multiple protests which culminated in a Council meeting being disrupted by community members who had been associated with the service provider as sub-contractors and had not been paid. The Council also wanted to know when Mr Matlala considered it significant to report to them. He was suspended because he took the case on the Mulati and Codesa roads to court without seeking permission from Council – a matter which Council had tasked the independent investigator to investigate. Additionally, Mr Matlala had terminated the contract with the service provider when the matter had already been reported to court.
Mr Mangena said the GTM Council felt he should be suspended so it could be investigated why the Head of Infrastructure Portfolio had sent written questions seeking written responses from Mr C William Molokomme, GTM Director of Engineering Services, yet Mr Matlala prohibited Mr Molokomme from supplying the written responses. Council found that to be procedurally incorrect as it denied Council the opportunity of addressing the matter.
Mr Mangena said that Mr Matlala took to the matter of his suspension to the Labour Court which held on 28 November 2019 that Mr Matlala suspension was procedurally flawed and therefore unlawful. The court found that the disciplinary code of conduct for senior managers in local government had not been adhered to. The court would furnish its reasoning on 6 December 2019.
Mr Mangena noted that the independent investigator had already been appointed on the date of the Council resolution to suspend Mr Matlala. Council took a decision as per the resolution to appoint an independent investigator within seven days of the resolution. The independent investigator had been given 30 days and would report to Council by 13 December 2019. That would establish the facts which Council had levelled against Mr Matlala in the Council resolution as a result of its dissatisfaction with his work. Currently, the Codesa and Mulati cases were before the High Court for consideration.
Mr Mangena said he had put forward the reasons for the suspension deliberately without going into details. However, the second question by the Chairperson was on information about the Codesa and Mulati matters. According to the report before the Committee, the appointment of the Mulati Road had been made around January and the site had been handed over. The engineer had discovered the bill of quantity discrepancies with the contract amount offered by the service provider which report had been brought to the attention of the municipality. The municipality strongly believed a lot of problems could have been avoided if action to halt the continuation of the project had been taken instantly. Council had received reports from Mr Matlala at a late stage. Thereafter the political leadership entered engagements until Mr Matlala took the matter to court as highlighted earlier. The debate ensued for a while as Council’s view was that if there were errors in the contract, it had to be dealt with by the engineers and management so that the community could move forward and continue to receive services.
Mr Mangena said he had an oath as the mayor to defend the municipality which he felt he had done. However, he asked that before the matter be closed that he be granted an opportunity to raise other aspects.
The Chairperson said the reason for the meeting was for the three municipalities to raise any aspects they wanted the Committee to note and he would be given an opportunity to do that. However, before that, the current matter had to be addressed and concluded. She reminded everyone about the Municipal Finance Management Act (MFMA) which was a statute of Parliament that Members had to protect. It particularly dealt with the responsibilities of municipal officials. That was the basis for which the municipal council had been called before the Committee. The reflection in the media was that Mr Matlala had been suspended due to his exercising section 62 of the MFMA. Members as part of the legislature were alarmed that municipal managers would be punished for implementing the law and exercising their fiduciary duties as per section 61 and 62. Members needed all the facts in order to adequately deal with the case.
The Chairperson asked Mr Matlala to present his side of the issue. She asked him to deal with the matters as they were and not the sub judice matters.
Municipal Manager of Greater Tzaneen Local Municipality (GTM) presentation
Mr Matlala thanked the Chairperson and said what a rare privilege and honour it was to present his side of the story. As the accounting officer he took full responsibility for the two projects mentioned. The municipality appointed Tshiamiso Trading 135 for the two projects. There were 11 projects in the municipality and those were the only two that had one service provider appointed to complete them and where problems had arisen. He had received a report very early in March about the two roads. Unfortunately, the report had been misleading as it spoke about arithmetic errors which were errors that could be corrected in terms of construction and project management. Moreover, the mention of arithmetic errors in the report indicated that Mr Matlala needed to seek legal advice which he did. He received internal legal advice. He emphasised that the report was about arithmetic errors. The internal report was legal advice and did not resolve the problem. Thereafter, Mr Matlala instructed the legal advisor to get a procurement law expert to advise on the problem. The procurement lawyer gave an opinion that the issue at hand was fraudulent misrepresentation. Three weeks after receiving the legal opinion, Mr Matlala applied to the Polokwane High Court to set aside the contract. The MFMA Regulations gave him as the accounting officer power to act if there had been fraudulent activity during the bidding and execution processes. His powers delegated by Council also empowered him to act. Councillors wanted to debate and dictate to him to negotiate with the contractor when the legal advice given to him was that the contract was invalid; therefore negotiations could not take place. The only option available was to set aside the contract. He could not hide that there had been council reports that there should be negotiations with the contractor. Mr Matlala felt he had been suspended for refusing to negotiate with the contractor. He stood firm against the view that the matter could be resolved with the contractor.
The Chairperson asked who had instructed him to negotiate with the contractor even though that would have been contrary to what the law prescribed.
Mr Matlala referenced discussions held in the Political Management Team (PMT).
In response to the Chairperson asking him to list the members of the PMT, Mr Matlala said that the PMT consisted of the Mayor, the Speaker and the Chief Whip.
Mr Matlala said that when he submitted the legal opinion to the PMT, he perceived an attitude that did not want him to resolve the matter through a legal route. However, he insisted that it was a legal matter which could not be negotiated. He submitted a report compiled in July to Council which kept being returned to him until he had been suspended for misleading Council. His lawyers asked for reasons detailing the grounds for the suspension. That was not responded to. The only thing he was told was that he had been suspended for misleading Council. However the sequence of events demonstrated that he did not mislead Council. As the accounting officer, he needed to ensure that relevant structures had been put in place to ensure that procurement was above board. The current construction project had three engineers assigned to it. Two of them were at evaluation level who evaluated the project. At the bid adjudication committee level, there was another engineer Mr William Molokomme, Director: Engineering Services. Therefore, when the report came before Mr Matlala as the accounting officer, he had already ensured that the relevant structures had been put in place. The facts were that there had been fraudulent misrepresentation and that had been laid out in the report he gave to Council. In terms of the Public Audit Amendment Act (PAAA), Mr Matlala would have been guilty of material irregularity, if he had not acted.
Mr Matlala also referred to section 55 of the Local Government: Municipal Systems Act that detailed the responsibilities of the municipal manager. The municipal manager was responsible for communication between Council structures and political structures. Mr Matlala refuted that he had refused the councillor information — rather he had asked that the proper protocols be followed. As the accounting officer, Mr Matlala was the chief information officer both internally and externally. The information the councillor had looked for had been given to Mayor Mangena by Mr Matlala to pass onto the councillor.
The Chairperson asked who the councillor was.
Mr Matlala replied it was Mr Edney Ntimbane, Head of the Infrastructure Portfolio, who was present in the meeting. He had requested information from Mr Matlala who told him he would engage with Mr Mangena which happened. Mr Mangena submitted questions to which Mr Matlala responded in a detailed document.
In conclusion, on his suspension there was frantic approach to withdraw the matter from high court and to terminate the contract with the lawyers representing the municipality in court? Mr Matlala had the communication evidence to prove it. They had Mr Matlala removed so the contract could be resuscitated. Unfortunately for them the contract had already been set aside and a new bidding process needed to be conducted. People did not understand that the contract with Tshiamiso Trading 135 had been terminated permanently and all Tshiamiso Trading 135 could do was to submit to a new tender process.
The Chairperson asked if anyone linked to the municipality had a direct relationship with Tshiamiso Trading 135. She asked for the rationale for the termination of Mr Matlala. It appeared from the report that he acted in the best interest of the municipality as required by law.
The Chairperson commended Mr Matlala on the steps he had taken even though his actions may have received pushback. Those who tried to get him out would need to explain their actions and submit reasons for suspending Mr Matlala. The terminated lawyers would still need to be paid for their services by the accounting officer who had found the municipality in a huge financial crisis. It was odd that the lawyers who got a court order in favour of the municipality which saved it money were subsequently terminated. It was clear there was a bigger issue at play and she asked Mr Matlala what he thought it was —as the evidence was critical. Had Mr Matlala reported this to Provincial Treasury, MEC Makamu and the Auditor-General?
Mr Matlala explained that Administration reporting worked through structures so there were continuous reports. There was also an expectation on Administration to resolve matters. He stated without any fear of contradiction that the matter was resolved at an administrative level but became complicated when councillors got involved to resolve the matter as they saw fit. It had been easily resolvable upon application of the law. What complicated it was the effort to circumvent the law. He also did not understand why there had been a push for Tshiamiso Trading 135 to come back. Tshiamiso Trading 135 had conceded to seven of the municipality's prayers in its court papers that TT135 had committed fraud and the contract should be set aside. Despite that Mr Mangena insisted negotiations to contract with him again should commence. Mr Matlala stated for the record that after he won his case in the Labour Court, he told Mr Mangena that the Tshiamiso Trading 135 matter should be laid to rest.
The Chairperson asked the legal costs incurred in setting aside the contract with Tshiamiso Trading 135.
Mr Matlala replied that R650 000 had already been paid to terminate the Tshiamiso Trading 135 contract.
The Chairperson asked if that court order was handed down before Mr Matlala had been suspended.
Mr Matlala replied it had not. He explained it required two separate court processes. First, an application was made to set aside the contract. Secondly Tshiamiso Trading 135 was consequently terminated which were two separate processes. To set aside a contract, a court order ought to be obtained first as payment had been made to Tshiamiso Trading 135 which needed to be regularised. Thus, when the Auditor General asked for that money to be accounted for then the court order would regularise the payment.
The Chairperson asked if the court order included recovery of payments from Tshiamiso.
Mr Matlala replied that this had been included in the prayers in the court papers. He had also stopped a meeting scheduled with lawyers to discuss novation.
The Chairperson agreed that it was something a good accounting officer should do.
Mr Matlala added that he had been called arrogant for exercising the powers entrusted in him as the accounting officer. The entire process had been very hurtful and painful for him.
Mr B Hadebe (ANC) said the case was before the court so Members could not deal with the merits and demerits as it was sub judice. He asked about the procedure taken that resulted in his suspension.
The Chairperson interjected to state that the suspension had been resolved by the Labour Court which ordered Mr Matlala be reinstated. What was scheduled to be released later was the court’s reasoning.
Mr Hadebe said that ignorance of the law was no excuse. He asked Mr Mangena if council first took a decision to suspend Mr Matlala and then appoint an independent investigator afterwards. What had been the sequence of events?
Mr Mangena replied that council sent an intention to suspend to Mr Matlala who replied. Based on that response, council resolved to suspend him. The same resolution stated that within seven days of the suspension an independent investigator ought to be appointed.
Mr Hadebe cited the Local Government: Disciplinary Regulations for Senior Managers which were clear, explicit and unambiguous. The regulations prescribe that when an allegation of misconduct is brought to the attention of the executive mayor, the mayor ought to take the matter before council within seven days. Thereafter, council must satisfy itself that indeed there were reasons to believe an act of misconduct had been committed. After that an independent investigator is appointed to investigate the allegations within 30 days. After 30 days the investigator should produce a report to council who should determine if the allegations are serious. That would form the basis of reasons for a precautionary suspension. Even after the independent investigator report and council resolution to suspend, council cannot suspend without giving the municipal manager seven days to respond to the allegations giving reasons why the suspension should not proceed. Thereafter, another council meeting would be convened to consider the representation by the municipal manager and the report by the independent investigator. Once a decision to suspend has been arrived at it ought to be based on the following: the person may jeopardise any investigation into the alleged misconduct; endanger the well-being or safety of any person or municipal property; or be detrimental to stability in the municipality; or interfere with potential witnesses; or commit further acts of misconduct.
Mr Hadebe said the council did not follow the correct procedural steps to suspend Mr Matlala. He asked if MEC Mr Makamu had been informed within seven days of the non-procedural steps followed. It was incorrect to suspend and appoint an independent investigator afterwards. A suspension ought to be informed by what the independent investigator uncovered. Mr Hadebe asked Mr Mangena if that process had been followed as per the Act. If not, that raised questions of the intent behind decision to suspend Mr Matlala who was not given reasons for his suspension.
Mr M Hoosen (DA) asked that Mr Mangena be allowed to respond to Mr Hadebe’s questions first.
Mr Mangena referred to the sequence of events in the regulations and said council was convinced they had followed them to the letter. The only omission committed was not supplying Mr Matlala with reasons for his suspension. Council began by writing a letter of intention to suspend to Mr Matlala and asked him questions. He had to respond within seven days which he did. Upon receipt of his response, council sat and considered his responses and came to a reasonable belief that Mr Matlala’s responses did not convince council and they required more information. According to Mr Mangena, the guidelines stipulated that where there were allegations of serious misconduct, council ought to take the matter further by first suspending the person and appointing an independent investigator who would give council reasons if there should be disciplinary...
Mr Hadebe interjected to remind Mr Mangena of the correct order. First, allegations of misconduct are brought. Thereafter, a council meeting should be convened within seven days where council would consider the allegations of misconduct. In that meeting council may find reasonable cause of misconduct after which an independent investigator would be appointed to investigate the allegations.
Mr Hadebe reiterated that it was incorrect to appoint an independent investigator after requesting reasons as to why an accused should not be suspended. He asked if the allegations had first been tabled before the independent investigator had been appointed and produced a report confirming or dispelling the allegations. It was incorrect to suspend and then later appoint an independent investigator. On Mr Mangena’s account he wrote to Mr Matlala asking for reasons why he should not be suspended. Those reasons were subsequently taken before council and only later an independent investigator was appointed.
Mr Mangena supposed that it might have been an omission.
Mr Hadebe rejected the term "omission" and said it was a gross violation. He reminded Mr Mangena that ignorance of the law was no defence. Section 5.1 of the Regulations were very clear so its baffled Mr Hadebe how they failed to follow them. He read out section 5.1 so everyone was on the same page.
Mr Mangena believed that was the reason the court found that council had followed a flawed procedure.
Mr Hadebe confirmed that indeed there had been a gross violation. He failed to understand how senior council leadership could fail to comprehend this.
Secondly, Mr Hadebe pointed out that within seven days the disciplinary decision had to be communicated to Mr Makamu. He asked if Mr Makamu had picked up the flawed process that had taken place.
The Chairperson asked Mr Makamu if the matter was referred to him within seven days.
Mr Makamu replied that no report had been received.
Mr Hadebe did not want the Committee meeting to turn into a kangaroo court where the merits and demerits of the case would be dealt with but it was clear to him that the suspension was a witch-hunt. When councillors took an oath of office, they were given a package of legislation that governed local municipalities. A thorough and vigorous induction process was conducted to ensure councillors understood the legislation. Therefore, he did not understand how the executive mayor and the entire team including their legal advisors failed to follow the legislative procedure correctly. The matter did not have to go before the Labour Court for council to be told they had erred. Mr Hadebe did not want to conclude that it was a witch-hunt but wondered if there was any other explanation for the flouting of the law.
Mr K Ceza (EFF) referred to the bouncers hired by the municipality. He pointed out that the municipality already had private security, yet they had still hired bouncers. What was the rationale for hiring bouncers when there was a security company conducting similar services?
The Chairperson asked Members to restrict themselves to the suspension of the municipal manager as the other issues would be dealt with afterwards.
Mr Ceza asked Mr Mangena if he held a political position in the municipality and within his own political party. He asked because it had often been encountered in municipalities that a mayor would be a party regional chairperson and go on to influence a meeting that a certain accounting officer should be removed. He asked Mr Mangena how he thought the influence of the two roles would contribute to the recalling of the municipal manager. He asked what the current working relationship was with Mr Matlala so Members could get a sense of the impact the issue has had on service delivery. Lastly, he asked why Mr Mangena advise Mr Matlala not to take legal action on the irregularities he discovered.
Ms M Tlou (ANC) was interested in the name of the independent investigator and how much the municipality spent on the investigation. How much had the municipality paid for the Codesa and Mulati projects before the termination of the contracts?
Mr G Mpumza (ANC) reminded the municipal council members that they had all taken an oath of office promising that their conduct would be above reproach and that they would always provide leadership and accountability. An incompetent decision was taken by council that flouted regulations and the law which were tools that enabled service delivery to the community. Did they still think they were up to the task? Could the community still hold confidence in them? How many other decisions had been taken that were contrary to the law? He felt there was something Mr Mangena was not telling Members.
Mr Mpumza pointed to the allegations but the mayor had failed to state from where they had arisen. Who had informed Mr Mangena that Mr Matlala had not acted instantly? From where had the report he received arose to trigger the decision to appoint the independent investigator and to suspend Mr Matlala? He posed the same question to Ms Dikeledi Mmetle, Speaker of Council.
The law gave the accounting officer and chief financial officer fiduciary duties. Mr Mangena knew very well that as public representatives, council had to stay far away from procurement so why the interest in this one? Why did council want to interfere in the administrative action taken by the municipal manager in taking the contract to court? That amounted to political interference. Why was there political interference when a legal opinion was sought? He also referred to the protests noted by Mr Mangena and asked what triggered those.
Mr Hoosen clarified the story as told by Mr Matlala. Mr Matlala had identified contracts that went from R37 million to R57 million which in his view was fraudulent. Mr Matlala brought his fraud findings to the attention of Mr Mangena who suspended Mr Matlala instead of supporting him to terminate the fraudulent contracts.
Mr Matlala confirmed this.
Mr Hoosen said from his experience the only inference one can draw is that someone had something to benefit; otherwise they would not hurriedly remove the person who was trying to do the right thing. He asked Mr Matlala if he had the same suspicions.
Mr Matlala replied yes
Mr Hoosen asked if Mr Matlala was aware of any relationship or any meetings between the contractor and any councillor.
Mr Matlala replied that he was not aware of this.
Mr Hoosen referred to the attempt to terminate the contract with the law firm with the hope that the case before the court would fall apart. Mr Hoosen asked for the names of those who made such an attempt.
Mr Matlala replied that he had the information but felt it was premature as he had his own on-going investigation which would result in a particular action based on the same facts.
Mr Hoosen advised that he let the police investigate.
The Chairperson said Mr Matlala stated he had evidence and should therefore share it and it will be given due confidentiality.
Mr Hoosen suggested the matter be reported to the Hawks to investigate as a possible crime had been committed. If not, the Members could be complicit in the crime if they did not act. He turned to Mr Mangena and said that Mr Mangena had had all the information on the potential fraud. However, Mr Mangena had been the one who led the initiative to suspend Mr Matlala. Mr Mangena did not follow the correct procedure to suspend and he admitted that errors had been made.
Mr Hoosen wanted to know how Mr Mangena would directly benefit from getting rid of Mr Matlala. Did he perhaps have an engagement or met with the company? Did he know who they were? Did Mr Mangena get any direct benefit or know anyone who received a benefit from Tshiamiso Trading 135?
Mr Mangena replied that he took an oath to lead any resolution made by council. He asked that he speak to the issues at a later stage.
Mr Hoosen requested that his questions be answered directly. Simply put: had Mr Mangena ever had any direct dealings with the company Tshiamiso Trading 135 and had he met with them at any stage?
Mr Mangena replied that the company owner was a resident of the municipality – he was born and bred there. He admitted to knowing him as he knew most of the people.
Mr Hoosen asked what his name was.
Mr Mangena replied that his name was Bruce Mhlaba.
In response to Mr Hoosen asking if Mr Mangena had met Bruce Mhlaba, Mr Mangena said yes.
Mr Hoosen asked how many times they had met.
Mr Mangena replied that he could not recall the number of times.
Mr Hoosen asked if they had met more than five times.
Mr Mangena replied that he could not confirm the number of times he had met with Bruce Mhlaba.
Mr Hoosen stated the two could not have met only once.
Mr Mangena replied that he was resident of Tzaneen although he had relocated therefore Mr Mhlaba would meet and greet the Mayor occasionally when he travelled to Tzaneen. The Mayor denied any direct benefits between Mr Mhlaba and himself. He would later explain the situation to clarify matters for Members.
Mr Hoosen asked Mr Mangena if he ever had discussion about the Codesa and Mulati contract.
Mr Mangena replied no.
Mr Hoosen asked if the two discussed the suspension of Mr Matlala as a result of a fraudulent contract finding. He asked for a direct answer on whether Mr Mangena, anyone he knows, anyone of his political party or any family member received a financial benefit from the company.
Mr Mangena asked the Chairperson if he could reserve that question not to be direct.
Mr Hoosen asked for a ‘yes’ or ‘no’ answer to his very simple and direct question. He put the question to Mr Mangena again.
Mr Mangena conceded.
Mr Hadebe asked the Mayor and other leadership to respond to the other questions posed to them.
Mr Cromwell Nhemo, Chief Whip of Council, confirmed that council flouted the procedural aspects in the Regulations in the suspension of Mr Matlala. The Mayor stated council awaited the court’s reasoning for the judgment. The judgment had three orders. The municipality had to carry out the last of them when they get the reasons why the court made its finding. Leadership took the responsibility to convene the municipality’s lawyers who would give them a report on what transpired in court. Part of the reasons were that the procedural sequence was correct but council erred in how they coined the matter. The intention to suspend had not correlated with the council resolution and council had not been explicit why they were suspending Mr Matlala. It was council who agreed there was a case to investigate hence they asked to receive a report from the independent investigator within 30 days which would be ready by 12 December 2019. The name of the independent investigator was Mr Tsatsi, a prominent lawyer whom the council always relied on. On the amount of monies paid, he was not sure, but administration would reply.
Mr Nhemo explained that on 11 September Council received a Parliament delegation from the National Council of Provinces and the two roads were identified as the issue had been making its rounds on social media. After the site visits, the NCOP delegation advised council that they speak to the service provider to complete the two roads (Mulati was at 95% completion and Codesa at 75% completion) for service delivery to commence. That would put an end to the protest action and attacks on councillors. On that basis, council decided to negotiate with Tshiamiso Trading 135 to complete the roads. There was agreement that the administration should lead the process in dealing with that aspect as councils’ responsibility was to exercise oversight and service delivery took priority. The roads have since been washed away when the rains began, and they would need to be started from nought. That was the reason behind the push to negotiate with the service provider who took advantage of council’s failure to thoroughly read the documents.
Mr Nhemo said the court application and terminations were not reported to council by Mr Matlala. This was why council felt it needed to investigate due to the failure to report by Mr Matlala.
Mr Edney Ntimbane, Head of Portfolio: Infrastructure, restated that Codesa road was 75% completion and Mulati was at 95% completion. The report from Mr Matlala which council referred to was not a report but an application to court to rescind Mr Ntimbane's decision to appoint Tshiamiso Trading 135 as service provider. According to Mr Ntimbane, council was surprised that before the court could rule, Mr Matlala terminated the contract with Tshiamiso Trading 135. That was the concern that council had. He confirmed that the NCOP delegation convened and pleaded with council to seek better remedial action. Further, council was concerned as there was no service level agreement and Mr Ntimbane was unsure how the service provider had been signed without his signing a service level agreement.
On negotiations with the contractor, he felt it was improper for a municipality to terminate a project that was at 95% completion. A concern was the municipal manager indicated to council that he became aware in July or August that there was a problem. Mr Ntimbane had an email dated 14 February from the consulting engineer in which the municipality had been alerted that there was a challenge on the bill of quantity (BOQ).
The Chairperson asked to whom the email had been sent.
Mr Ntimbane replied that it had been sent to the municipality, the department.
The Chairperson asked if it was sent to the technical manager and Mr Ntimbane said yes.
The Chairperson had difficulties in understanding municipal department directors communicating directly with council.
Mr Ntimbane replied that they were not communicating with council. When council wanted to intervene, Mr Matlala indicated that he became aware of the challenge around July contrary to the email sent to the municipality on 14 February. It stated that if the contractor began to establish site, the municipality would be bound to use the rates in the documents when the contractor claimed. A meeting was requested in the email to resolve the issue. Mr Matlala was untruthful about realising the problem only in July/August when in fact it had been brought to his attention in February. If he had acted by terminating the contract in February when first brought to his attention, the municipality would have saved a lot of money.
Mr Ntimbane voiced his personal concerns about the communication protocol. If a matter arose, should he communicate directly with the department director concerned or should he go through the Mayor? In his view, if they failed to reach an agreement he could go directly to the Mayor, and the director could address the municipal manager. He felt it was improper for him to go through the Mayor to communicate with the municipal manager for every small issue he had with a director in his department. The new governance model allowed him to discuss any problem with a director and if they failed to reach an understanding then Mr Ntimbane could escalate the matter to the Mayor who would take it to the municipal manager. Thus, Mr Ntimbane was surprised when Mr Matlala stopped the director from answering Mr Ntimbane’s questions. Mr Ntimbane received the information around July and the director had already been to National Treasury. He told Mr Ntimbane about the problem in Mulati and indicated he had been to National Treasury. Mr Ntimbane asked why he went to National Treasury before informing him.
The Chairperson remarked that there seemed to be a lot of interference. She knew that for accountability the director reported to Mr Ntimbane as an Exco member and Head of Portfolio but there were other protocols meaning he did not have to consult Mr Ntimbane before approaching National Treasury. He had to approach the municipal manager / accounting officer as the matter was purely administrative. The Chairperson said there were issues with communication protocol and council members should not communicate in a manner that would amount to interference as the director was accountable to the accounting officer. Exco was responsible for oversight which was different from administration.
The Chairperson said the issues of communication protocol and administration could be dealt with among themselves.
The Chairperson reminded Mr Nhemo that it cost money for lawyers to explain a judgment. She did not understand why lawyers were required to explain a straightforward judgment. The explanation could even be requested in writing to minimize the legal fees. Lawyers charged R4000 to R5000 and with every case its either the parties complied with the judgment or appealed. In this case the municipality could not even appeal on procedure and the attempt would be a further waste of money. She advised the parties find an amicable way of resolving the matter.
The Chairperson advised that the officials should be allowed to do their jobs as per the law. Raising an issue with the municipal manager terminating the contract without informing council was a non-issue as he was empowered to do by law. This was purely administrative in law which required the municipal manager to merely notify council for its information.
The Chairperson stated that reference to the timeline such as February or June was getting into the merits and demerits of the case which would have been argued in court and the court took a decision taking all relevant facts into consideration.
The Chairperson turned to Mr Mangena’s admission that he received financial benefit from the contractor, stating that his judgment was clouded.
Mr Hoosen said he knew who received financial benefit from the contractor.
The Chairperson said there was a risk for the municipal council to be biased when dealing with the matter, clouding their judgment — hence the hanging on. The NCOP committee could have given its advice not knowing the entire process had been conducted contrary to law. She did not think that NCOP Committee Chairperson, Mr Tshitereke Matibe, having known all the facts would still offer the same advice on an illegal process. Nonetheless, Members would receive the report to thoroughly understand the matter. Secondly, it was oversight week and the Chairperson, staying in Greater Tzaneen, might visit the sites.
Turning to Ms Mmetle, the Chairperson reminded her she was the council chairperson and expressed her dissatisfaction that an MP, Mr Hadebe, had to acquaint them with the law. When council members assumed office, it was their responsibility to acquaint themselves with the rules and regulations. One had to read the relevant legislation to understand their mandate. She asked the Speaker how she had presided over council. She referred to the legal costs spent to date on a clear straightforward matter. Why was there a mandate to terminate the services of a legal firm that was doing the right thing but a push to reinstate the fraudulent contract? It seemed council was acting in the interest of the contractor instead of the community.
The Chairperson said the finances needed to be addressed because the Auditor-General would issue a certificate on the Speaker and council and if it were the entire council that meant the money would be deducted from the chief financial officer and municipal manager salaries. That was the intention of the new Public Audit Act amendment. The municipal manager did not require a council resolution to act as he had acted as the law mandated him to take such steps. It appeared that municipal managers that insisted on following the law were being suffocated. Municipalities were the sphere of government with the most disregard for the law. Members of Parliament had a duty to protect the laws Parliament had enacted. From what had transpired before the Committee today, Mr Hoosen of the DA and Mr Ceza of the EFF could issue statements condemning what happened to the municipal manager of Greater Tzaneen.
The Chairperson clarified that an ‘omission’ and ‘ignorance of the law’ where two different things and Mr Mangena incorrectly viewed it as the same thing. The Mayor's view that it was an omission when there had been complete disregard of the law enacted by Parliament and Members would protect that space. Ms Mmetle as Speaker was the custodian of council. She wanted to know what Ms Mmetle had done when those shenanigans had taken place under her watch. The MEC, Mr Makamu, might disagree with the stance taken by the Committee but if it meant dissolving council then it should be dissolved. The implication of dissolution meant council members would not receive their salaries. They would have to re-campaign. Perhaps then council members would start to take the matter seriously. There was a reason section 154 of the Constitution states that national and provincial governments must support and strengthen the capacity of municipalities to manage their own affairs in order to curb issues like this. Anarchy could not be allowed to continue under the Committee’s watch as it was the communities that suffered. The poor officials did not have the resources of the State at their disposal like council which had the freedom to litigate as much as it wanted. The environment in local government was hostile and no one wants to work in local government because of this reputation. The reputation was that local government was career limiting with politicians completely disregarding officials who did not dance to their tune and were shown the door. Anarchy would not be allowed under the Committee’s watch. Ms Mmetle needed to explain why the law had been broken under her watch.
Ms Mmetle replied that as the Speaker and council chairperson her role was an oversight one as per the Municipal Systems and Municipal Structures Acts and the new Governance Model. She reiterated what Mr Mangena and the other councillors had said. She pointed out that Mr Matlala said 11 roads had been "appointed" when he was presenting his case and in carrying out her oversight role, she was waiting for the report to come so she could check the progress of completion of the roads. The current matter had come to the attention of the political team in July when they realized there were many protests on the ground.
Ms Mmetle said the administration had erred in continually meeting with the community without council’s knowledge. Council had only been made aware at the 11th or 12th meeting by which time things had already been polluted on the ground. Ms Mmetle was responsible for public participation and was never informed of any meetings scheduled with the community. Had she known she would have attempted to resolve the matter sooner. According to her, the root of the problem was the ignorance of the consultant’s advice when it was first discovered that the bill of quantity had dramatically increased. As the Speaker, she wanted to know when the problem had been discovered. The municipality had been restructured into four clusters for better management. Therefore, she wanted the head of the cluster to tell her what the problem was and subsequently discovered a document that the municipality had been made aware of the problem on 14 February 2019. The consultant wrote a written report to council warning them about problems with Mulati and Codesa and advised that they be speedily dealt with. It was problematic that the consultant employed by the municipality was working against the municipality when the matter went before court.
Ms Mmetle said that the court ruled against the municipality in the case of the municipal manager. After Mr Matlala had been issued a letter of suspension, he interdicted the municipality, so the municipality sought legal counsel to represent its case. They followed the procedure but erred in suspending Mr Matlala before receiving the report from the independent investigator. However, the court did not rule against the case the municipality had against Mr Matlala; rather, the court ruled on the procedural matters. The fact that the municipality was not ordered to pay Mr Matlala’s costs was an indication of the court’s leniency towards the council.
Mr Hadebe politely interjected to remind Ms Mmetle that it had already been established that the process was procedurally flawed. Members would not deal with the merits of the case. By not following procedure the process had been rendered null and void meaning there could be no justifications.
The Chairperson said if the suspension had been procedurally unfair then Mr Matlala could resume his duties. The judgment was not in council’s favour and that was why Mr Matlala was back at work. She did not want to deal with this issue again. The Chairperson still required an answer why the Speaker allowed the law to be broken under her watch.
Ms Mmetle replied that she was not trying to justify council actions but was merely trying to echo her sentiments…
The Chairperson interjected clarifying once again that the judgment was clear and Mr Matlala had resumed his duties. The judgment was against the municipality and in favour of Mr Matlala. Ms Mmetle made it out as if Mr Matlala should not be back at work. The Chairperson rejected this as Mr Matlala had approached the courts when he had been unfairly treated at work. The court agreed that his suspension had been unprocedural and illegal and ordered him to be reinstated. Both the Mayor and Chief Whip admitted to an "omission" albeit it was a flouting of the law – a complete disregard of the law.
Mr Hadebe added that the Speaker was the council's presiding officer who was responsible for commanding control of council and compliance with the law. These flawed processes should not have happened if Ms Mmetle had adhered to her role correctly. This Committee was not dealing with the merits of the case but with the procedural process that had not been followed.
Ms Mmetle refused to respond.
The Chairperson continued to ask Ms Mmetle if she allowed unprocedural processes to happen under her watch as Speaker of Council.
Ms Mmetle replied that there was a different interpretation. The court could rule against or in favour because her interpretation was informed by her experience in local government.
The Chairperson remarked that this did not assist the Committee in any way.
Mr Hadebe asked if Ms Mmetle honestly believed that the process leading to the suspension of Mr Matlala had been followed correctly.
The Chairperson said experience in local government was irrelevant and asked Ms Mmetle to deal with the issue put to her. The Chairperson repeated her question to Ms Mmetle. Why had she not exercised the oversight she was responsible for when some councillors had received money from the contractor?
Ms Mmetle replied directly that it had been an oversight shortcoming by the Speaker. After receiving the invitation to this meeting, Ms Mmetle gathered information to present to the Committee which would assist Members when taking a decision.
The Chairperson emphasised that it had been shortcomings in Ms Mmetle carrying out her oversight role.
Mr Mpumza noted that Ms Mmetle admitted that she presided over a Council that made irregular decisions. Was she admitting that she presided over a Council that took extremely unsound legal decisions because of her shortcomings?
Ms Mmetle asked if that was a direct question that needed an answer.
The Chairperson responded in the affirmative.
Ms Mmetle refused to say yes or no and tried once again to refer to the court judgement.
The Chairperson said she could not read one paragraph in a court judgment in isolation because she would be misled. The court judgement could be sent to Members at a later stage. She cautioned Ms Mmetle to answer Mr Mpumza’s direct question.
Mr Mangena said the lawyers were yet to debrief Council on the interpretation of the court judgment. He said Council had admitted that there had been procedural flaws but said they had correctly followed the sequence of events leading to the suspension.
The Chairperson said future suspensions should only take place after an investigation had been carried out.
Mr Ceza asked for a response to his questions.
Mr Matlala replied that he had a very good working relationship with Mr Mangena.
The Chairperson asked him what went wrong.
Mr Matlala said nothing between the two men went wrong and emphasised that their relationship was good.
The Chairperson asked him who the problem was.
Mr Matlala replied that Ms Mmetle and Mr Nhemo were a parallel power with their own divergent agenda that resulted in the current problem. The Executive Committee had been rendered ineffective.
The Chairperson said the Political Management Team (PMT) had replaced the Executive Committee yet the PMT was not legislated anywhere.
Mr Matlala repeated his sentiments. He would not be surprised if he got suspended again based on the utterances and undertones in the meeting. He asked the Committee to be aware when it conducted its proactive intervention. He flagged the statement by Council that a lawyer would be coming to give a report.
The Chairperson asked Mr Mangena to respond to Mr Matlala’s statements.
Mr Mangena replied that in terms of the working relationship, looking at the work that had been done in the municipality and the progress made, he supported Mr Matlala on several things and their relationship was not bad. He said the interference in terms of the suspension was political. He had played his role as a mayor and dealt with things that were in line with Council resolutions and pleaded with the Committee not to view him as a mayor who had relegated his responsibilities. It was a fact that Council made certain resolutions. He gave the example of the 28 November court ruling which stated the respondent was ordered immediately to allow the applicant to resume his duties as a municipal manager. Despite that court ruling, Council was still in disagreement.
Mr Ceza asked why Council was still arguing when the court had handed down judgment on the matter.
Mr Mangena replied that they were arguing whether Council should wait for the court order to be sent to them in writing before reinstating Mr Matlala. Mayor Mangena was raising the issue. He found it unfortunate that Mr Matlala spoke on the issues as he had observed them. The Mayor felt it was important to state the issues for the record so that the Committee could not say it had not been informed.
The Chairperson said the Committee would not travel to the municipality; instead the Powers and Privileges of Parliament Act would be invoked.
The Mayor said he supported the other procedures Council had carried out, whether they succeeded or failed, as those were Council resolutions. However, he referenced an example of a council resolution that had implications for what had transpired today. Ms Mmetle was a former mayor. The letter sent from the Committee addressed to Mr Mangena had been clear about who was to attend the Cape Town meeting. However, Ms Mmetle invited the Head of the Portfolio without Mr Mangena’s permission. Mayor Mangena tried reminding Ms Mmetle that it was the Executive Committee Members who were accountable to the Mayor and the cost of the trip would be paid for by the Mayor’s office. Despite this, Mr Mangena was not aware of how the trip had been paid for.
The Chairperson told Mr Mangena to take the required action where he should. He needed to lead as the law had placed roles and responsibilities on him.
Mr Hadebe said the Committee was being abused because Mr Mangena knew his powers, fiduciary responsibilities and duties. It was unacceptable for Mr Mangena to complain to the Committee that council members travelled without his permission. It should have been addressed and sorted out prior to the trip. It appeared Mr Mangena was not in charge of the municipality. The buck stopped with the Mayor. Did he understand his fiduciary responsibilities and delegated powers? Internal matters ought not to be brought to this Committee as if Mayor Mangena could not take charge.
The Chairperson said it was good the Mayor raised the issue for Mr Makamu to note as well.
Mr Mangena said he raised the issue because of how the questions from Members had been posed. It was his first time appearing before the Committee and he gathered that Members expected robust and frank answers. It would not be appropriate for the municipality to return home with the continuation of certain wrongdoings. It is not that he did not have the power, but decisions were made collectively so when council argues about the meaning of ‘immediate’ then this Committee cannot say that it is the Mayor's power.
The Chairperson interrupted to remind the Mayor that he was Exco Chairperson and the Act was clear on the roles. The structure of the Political Management Team (PMT) was an arrangement which was not legislated for and she raised that point deliberately. If the finances of the municipality were squandered it would be Mr Mangena who would ultimately be accountable. Delegation was very clear and the reference to ‘managers’ was a reference to section 56 and 57 managers in the Municipal Systems Act. The agenda items had been communicated so only the relevant people needed to travel. The Chairperson was glad Mr Makamu was aware of the issues and told Mr Mangena not to be apologetic in his leadership. What Mr Matlala had revealed indicated that the institution was dysfunctional, and it would be Mr Mangena who would have to account for that fact and not Ms Mmetle as the Speaker. Perhaps Parliament needed to conduct an induction in Greater Tzaneen to educate all players on their legislative roles and responsibilities.
Mr Mangena said that the Municipality was doing very well despite the recent troubles. The work was indicative of the progress the municipality had made and continued to make. He stated he would lead with more authority and thanked Members for inviting the municipality, for clarifying and cementing the legislative roles and responsibilities of the different players.
Mr Hoosen pointed out that there was a lack of urgency about fixing the roads and asked what was being done about completing them. The issue at hand had nothing to do with the court case as it became clear when the Mayor confirmed there were councillors receiving kickbacks from Tshiamiso Trading 135 which was the motive for what was going on.
The Mayor interjected that he never said individual councillors. He simply replied ‘yes’ to Mr Hoosen’s question.
As a result of this retraction, the Chairperson put Mr Mangena on the spot and asked who had received kickbacks from the company.
Mr Mangena asked if he could give the details to the Chairperson later.
Mr Hadebe corrected the wording from ‘kickbacks’ to ‘benefits'.
Mr Ceza asked Mr Mangena to include the nature of the benefits in his letter to the Chairperson.
Mr Hoosen said nobody should be getting benefits which he also regarded as a kickback. There was no such thing as a free lunch. The people benefiting from the contract in the municipality were the ones trying to stop the person who had detected and put an end to the fraudulent activity. He requested that Mr Makamu and the Speaker act to bring to task the individuals who had received benefits.
Mr Hadebe asked for a report on the status of the roads including the variation orders on the bill of quantity.
The Chairperson said the Chief Financial Officer had not answered about the money spent on legal costs. Even though there had been no cost order against the municipality, the exercise still cost a lot of money which amounted to fruitless and wasteful expenditure. Additionally, how much had been spent on the case instituted by Mr Matlala against the service provider? She asked because there were Council members who wanted to cancel the contract with the lawyers. This would result in further wasteful and fruitless expenditure.
The Chairperson said the Mayor raised financial delegation in the municipality. Could politicians take a trip to China with the service provider? There were heads of portfolio committees in the Greater Tzaneen municipality who had travelled with service providers. Mr Makamu should take note that this was happening in the municipality. Service providers would ask councillors to go on trips to China. The code of conduct for councillors attached to the Act was clear. When one decided to become a councillor, one knew the salary. The Chairperson as a public representative knew she could not have any business interests which was a conscious decision. Service delivery was compromised when councillors became biased from receiving benefits from service providers. Lawlessness thrived in such an environment. Councils should use the disciplinary code to act against guilty individuals.
The Chairperson asked for a report on the possible termination of the lawyer contract.
The Chairperson said she would visit the road sites the following week which was oversight week and she would go with Mr Makamu for protection. The traditional leaders would also be visited for input on the matter. It would give the Chairperson an opportunity to assess the claims made in the meeting about the state of service delivery in the municipality.
Ms Palesa Makhubela, GTM Chief Financial Officer, began with the project costs incurred. The Mulati road was tendered for R26 million and the payments to date were R15.6 million at contract termination when the road was 75% complete. The tendered amount for the Codesa road was R9.2 million and payments to date amounted to R6.5 million. Before termination, R8 million still sat with the municipality as unpaid for the two roads. For unpaid work at the time of termination, the lawyers had called a meeting on 5 December and no one was comfortable proceeding without legal advice. There were subcontractors from the community who were protesting who had not been paid and did not have a legal contract with the municipality but only with the service provider. The termination of the contract with the service provider meant the subcontractors would not get paid. That was why the lawyers had been called to advise on the matter.
The Chairperson asked what the lawyers advised.
Ms Makhubela replied that the meeting had been cancelled by Mr Matlala.
Mr Matlala explained that the lawyers contacted him on Monday 2 December expressing non-comfort about the scheduled meeting because it was their view there could be no payment to the subcontractors because the municipality did not have contracts with them. The subcontractors needed to pursue the service provider for payments and not the municipality. However, Mr Matlala referenced a MISA report. When Mr Matlala had been suspended, he gave the director an instruction to finalize the Municipal Infrastructure Support Agent (MISA) proposals which was a report to council on how the subcontractors could be paid. Council dismissed the report. A lot of work had been done with MISA, but the report had never seen the light of day. The subcontractors thus needed to approach Tshiamiso Trading 135 for payment.
The Chairperson said the CFO, Ms Makhubela, was the acting municipal manager.
Ms Makhubela replied that she only acted for three weeks. She had not seen the report. MISA had a view on how to pay the subcontractors, but nothing could be paid according to the lawyers which she found contradictory. That was why she wanted the lawyers to hold a meeting to address everyone as some meetings took place behind closed doors. If the lawyers attended the meeting their faces would be seen. MISA was an extended component of Cooperative Governance, Human Settlements and Traditional Affairs (COGSTA) and could not be a decision-making body. MISA could not override the lawyer’s decisions.
Mr Hadebe asked for clarity on who terminated the contract because when a court terminates a contract it grants relief and it orders what should happen.
Ms Makhubela said the matter was still before court.
Mr Hadebe asked then why she said the contracts had been terminated.
Ms Makhubela said the lawyers wrote termination letters to the contractor’s lawyers.
Mr Hadebe said a contract with the supplier was legally binding and could only be set aside by a court. The contract could only be set aside by approaching a court. He asked who terminated the contract.
The Chairperson said the contract had been terminated by Mr Matlala within the terms of the contract. Once a contract had been terminated, the affected party could approach a court for recourse. Mr Matlala had already explained there had been irregularities and tender fraud which invoked a cancellation clause in the contract. The concern was that there had been political settlements where the Expanded Public Works (EPW) people had not been paid. Lawyers had been called to a meeting which Mr Matlala said they felt uncomfortable to attend. The matter was still before the court; however, Mr Matlala was able to terminate the contract legally through the cancellation clause. The matter before the court would address the details such as quantum of what had to be paid and damages. In the meantime, the contract remained terminated. The R8 million in invoices would be affected and would not be paid out until the court hands down judgment. Tshiamiso Trading 135 agreed in court papers that there had been fraud in the contract which was criminal. There was still interference because until the court decided what relief would be granted there could be no tampering with that arrangement.
The Chairperson said that one was mindful of the EPW workers but that was a consequence. Whatever was due and payable to them would be paid once the court had decided. Alternatively, something the Chairperson found unlikely, the court could rule that Mr Matlala terminated the contracts unlawfully and would reinstate the contracts which would restore everything. The court could concur with Mr Matlala and grant relief. The fraud needed to be followed up because it was criminal activity and a criminal case needed to be opened which would be investigated by the Hawks and the South African Police Service (SAPS) concurrently with the civil matter.
Mr Hadebe accepted the explanation but strongly felt that a contract could only be set aside by a court despite a general cancellation clause in the contract. It was like how an eviction order was required from court before evicting people who had invaded a piece of land. He was subject to correction but there were many cases like the current one where a contract could not be unilaterally terminated. A court needed to determine damages.
The Chairperson said that some contracts contain a cancellation clause and it was not necessary in every case to approach a court. An arbitration clause could also be included. There were no hard and fast rules. Mr Matlala was within his rights to terminate the contract upon discovery of the fraud and misrepresentation. The municipality could have interdicted Mr Matlala but opted for court proceedings as it knew he was right.
Turning back to Ms Makhubela, the Chairperson asked her to state how much had been paid to Lebea & Associates Attorneys to defend the Mayor in the matter against Mr Matlala? How much had been paid to the lawyers for proceedings against the service provider?
Ms Makhubela replied that the lawyers appointed to defend the interim interdict against the suspension had not yet been paid as the matter had only recently been heard on 28 November. After the court judgment is released, the attorney will explain each clause to council and would be paid after that. Council had approved rates for lawyers. The lawyers dealing with the contract dispute had been paid about R1 million.
The Chairperson asked why the municipality wanted to terminate the services of lawyers that had already been paid R1 million. The chairperson asked the Mayor why Council wanted to remove lawyers that had already been paid over R1 million before they had completed their mandate. The Chairperson asked Ms Makhubela who had been the acting accounting officer what the rationale was.
Ms Makhubela put on record that emails were sent through the legal office saying the MISA could find a way to pay the subcontractors, but the internal legal manager said due to the pending court case, Council should not take advice from another organ of state. Ms Makhubela explained that as the acting municipal manager. That was the reason the lawyers had been called for the 5 December meeting to explain everything. She did not understand everything because she was acting in the position of municipal manager.
The Chairperson said the fact she was acting in the position was no excuse as she had assumed full responsibility for that period. It was up to her to contact Mr Matlala on matters she needed information on. If Mr Matlala’s suspension prohibited him from speaking to any officials, then Ms Makhubela should have asked Mr Mangena for permission to contact Mr Matlala to get information.
Ms Makhubela replied that she was working on the advice of the legal manager and repeated her previous utterances about MISA. She had never met the lawyers before and had seen the documents for the first time at the suspension of Mr Matlala.
The Chairperson asked how she paid the lawyers as the CFO if she was unaware of the matters. Did Ms Makhubela pay the lawyers without viewing their contracts? The municipal manager was not responsible for paying service providers.
Ms Makhubela replied that legal documents were kept confidential and only the amount due would be shared with her.
The Chairperson asked Ms Makhubela if that was seriously how she did her job. Lawyers withheld details and Ms Makhubela would simply pay? Was that how Ms Makhubela dealt with the municipality resources?
Ms Makhubela replied that Mr Matlala could answer because that was the sign off she got. The court orders and details were not contained in the invoices. The accounting officer calculated everything to be paid.
The Chairperson asked Mr Matlala if that was how he ran the municipality.
Mr Matlala replied that there were management meetings where matters were discussed including the decision to challenge Tshiamiso Trading 135.
The Chairperson asked if there were minutes for those meetings.
Mr Matlala replied that the minutes were available.
The Chairperson asked if Ms Makhubela had been in that meeting.
Mr Matlala replied that he needed to confirm but she attended most meetings.
The Chairperson said the CFO could not be absent from a management meeting as a section 56 manager.
Mr Matlala clarified that he made it compulsory for all executive directors to attend management meetings on Mondays. Mondays were non-negotiable in terms of management meetings. He added that before report went before the executive committee or council, management spent entire days looking at all the items that were going to be read by the executive committee. The executive committee contained executive directors until it got to Council.
The Chairperson said in her understanding the Council agenda items had comments from the directors, technical service and CFO which was standard procedure.
Mr Matlala confirmed that was standard practice. There were two other procedures included in how reports went through the governance structures. These included the financial and legal implications because decisions taken by the executive committee and council needed to be sound. He said there was no one in his executive management team that did not know about any issue.
The Chairperson decided to close the matter on that note. Mr Matlala would submit his report with the financial implications and Ms Makhubela would retrieve the payment advice. Members still had questions on service delivery.
The Chairperson asked for a response to Mr Ceza's question about security and the payment to bouncers for two months of R700 000 and then R1 000 000 for a similar service. There were two security contracts and the Committee was told the municipality needed extra security to stop angry residents and service providers from protesting. It was a sign that the municipality had to protect itself from the community that elected it. The municipality had not adequately communicated with the community. She referred to the disturbing comment by Ms Mmetle that Mr Matlala had met with the community without the politicians when that was not his job. The Chairperson knew the officials met the community in the absence of the politicians.
Mr Matlala replied that the Chairperson was correct that the municipal manager should not meet with community members which was a political role. However, the meeting he had was not with the community. He met with the subcontractors to explain that the municipality had a problem with the Tshiamiso Trading 135 contract which it was planning to terminate.
In response to Mr Ceza, Mr Matlala replied that high level security had been hired not bouncers. On 12 September Mr Matlala was nearly assassinated in council by a group of people he described as ‘thugs’. He believed people in the municipality were behind the attempt on his life. People had entered with petrol presumably to burn him alive. SAPS and municipal police were present when the people stormed Council.
The Chairperson asked if the security was outsourced or insourced.
Mr Matlala replied that it was outsourced. After the storming, Mr Matlala, as the accounting officer acting responsibly, decided to hire more security to create order and stability before someone was killed. The extra security hired brought order and stability to the municipality and all incidents of intimidation had stopped. The contractor was using subcontractors to intimidate officials.
The Chairperson asked what had been done with the ineffective security firm that almost resulted in Mr Matlala’s harm.
Mr Matlala asked to share with the Committee the report on the dangerous incidents that took place on 12 September. The decision to hire more security was necessary as employees in the municipality did not feel safe. He also had to hire his own personal security because of the nature of the environment in the municipality which was not a situation he could trust.
Mr Ceza asked Mr Mangena to comment.
Mr Mangena did not have much to add except that everyone had witnessed the incident. Mr Matlala informed the Mayor that he would appoint high risk security. The assessment was that the situation was under control and stability had been restored.
Mr Ceza asked how many security companies were currently employed in the municipality.
Mr Matlala replied that the security contract was reviewed on a monthly basis and the high-level security had only been employed for two months. The narrative of 'upset community members' was used to push malicious intentions.
The Chairperson asked if community members were protesting over the Tshiamiso contract that councillors had received benefits from.
Mr Matlala confirmed. The contractor was working with someone to rile up community members to storm the municipal offices.
Ms Makhubela added that when she was acting municipal manager the same people went to intimidate her.
Mr Ceza put on record that the case study of Greater Tzaneen should demonstrate how tendering had caused people to conduct themselves as they had. There was stomach politics at play in the communities where a group of thugs were hired to protect one individual’s interests. The state should build internal capacity to deliver services to communities then there would be no need for such intimidation.
Mr Mpumza said the role of the mayor and speaker were clear. The mayor could not convene council and the speaker could not behave as the mayor. Therefore, why did it appear that the municipality was being run by the PMT – an illegal structure? Decisions taken by the PMT were informal and could not be implemented. He asked if the termination of the high-risk security company had been informed by a risk assessment by SAPS or had Council concluded that there was no longer a threat. Had the situation in the municipality normalized so such security was no longer needed?
Mr Mangena replied that the appointment and termination of the security was not done by the PMT or the executive committee. That had been understood to be purely administrative. It was not a political matter, so the Mayor did not interfere.
Mr Ceza asked how far the municipality was in addressing the water crisis particularly in the villages. What was the progress in the drilling of boreholes and the timeframe for completion? If there was no water above, then surely there was water beneath.
Mr Mangena replied that the municipality was not the water service authority but there were efforts to intervene. Trucks were used to deliver water as an intervention mechanism in circumstances like funerals. The relevant authority was in the process of addressing the boreholes in consultation with the municipality. He made it clear the municipality had the capacity to be a water service authority so that the needs of the community could be met directly. The municipality worked closely with Eskom who allowed them to supply electricity in the villages. Every village in the municipality had electricity which was great progress. He felt they could achieve the same with the water supply and asked the Committee to make a recommendation to that effect. An application to become the water service authority had been submitted to the Minister.
The Chairperson asked how they could be the water service authority when the PMT and Council were not seeing eye to eye. How would the major function of water be delivered? She did not mean to sound sarcastic but that was the reality. She asked Mr Makamu as the MEC if he would approve that application.
The Chairperson said Greater Tzaneen was the highest underspent municipality nationally for capital budget underspending. She asked for an explanation for the 71% underspending. Was it because they were fighting about who should be awarded the tender? A lack of decision making was indicative of disagreements about who should be awarded tenders. That compromised service delivery. What was the reason for underspending?
Secondly, the municipality had been in the spotlight for failing to act against the CFO who had been the acting municipal manager. Ms Makhubela was implicated in the VBS Mutual Bank matter during her stint as CFO at Makhado municipality. The Motau Report revealed a WhatsApp conversation between Ms Makhubela and a politician named Mr K Matsepe in which Ms Makhubela allegedly demanded R33 000 for her role in facilitating the VBS investment. She asked Mr Mangena and Mr Matlala to inform the Committee on what action had been taken as they were aware of this. Other municipalities had acted against implicated persons.
Mr Mangena replied that Ms Makhubela had been appointed as CFO at the municipality in April. When the allegations surfaced, she had already been appointed as acting municipal manager. She had been vetted and nothing was found wanting. Mr Mangena could not remember if the municipality sought legal advice on what to do if a person is employed but is later implicated elsewhere. He said it would not have been their main function as she was appointed as a clean CFO.
Mr Mangena replied that progress had been made on the underspending. The municipality had a challenge with the electricity projects especially with the funding from DBSA, but they would be able to deal with it. Currently, spending was at 43% in November.
The Chairperson said that was still underspending as the financial year was ending.
Mr Matlala added that according to National Treasury norms for capital projects, the municipality was not underspending. COGTA said they would have given the municipality more money as it was performing well.
Mr Matlala replied about Ms Makhubela that the municipality was mindful of the VBS report but as the Mayor said they would look at the matter in terms of the reputation of the municipality. What were the implications for the reputation of the municipality? When she was made acting municipal manager, the first thing that was printed in newspapers was that the municipality had appointed a VBS implicated person. It was a matter that the municipality was grappling with.
Mr Hoosen put forth a resolution as a suggestion. Given what was heard from Mr Mangena and Mr Matlala on possible corruption taking place in the municipality, the Portfolio Committee mandated the Chairperson to write to Limpopo COGSTA and the Hawks to investigate the matter. Everything said in the meeting was on record which would form part of the investigation.
The Chairperson agreed that would be the way forward. She reminded Mr Mangena and Mr Matlala to send the requested information. Ms Mmetle had already handed her file to the Chairperson. That would be the resolution on the matter and the Committee would follow up on the municipality as it had been identified as high-risk. There should not be omission when implementing the law which was simple to read and understand. She suggested the municipality take time to go through the law and familiarize themselves with it. She thanked them for attending the meeting with the minimum number of senior managers. The Greater Tzaneen municipality was allowed to leave.
The Chairperson said Parliament always warned municipalities to travel with the minimum number of delegates as there were financial implications. It was not necessary for the entire municipality to account before the Committee. Parliament did not want to be irresponsible in inviting large numbers of delegates. She was pleased that Collins Chabane and Greater Tzaneen municipalities had adhered to the number of delegates they were requested to bring. She read from the letter she wrote to the municipalities to put on record and for the attention of the Limpopo MEC, Mr Makamu. The letter said the delegation should consist of the PMT and Senior Management. It further instructed municipalities to communicate with the Committee Secretary for more information and clarity. The letter included the contact details. Mogalakwena had travelled with its entire team including middle managers. How did the Municipal Manager of Mogalakwena Municipality justify that expenditure? Other municipalities had followed the instruction in the same letter.
Ms Beverly Gunqisa, Municipal Manager of Mogalakwena Municipality, confirmed the contents of the letter. She explained the municipality had two acting managers who were the technical manager and the community services manager. As a result, they decided it was prudent to bring them. They were uncertain but admitted they should have asked the committee secretary before travelling.
The Chairperson asked if she was mindful of the cost implications and how much had been spent.
Ms Gunqisa replied that she was and the municipality had spent R90000 to fly the delegation to Cape Town.
The Chairperson asked why that did not raise an alarm. Almost R100 000 had been spent to account to a Committee. When the Committee had visited the municipality during its oversight visit, they had not seen that many managers present.
Mr Hoosen asked who exactly made the decision to travel with all those people as he was sure it had not been a collective decision. Was Ms Gunqisa aware of the 2019 cost containment measures issued by the Finance Minister? The Municipal Cost Containment Regulations were completely ignored. How would the municipality recover the wasted expenditure? Not everyone present would contribute to the meeting.
Ms Gunqisa replied that the matter had been discussed with Mayor Matsemela, but they decided to travel with the whole team. It had been an oversight not to enquire further but they did not want to make a mistake. The municipality was aware of the cost containment regulations which were being implemented and included in the planning for the new financial year. All managers were aware of it in the institution.
The Chairperson said the letter referred to senior management. Did Ms Gunqisa view all the managers present as senior managers?
Ms Gunqisa replied that she did as they were all top-level management.
The Chairperson asked what level management the gentleman was sitting behind her.
Ms Gunqisa explained there were two acting managers who were present as acting section 56 managers and those were the only two people she could account for.
The Chairperson asked who should account for the rest of the excess delegates.
Ms Gunqisa replied that the manager of electricity was also part of top management of the municipality. That was as per the reviewed management structure.
The Chairperson asked her to answer Mr Hoosen’s question on how the municipality was going to deal with the expenditure. It was unnecessary. It was being raised with her because she was the accounting officer who was responsible for the resources of the municipality as stated in Chapter 8 of the MFMA. Collins Chabane municipality brought only three senior managers as did Greater Tzaneen municipality. How many had Mogalakwena brought?
Ms Gunqisa replied that she brought eight delegates.
The Chairperson noted that was three times the number the other municipalities brought. Was that in line with her fiduciary duties as the municipal manager? Did she not consider it reckless?
Ms Gunqisa insisted that they followed the letter's instructions.
The Chairperson disagreed. Why was she the only one to follow the letter's instructions in that manner? Multiple municipalities had appeared before the Committee and had always brought the minimum number of delegates as they were mindful of cost containment. Did the Committee need to write to Mogalakwena to be mindful of cost containment? What made them different? The Chairperson asked the MEC to take note so he could address the matter.
Mr Hoosen recalled the Committee's 16 October oversight visit to Mogalakwena municipality. They had been informed by the mayor that the municipal manager had applied for study leave and was writing exams. He asked Ms Gunqisa if she in fact applied for study leave, what examination she had written and where.
Ms Gunqisa replied that it was true she wrote an exam on 16 October 2019. Members of Parliament were initially going to visit at 2pm however due to changes the meeting had been moved to 11am. She did not submit a formal application for leave because she was at work. She made an arrangement with Ms Matsemela requesting to write her examination from 9am – 12am and resume her duties afterwards and attend the meeting. On 16 October, she wrote an exam for her Honours degree in Business Administration with Stellenbosch University. She could not recall which exam it was, but it took place in an examination centre in Pretoria. By the time she had made her way back, the meeting was already halfway through. That was around 12:30pm-1pm as she was driving back. Ms Matsemela was telling the truth.
Mr Hoosen asked if she was aware the MPs were still at the municipality when she finished her exam.
Ms Gunqisa replied that she was aware but upon her arrival the electricity was cut off. Although she had returned to the premises, she was told the meeting had been adjourned due to the lack of electricity.
Mr Hoosen said he was not getting a direct answer, so he probed Ms Gunqisa further. Had she planned to return to the meeting and was told it had been postponed which was why she left? He was trying to understand why she did not go to the meeting if she had planned to join the meeting after her exam. Who told her not to go to the meeting? Had it been her own decision to ignore the Committee's presence or was she asked not to attend.
Ms Gunqisa reiterated that she arrived back at the premises when the meeting had just been adjourned as the electricity had cut off which meant the meeting would not continue. Thus she took it upon herself not to go because the meeting was over when she returned.
Mr Mpumza stated that Council Speaker, Mr Mathebula, had told Members at the 16 September meeting that he was in the process of electing and filling the vacancy of the Chairperson of the Municipal Public Accounts Committee (MPAC). In the current meeting one could see that they were still in the process of electing the Chair. Why is there no sense of urgency to fill the vacancy? The municipality had obtained an adverse audit finding from the Auditor-General for three consecutive years. The report indicated that the Municipal Public Accounts Committee (MPAC) was dysfunctional so how could it fulfil its oversight role? These questions had been raised during the oversight visit. The Mayor was aware that the 16 September meeting was not formally closed as community members had disrupted the meeting. At whose behest had the people barged into the meeting when the electricity had cut off? Why did they ask to suspend the meeting so that the MPs could question the Council Speaker in a separate room? How could they be so bold as to direct the Committee to question Mr Mathebula privately? What post-audit action plan had been taken to address the adverse audit finding? What consequences had been taken? The audit would have categorized the amounts of irregular; fruitless and wasteful; and unauthorized expenditure. What action had the municipality taken to ensure the irregular expenditure was being recovered?
Mr Mpumza said the Municipal Manager's explanation about her absence from the meeting was unsatisfactory. She had committed herself to joining the meeting at that time, so it was unacceptable for her to say she did not attend because she heard the meeting was adjourned. The meeting had not been formally adjourned as he remembered some demanding the meeting to continue but the chaos caused by the people mobilized to disrupt the meeting caused the meeting to end. A tall young guy warned Mr Mpumza to stop the meeting as he would not allow anyone to question the Mayor. Another person offered to escort the MPs when they left as they could be killed. At whose behest had that situation unfolded? Ms Gunqisa's answer was unsatisfactory. Why did she not join the meeting when she had committed to joining the meeting?
On the aborted community meeting, the Chairperson asked the COGTA team why the structures were not mobilized to meet Members. This had taken place in other municipalities and meeting stakeholders was part of oversight. The Chairperson had a report from the Parliament security personnel as she had requested a report be written. There were people who had wanted to speak to Members but were prohibited by security placed at the gate because there were only a certain few that could enter to disrupt the meeting. The leadership of the municipality was asked who instructed the security at the gate to police the entry of people. That obstructed the work of the Committee. The official from COGTA said they were denied from meeting stakeholders in Mogalakwena which was a problem that had not been encountered in any other municipality.
Ms Gunqisa repeated that she really wanted to attend the meeting. However, due to disruptions and the electricity cutting off she believes that is why she did not come. She also felt her attending the meeting when it had been disrupted would not yield a positive outcome as the meeting had dispersed. She apologized and said she should have done better and should have shown her face.
On the aborted stakeholder engagements, she had requested a report from the relevant manager, but the responses were not forthcoming, and they ended up citing an oversight. She had not been aware that people had been prohibited from entering.
Ms Mavis Matlala, Corporate and Support Services Manager, addressed the stakeholder issue. She said the COGSTA department was correct in saying she was part of the preparatory meeting. On her arrival back from the preparatory meeting she engaged a management meeting to prepare for the Portfolio Committee’s visit. Unfortunately, the matter of the stakeholders was not emphasised so as management she offered an apology and took full responsibility for impeding MPs' ability to properly carry out their functions.
On the stakeholders who had been refused access at the gate, Ms Matlala said she was not aware of the matter and perhaps the Manager of Security, Traffic and Emergency was aware.
The Chairperson said to the Limpopo MEC, Mr Makamu, that communication with this municipality was difficult. Every other municipality adhered to the request to organize stakeholders as well as keep their delegation to a minimum. Ms Matlala stated on record in the COGSTA meeting that she had not been aware that stakeholders had to be mobilized until an official stood up and reminded her she had in fact been informed. Therefore, it was false for Ms Matlala to create an impression that no communication had been given that stakeholders were to be mobilized. The Chairperson found it disrespectful.
Mr Hlengani Mathebula, Speaker, apologized and accepted that an undertaking was made to hold a special council meeting to deal with the appointment of the MPAC Chairperson. The meeting had been convened at a stipulated time and venue but unfortunately Mr Mathebula fell ill and tendered an apology. When he was at home, he received a SMS which indicated that the meeting had been postponed. He phoned Ms Matlala to inform her that section 29 of the Municipal Structures Act was clear on the responsibilities of the Mayor, Speaker and Chairpersons of Council Committees. It was up to the Speaker to postpone the meeting if he saw it fit. Ms Matlala said she did not know about the postponement. He called the Council secretary who told him the Municipal Manager, Ms Gunqisa, had instructed her to postpone the meeting. The meeting was rescheduled because the MPAC matter was critical.
Mr Mathebula continued that another Council meeting had been convened but unfortunately the agenda item had been omitted. The meeting was rescheduled for the 28th or 29th. During Council the omitted item was not part of the Council agenda, so Mr Mathebula asked Ms Matlala what was going on with the omitted agenda item. Ms Matlala sent her secretary to get a memorandum requesting that the omitted item be included. After her return, Council wanted to begin with the omitted item, but Council got disrupted. After the disruption Council agreed to meet the following Tuesday so the omitted item formed part of that meeting agenda. Before Tuesday Mr Mathebula received a legal opinion, which indicated that the item to be discussed was not supposed to be discussed as it was sub judice. However, upon analysis of the legal opinion, Mr Mathebula found that it did not address the intention of bringing that item to Council.
The Chairperson asked what the agenda item was.
Mr Mathebula replied that he knew he would be grilled for revealing it — an incorrect decision had been taken on 18 December 2018 which was in contravention of section 59 of the Municipal Systems Act on delegation. The decision was also in contravention of Standing Rule 43.
The Chairperson asked what the decision was about.
Mr Mathebula replied that it was about the removal of the Chief Whip and two Executive Committee members.
The Chairperson asked for their names.
Mr Mathebula replied that the Chief Whip was Mr Mankopane Rapatsa and the two councillors were Lesibana Langa and Mabu Tlhaku who were removed as Executive Committee members. On the 18 December, Council processed a motion brought by a councillor about two Executive Committee members. The law had been contravened because section 56(a) states it is a municipal council’s responsibility to appoint municipal managers and managers reporting to the municipal manager. The person processing was an acting municipal manager who had been appointed by Council through a delegation of powers. The legality of the delegation of powers had been discussed the previous time the matter had been addressed. The delegation contravened section 56(a). Section 59(2)(a) states that a delegation of powers should not contradict the Constitution, or the Municipal Systems or Structures Acts. Council’s delegation gave the political principals power to appoint municipal managers, but it said to appoint an acting municipal manager was done in consultation with the municipal manager but at the time there was no municipal manager. There was no one to consult so the matter was supposed to be referred to Council to appoint a municipal manager to be in line with the law. Chief Whip Rapatsa was removed though Standing Rule 43 which stipulated that a councillor could bring a matter that did not appear on the agenda but to adopt the matter Council needed to agree unanimously. At the time, Council was not in agreement making the matter null and void. During the last meeting to appoint the MPAC Chairperson, a councillor stood up on Rule 51 which allowed a councillor to raise a question if it was about the day-to-day matters of the municipality. The councillor was booed. As a result, 15 men described as bouncers stormed the Council to remove the councillor who stood on Rule 51. Speaker Mathebula told the bouncers he was responsible for Council so no one could be removed without his permission and the bouncers lifted him up. That is when the meeting got disrupted.
The Chairperson asked that the three-month long leave of Municipal Manager, Ms Gunqisa, be addressed. It had formed part of the Committee’s report and had been raised at the oversight visit meeting. The Chairperson asked how a municipality struggling to change the adverse audit opinion it had been plagued with, granted a newly appointed municipal manager three months' leave. Ms Gunqisa was physically unavailable for three months and copies of the leave forms were to be submitted to the Committee. Ms Gunqisa was permitted leave from 20 September 2019 to 23 November 2019 in a municipality that had been a repeat audit offender. It seemed the municipal manager was hired just to tick a box and yet the municipal manager was responsible for overseeing the audit findings as raised by the Auditor General (AG). There had been multiple adverse audits and non-compliance with supply chain management process. A culture of consequence management did not exist in the Mogalakwena municipality. That included a complete disregard of the law evidenced by how the leave of Ms Gunqisa was handled. Members probed the matter during the oversight visit but there had been no response and the municipality promised to furnish the approval document. No documents had been sent up to date.
The Chairperson was glad Ms Gunqisa was present to explain the matter herself as there had been a notice that she was going to be absent from the meeting. She told the Limpopo MEC, Mr Makamu, that Members had raised concern that a newly appointed person could take leave for three months. The requested leave forms and approvals were never sent to the Committee. She asked Ms Gunqisa to explain the anomaly as she could not have qualified for leave when she had been recently appointed. A message had been circulated to the Department that Ms Gunqisa would be absent for three months and Ms Matlala would be acting in her position. Ms Gunqisa also needed to share what decisions had been taken in her absence. Was the leave forced on her or had it been voluntary?
In addition, the Mayor, Ms Matsemela, had been requested to submit the document from the disciplinary hearing of Mr Jabu Mashamaite, and the circumstances that led to his return. Ms Matlala had been asked for the outcome of that sanction and nothing had been submitted to date. The Chairperson asked for the reasons why and expected a comment on the matter from Ms Gunqisa as Mr Mashamaite had been reinstated during Ms Gunqisa’s absence, yet she had suspended him. Was this no different from the Greater Tzaneen Municipality case that Members dealt with earlier?
Ms Gunqisa replied that the matter of her leave began when she took the decision to suspend Mr Mashamaite. The surrounding circumstances were abnormal, and she sat down with Ms Matsemela and the two agreed that due to various elements and factors the accounting officer was compelled to subject Mr Mashamaite to disciplinary proceedings to test if any misconduct or maladministration had taken place. A week later the stance was different, and Ms Gunqisa was called…
The Chairperson asked who called her.
Ms Gunqisa replied that she had been called by Ms Matsemela and a brief discussion ensued about reinstating Mr Mashamaite. Ms Gunqisa indicated that it would not be possible as the suspension was under way, and the disciplinary proceedings had been prepped for. Thereafter, Ms Gunqisa was pressured but as the accounting officer she was unable to reinstate Mr Mashamaite in that way which was not in line with legislative practice. He needed to undergo disciplinary proceedings and based on the outcome he would either resume his duties or not. It was then agreed that Ms Gunqisa take leave and since she was embarking on writing exams and therefore taking study leave, she agreed to take an extended leave. She took the leave in agreement with the mayor who used her prerogative powers to appoint Ms Matlala to act in Ms Gunqisa’s absence.
Mr Mpumza asked whose idea it was that Ms Gunqisa take leave. Had it been her own suggestion?
The Chairperson summarised what Ms Gunqisa said and also asked whose idea it was that Ms Gunqisa take leave.
Mr Hoosen apologized for interrupting but needed to ask if Ms Gunqisa feared for her life if she answered honestly.
Ms Gunqisa replied yes.
Mr Hoosen asked the Chairperson if Members could have a short caucus as he had a suggestion on how to proceed.
The Chairperson asked for the room to be cleared so that Members could have a private discussion.
After the caucus session, the Chairperson invited everyone back inside.
She explained that the Committee deliberated on the matter and Mr Makamu was of good guidance. It had reached a decision about the number of delegates and asked that only senior management to remain. The rest were excused as there was no value they could add. Mr Mashamaite was asked to remain. The Committee would first listen to Collins Chabane Municipality and thereafter resume with Mogalakwena.
Collins Chabane municipality
The Chairperson explained the municipality had been called before the Committee as it had failed to respond to the Committee’s follow-up questions. The report submitted did not deal with the matters previously raised by the Committee; however it was an improvement and Members would ask follow-up questions.
She outlined the items to be finalized as outlined in the Committee oversight visit report. The Committee was concerned that despite being a newly formed municipality, the amount of fruitless and wasteful expenditure incurred was massive. There was no recovery plan for the R120 million investment as well as the interest of R2 million. The municipality experienced a material loss from the investment which left them with a vacancy rate of 69%. As a result, the municipality projects could not be completed.
There were also concerns about staff that had not worked since the inception of the Collins Chabane municipality. The staff had been transferred from Makhado municipality to Collins Chabane and had not done any work since then.
On services, the Chairperson said there had to be a service level agreement between Vhembe District Municipality and the province and the Department on how services would be rendered. There was no service provision in multiple areas.
Other item to be addressed was the civil recovery of the money. The Chairperson said it was not enough to suspend individuals. She asked about the progress of the matter in the Labour Court concerning the municipal manager. Why had no civil claims been instituted against the individuals implicated in the VBS Mutual Bank matter since the Committee’s oversight visit. The municipality had also failed to take steps against government officials who had been awarded contracts. There had also been a failure to discipline a manager who failed to declare that his wife was among the municipal tender beneficiaries.
On the 69% vacancy rate, Mr Hadebe pointed out that it was the result of the R129 million that had been invested in VBS Mutual Bank so those positions could not be filled. Had this vacancy rate decreased and what was the status regarding the incomplete projects?
Mr Hadebe noted the audit finding about the excessive reliance on consultants and asked if consultants were still being used to prepare annual financial statements.
Mr Ceza asked for the costs that emanated from the reliance on consultants.
Mr Moses Maluleke, Mayor of Collins Chabane Municipality, replied that they had been requested to answer the follow-up questions from the Committee. He recited the items to be answered as outlined by the Chairperson. On the names of workers who had not been working, Mr Maluleke replied that that information had been provided to the Committee. He asked the Acting Municipal Manager to deal with the report and other members of his delegation would answer the remaining questions.
Mr Richard Shilenge, Acting Municipal Manager, Collins Chabane Municipality, addressed the municipality's reliance on consultants. The Committee had asked why the municipality relied on consultants that produced poor financial statements. A meeting was called with the consultants after the Committee’s oversight visit which was constructive. The municipality had managed to move from disclaimer to a qualified audit opinion. Its predetermined indicators performance information was noted as clean. The Committee wanted to know if the municipality would still rely on the same consultants. The municipality had already indicated that the consultants had been contracted for three years and were currently in the second year of the contract. They would be still contracted to audit the 2019/20 financial year. What contributed to the poor performance was the previous CFO had only interns but the appointment of five managers in the treasury office saw a big improvement. Therefore, it was not necessarily the consultants’ fault. Interns could not be expected to perform well but the newly appointed managers were doing well. The improvement was vast because the previous year the disclaimer was 15 paragraphs long, but the latest qualified report was only two paragraphs long. That was proof that the audit action plan worked. It dealt with 13 of the 15 audit findings. One of the two remaining was the irregular expenditure. To address that, the Audit Committee, MPAC Chairperson and Provincial Treasury had agreed that a meeting would be held before closing for Christmas to iron out the irregular expenditure. The municipality's irregular expenditure had unfortunately accumulated from 2016/17, 2017/18 and 2018/19. He emphasized an improvement in the audit. The irregular expenditure emanated from the reliance on consultants. The CFO would be appointed in the next Council meeting on the 13 December. The CFO appointment was a measure to address the irregular expenditure.
On the 69% vacancy rate, Mr Shilenge did not want to attribute it to the VBS Mutual Bank matter. The main reason was the delay in the SALGA job evaluation process that took too long. The vacancies had been budgeted for and when the job evaluation result was released the positions would be advertised and appointments would take place. SALGA had been releasing the job evaluations in a piecemeal fashion which delayed appointments but as soon as the job evaluation was completed then appointments would follow.
The lost VBS Mutual Bank investment had led to unauthorized, irregular and fruitless and wasteful expenditure. The municipality had taken measures against the implicated officials. The suspension of the previous CFO and municipal manager had been done to address this. During that process the CFO resigned while the matter against the municipal manager was still underway and before the Labour Court. A law firm had been appointed and had a claim logged with the liquidator that had been accepted. The amount recoverable was still uncertain. The liquidator only had R435 million for disposal which had to be shared with similar claims.
On the lack of service delivery, Mr Shilenge felt he could not add anything as the Chairperson had stated the situation exactly as it was. The challenge was the staff because the municipal offices needed to be opened. Municipal staff members were present and getting paid but were ineffective in carrying out their duties. In the last meeting it was noted that Exco had been presented with two options. Option 1 was for the employees to be relocated to active areas of the municipality but that would include financial implications for relocation costs. Option 2 was for the offices to be opened which would be carried out in consultation with the Limpopo COGSTA MEC as well as the inter-ministerial committee as it was a matter being dealt with at a high level. Exco choose Option 2 to re-open the offices because the employees could not be relocated as the community might feel the municipality was abandoning them. This option required Mr Maluleke to engage with the MEC and the talks were underway. The hope was that the offices would be speedily opened so work could commence. There were serious attitude changes in the communities in the area demanding service delivery; however, the municipality now understood that demarcation was another element to consider. What was currently needed was service delivery to those communities. He had letters from the villages around Vuwani requesting service delivery.
Mr Shilenge noted that the names and salaries of employees in Vuwani had been emailed immediately after the oversight visit.
Mr Shilenge reported that steps had been taken against the official who had not disclosed his wife benefiting from a tender. He immediately commissioned an investigation on this and the labour relations officer would furnish a report on the investigation before 15 December. Thereafter, steps would be taken accordingly. The implicated official had been interacting with the labour relations officer and had exchanged correspondence. MPAC would also get involved because part of the matter would be investigated by it.
Mr Shilenge stated that there were no projects that had not been completed as a result of the VBS Mutual Bank matter. All projects were completed and in the past financial year the municipality received R21.6 million as additional funding from the Municipal Infrastructure Grant (MIG) for having spent 100% of the MIG. The municipality currently sat at 64% expenditure with barely six months having gone by. Therefore completion of projects was not affected. The projects that experienced challenges were as a result of the municipality terminating the contract due to poor performance by the contractors. The project was the Xikundu ring road which was underway.
Mr Rodgers Maringa, Acting Chief Financial Officer, Collins Chabane Municipality, addressed the financial questions posed by the Committee. On the large amount of irregular and fruitless and wasteful expenditure, the municipality started with communities expectant of service delivery. This was done through Municipal Supply Chain Management (SCM) Regulation 32 appointments of consultants who serviced the municipality. Many projects had been appointed through that process. Unfortunately, along the way it was discovered that Regulation 32 had not been followed correctly. Sadly, these were three-year appointments, so these projects caused the irregular expenditure to balloon. All these Regulation 32 appointments were now in the last year of execution.
Mr Hadebe was impressed with the progress thus far but was concerned about the acting positions. He understood that the matter involving the municipal manager was still before court so there could not be a permanent position, but what about the CFO position? He asked how long Mr Maringa had been the acting CFO and why he was still in an acting position. Were there plans to fill the position?
The Chairperson pointed out that Council was going to sit to fill the CFO vacancy on 13 December.
Mr Ceza commended the improvement as well. On the adverse audit, a municipality manager had failed to declare that his wife was amongst the list of tender beneficiaries. What was the consequence management for that and who was the manager?
Ms Tlou applauded the municipality on their progress since the oversight visit. She asked if there was a plan to deal with the unregistered municipal properties and illegal land use around Vuwani.
The Chairperson asked for a response on the civil proceedings and recovery plan for the VBS Mutual Bank matter. Had a civil claim been logged against the implicated officials as there was a duty on the municipality to lodge a civil claim. Was there a reluctance and if so why?
On the 69% vacancy rate, the Chairperson said the AG’s report flagged the VBS investment as a reason for the vacancies. The Chairperson rejected the job evaluations delay as the sole reason for the high vacancy rate. That was a fact in the AG report.
The Chairperson said Mr Maluleke had not answered the questions about the previous municipal manager. She asked for the names of the Exco PMT members who took documents to the municipal manager to sign when he was hospitalized. They had promised to send the names during the Committee oversight visit and the issues had also been raised in the Committee’s community meeting.
The Chairperson commended the progress on the Vuwani sub-office but ask Mr Shilenge for a time frame. Exco had decided that the office would be opened. That site was a service point and there was a township there which had development prospects. Stability had been established and the police would ensure it remained. She asked that the office be made operational. She asked how many staff members there were. People could not be employed to do nothing. The other consequence of that was performance appraisals and it was not the fault of the employees that their municipal employer was not giving them work to do. They could sue the municipality for not receiving performance appraisals.
What was the strategy for the five townships were the people were refusing services? What recovery plan had the municipality put in place as refuse would be piling up and needed collecting. That was a health hazard. The municipality had to exercise its jurisdiction over those areas. There may be up to three affected wards.
The Chairperson said the matter of the manager’s wife who benefited from a tender was linked to the municipality's fruitless and wasteful expenditure. The Committee had requested a breakdown of the municipality's irregular expenditure as reported by the AG. There needed to be a breakdown of the nature of the transgressions and the steps taken to address them. She had also asked for the audit action plan so that the Committee could follow up on that as well. Why had the municipality taken so long to investigate the matter? It was trivial to have appointed a labour relations officer when the matter had been flagged in the AG’s report. The municipality had not grasped the severity of the offence and she asked for the turnaround strategy to address the matter. As a new municipality the AG also raised concerns that such problems existed. Supply chain management had been found wanting. These matters were easily solved through disciplinary measures so that employees knew not to break the law. Accounting clerks needed to keep proper records which affected the CFO’s job.
The Chairperson asked why the report was silent on the role of traditional leaders. Had they been allowed to participate in Council meetings as that was a requirement. How many had the MEC approved to participate in Council?
The Chairperson asked the MPAC Chairperson to comment on the public participation and outreach. What was the plan in terms of the Integrated Development Plan (IDP) for the five other areas?
Overall the Chairperson was happy with the progress thus far but wondered why the municipality had not simply replied in writing to the follow-up questions.
She asked the MPAC Chairperson if the report had been finalized and if the municipality took MPAC’s work seriously.
The MPAC Chairperson replied that MPAC was functional. The Council referred a lot of items to the MPAC Committee. MPAC called in department senior management for questioning and their answers were submitted to Council. Those responsible for unauthorised irregular, fruitless and wasteful (UIFW) expenditure had also been called before MPAC to explain everything.
The Chairperson asked if the audit outcomes had been considered. Were findings of the 2017/18 audit outcome referred to MPAC and had they been considered? What were the recommendations? It was not enough to say MPAC was functional without giving details.
The MPAC Chairperson replied that the UIFW had been investigated and Mr Maringa had responded that the irregular expenditure would continue as the irregular contracts were for three years. That explanation was accepted and MPAC recommended that Council approve this which was done. The matter of the employee whose wife benefited from a tender was referred to MPAC and an investigation was recommended, and they were waiting for the report.
The Chairperson asked for a report from MPAC once they had received feedback on the investigation. That would show that the matter had been addressed as that irregular expenditure flagged by the AG had not been dealt with. The AG raised items of fruitless and wasteful and irregular expenditure and MPAC needed to address each one individually by identifying what caused each one.
The MPAC Chairperson replied that they already had a report and it could be submitted before the end of the meeting.
Mr Hadebe asked if the MPAC Chairperson was confirming that the cases of fruitless and wasteful expenditure had been investigated. How many officials had been found on the wrong side of the law and what were the outcomes for those cases?
The MPAC Chairperson replied that the information was in the report.
Mr Hadebe asked why the MPAC Chairperson could not recall how many officials had been subjected to disciplinary hearings or if letters of suspension had been served and how much money would be recovered.
The MPAC Chairperson replied that as far as he knew no official had been taken to book.
The Chairperson, surprised at that statement, asked what MPAC’s recommendations were.
Mr Hadebe asked if they decided to condone their actions after the investigation. Had no one been found on the wrong side of the law?
The MPAC Chairperson agreed because a lot of the irregular expenditure, as Mr Maringa had explained, had been as a result of the incorrect application of Regulation 32. The irregular expenditure would be done by the end of the third year.
Mr Hadebe said the irregular award of the three-year contract was as a result of an individual not following the law. If it was wasteful expenditure, then someone deliberately wasted money that could have been saved and the municipality made a loss. Why had no one been found liable for that loss? The amalgamation of the municipality was new, but the officials were not new and should know the legislation. Being new was no excuse for flouting the law.
The MPAC Chairperson replied that, as Mr Shilenge indicated, the investigation found that another contributing factor was a shortage of staff. Interns had been hired at the time.
The Chairperson interjected to say that this had also been raised by the AG but the issue at hand was that MPAC should analyse the AG’s audit report upon its publication. Non-compliance matters raised by the AG should be analysed and an opinion should be expressed and recommended to Council so that action can be taken. It was unacceptable for the MPAC Chairperson to say that the AG report had been considered with no resultant consequence management recommendations. Mr Shilenge could not respond on behalf of MPAC as it was not an administrative issue but an oversight one. She asked if MPAC had processed the audit reports in the three years the municipality had been audited. The AG noted the AG's concern that the CFO did not follow-up on matters raised by the AG. If left unaddressed those areas would recur as problems causing a qualified audit opinion. MPAC also needed to follow-up on whether Council was implementing the audit action plan. She asked if the municipality had a fully functional audit committee.
Mr Shilenge replied that initially the audit committee had been functional, but the supply chain and vacancy challenges led Mr Shilenge to transfer a senior internal auditor to become a senior accountant in supply chain. He felt it was best to outsource internal audit and strengthen supply chain where the AG had found irregular expenditure. That was a quick way of addressing the problem of irregular expenditure. The internal audit position would be filled by January 2020.
Mr Matome Lebea, Speaker: Collins Chabane Municipality, said the Chairperson was in order when interacting with the MPAC Chairperson about the audit outcomes. The AG always referred the audit findings and recommendations to the MPAC Chairperson. Council always preferred MPAC to investigate the audit outcomes. Mr Lebea said he could not interfere with the MPAC recommendations by law as only Council had that power. Mr Lebea said the reports had been compiled and would be sent to the Committee. Council always approved the MPAC recommendations.
Mr Lebea responded to the questions on public participation and involvement in Vuwani and Masakona. Masakona is one of the biggest villages and is a traditional council to which Mr Lebea belonged but he did not reside there. Masakona was challenging during the re-demarcation period and the ministerial task team failed to visit the village as they had been denied access by the community and traditional leaders. Mr Lebea was a victim of the demarcation and had still not recovered from his sufferings. In his village he tried to manoeuvre and now Collins Chabane municipality provided services there even though the village was divided. Some villagers did not want to be part of Collins Chabane while others were accepting. Services were still delivered to everyone in the village. In Vuwani, Davhana was the only village with positive public participation and as a result all imbizos were hosted there. When the municipality attempts to visit the other villages to conduct imbizos or public participation hearings on by-laws, the community members state that their safety could not be guaranteed. The community members would be transported in busses to areas where safety was guaranteed. Mr Maluleke had a list of villages that asked for services although not from all village members. The villages that wrote letters requesting services had been provided with services such as water supply.
Mr Shilenge said that the items ordered to be submitted by 12 December would be submitted without failure. That included the breakdown on irregular expenditure and the audit action plan. The SCM policy had been reviewed to be in line with the recommendations.
The Chairperson asked if that included its investment policy which needed to be in line with the investment regulations.
Mr Shilenge replied yes. They had improved on record keeping which was reflected in the audit report as the audit was furnished with every document needed. All reconciliation had been improved on.
In response to Ms Tlou’s question, Mr Shilenge said there had been illegal occupation of the municipality's land in Vuwani and Malamulele. The municipality had commissioned a land audit and the report had been submitted to Council and had been approved. Lawyers had been appointed to deal with the eviction of the land occupiers. They had to be sensitive because in some instances like in Malamulele the occupiers were formally included into the township instead of being evicted.
Mr Shilenge did not want to speak on behalf of the MPAC Chairperson, but he wanted to add that they had conducted two public hearings for 2016/17 and 2017/18.
The Chairperson said the Committee wanted the actual report as public hearings was a requirement.
Mr Maluleke replied that the municipality delegation had witnessed the hostility in Vuwani prior to the establishment of the Collins Chabane municipality. That compared to the current environment reflects a tremendous improvement. The effort that has been deployed by Council has ensured that services in the area had been rendered. He confirmed that in some instances the security companies of the municipality had been told to back off. A strategy was in place to engulf the core area of the Vuwani township to ensure proper service delivery in those areas. The inter-ministerial team had also been of assistance and if everyone worked continued to work together, the challenge that is that township would be overcome.
Mr Maluleke referred to the PMT and Exco members who took a document to the municipal manager to sign while he was in hospital. His response would be the same as his response when the Committee asked him the same question during its oversight visit. He had come in after interventions when the whole saga had taken place. At the time he was a councillor and a representative of Vhembe. He was also a Member of the Mayoral Committee (MMC). At the time there were issues taking place at top political management level which he had not been a part of. The rumour had existed at that time even though it had not been tested to date. After being appointed Mayor he investigated the matter in his personal capacity but found it difficult. Nobody was willing to give information on who took the document to the municipal manager to sign when he was hospitalized. He wanted the municipal manager to state who had given her the document to sign. He called them rumours as the information constantly changed. It is unclear how many people took the document to be signed. The matter had been taken to court and would be uncovered through the court process.
On the civil claims, Mr Maluleke agreed that the municipal council was growing complacent but it was council’s intention to address the civil claims. They had agreed first to consult on the issue so that unnecessary mistakes could be avoided. That would prevent possible wasteful expenditure that had been frowned upon by the Committee. He welcomed the guidance from the Committee, indicating that the civil claims will be speedily dealt with.
On the township of Vuwani, Mr Maluleke said the key role player in ensuring instability in the township of Vuwani was a certain individual (inaudible 1:26:16 Part 2). He was constantly on air speaking negatively about Collins Chabane municipality incorporating the areas of Vuwani. Over the last 12 months he had been silent. He was still alive but because of the municipality's efforts in isolating the individuals who cause mayhem, he had been converted and was now in agreement that those areas should receive service delivery from the municipality. The municipality would continue to monitor other individuals who were responsible for inciting unrest. Mr Maluleke wondered if his utterances were recorded and if those individuals have access to the recording.
The Chairperson said everything was on record and those people could access this information.
Mr Maluleke decided he would not mention the names of the other individuals that had been identified by the municipality. The matter was sensitive, and the municipality acted with caution. The dynamics of the areas were analysed and as a result more villagers had written letters. He referred to a file he had brought with him containing letters from villagers. He was sure that a breakthrough would be made in Vuwani.
On traditional leaders, Mr Maluleke replied that there were 14 gazetted traditional leaders who participated in Council although in dribs and drabs from all municipal areas. English was the language used to communicate in Council which made it difficult for traditional leaders to participate – it made them feel like parcels who merely listened to Council without participating. Council was trying to accommodate them by ensuring the addition of Tsonga and Venda where possible. A forum was regularly held where the Mayor met with all the traditional leaders. The traditional leaders had been supportive and receptive to the imbizos including the one that was held two days before. There was not a single event in the municipality where traditional leaders were not present. The relationship was sound, and the municipality relied on them in everything they did.
The Chairperson revisited the reluctance of the municipality to institute civil claims and the recovery plan. He should not need to be advised on how to deal with the claims as it formed part of the sole responsibilities of an accounting officer. She asked for feedback by the 13 December. The municipality had been flagged because it had been said that the Committee tended not to follow-up on their oversight visits. The Committee would continue to engage to ensure that the irregular expenditure and consequence management were dealt with. The Committee looked forward to receiving the reports.
The Chairperson asked Mr Lebea as Speaker for the Council responsible for oversight how the VBS matter could happen on his watch. What mechanisms had been put in place to ensure it would never occur again. Did Council have the capacity to interrogate the section 71 reports and to check up on the financial position of the municipality.
Mr Lebea replied that Mr Shilenge reported on the change in the investment policy. Those who had invested the municipality's money in VBS Mutual Bank had taken advantage of the policy approved by Council. They said Council had delegated powers to the municipal manager to invest on behalf of Council but in consultation with Council. Unfortunately, they had not consulted with Council and it was only detected that the municipality’s money had been invested when Council received a section 71 report. Upon receipt of the report Mr Lebea visited the office of the Mayor to find out if she had been aware of the R120 million investment in VBS Mutual Bank. The former Mayor was not aware, and she and Mr Lebea agreed that the matter should be referred to Council. The former municipal manager and former CFO were the implicated individuals as their signatures appeared on the section 71 report. Council approved their suspension following the process in line with the regulations. The former CFO did not challenge the outcome of the disciplinary hearing and instantly resigned. The former municipal manager challenged the municipality and the matter went to court. The court a quo ruled in her favour and the municipality appealed and won and she ended up being suspended. The outcome of the disciplinary hearing was that she was cleared of all wrongdoing and was found not guilty. Council sought legal advice and challenged the outcome of the disciplinary process which was subsequently submitted to the Labour Court for review. Council awaits the Labour Court outcome. People had been killed for speaking out about the VBS Mutual Bank matter. It was high time that the law enforcement agencies did their work and the Committee should write to them. The forensic audit had been conducted by National Treasury in all municipalities affected by VBS Mutual Bank. The forensic report outlined everything and the only thing left was for the law enforcement agencies to act. There was no need for the Committee to ask the municipalities affected unless Members wanted to continue hearing stories about individuals dying after speaking out on the VBS Mutual Bank matter. Mr Lebea felt it was high time action was taken on the VBS Mutual Bank matter instead of constantly talking on it. He repeated his sentiments.
The Chairperson thanked the municipality for their engagement and excused them.
Mogalakwena Municipality (continued)
The Chairperson asked Mr Hoosen to continue with his previous line of questioning.
Mr Hoosen cited the Chairperson's concerns about the size of the Mogalakwena delegation. The correspondence sent to municipalities had been specific about who should attend. He asked Mr Mashamaite how he knew of the Committee meeting and what circumstances brought him there.
Mr Jabu Mashamaite, Deputy Manager of Corporate Services, replied that he was told about the meeting by his manager who had asked him questions about recruitment that had taken place in the municipality. She saw to it that he attended because he had been manager for recruitment and appointment of service providers and would be able to answer Members' questions.
Mr Hoosen understood that he was present on instructions of his manager?
Mr Mashamaite replied yes.
Mr Hoosen asked if Mr Mashamaite had been present at the 16 September meeting with the Committee.
Mr Mashamaite replied that he was but not for the entire duration.
Mr Hoosen had raised Mr Mashamaite’s name with the Mayor as he appeared to have a reputation in the municipality for organizing tenders for businesses. Mr Hoosen had been told this information by some councillors who had contacted him. Was there any truth in that?
Mr Mashamaite replied that he found it disturbing for members of the public and councillors to mislead the Committee in that manner. They were all aware of the strong supply chain management system that dealt with the award of tenders. His duties were far removed from the tender process. He was not a middleman but an employee in the institution responsible for duties he was employed to do. The statements were false.
Mr Hoosen asked if the people were lying.
Mr Mashamaite replied that they were.
Mr Hoosen asked if Mr Mashamaite knew a man named Patrick Molefe.
Mr Mashamaite knew Mr Molefe from the ANC.
Mr Hoosen asked how he would describe his relationship with him.
Mr Mashamaite replied that they do not have a relationship; they merely came from the same township.
Mr Hoosen handed Mr Mashamaite a copy of a document he had before him.
Mr Hoosen asked if Mr Mashamaite had seen the documents before.
Mr Mashamaite replied that it was a bogus document and that he was aware of it.
Mr Hoosen referred to the fifth page of what Mr Mashamaite called a ‘bogus document’. It was an affidavit and Mr Hoosen directed Mr Mashamaite to where it read: ‘states under oath that I worked for Mogalakwena municipality for removal of illegal dumping’. Mr Hoosen said that Mr Molefe alleged in the document that Mr Mashamaite had acted as a middleman between himself and a company called KTS Trading. Mr Hoosen asked Mr Mashamaite if that was true.
Mr Mashamaite replied that it was not true. He was not a middleman.
Mr Hoosen asked him if he had any relationship with KTS Trading.
Mr Mashamaite replied that he did not have a relationship with KTS except that they were a service provider in the municipality.
Mr Hoosen asked he had ever met with KTS Trading at any stage or if he knew who the owners were.
Mr Mashamaite replied that he knew who the owners were.
Mr Hoosen asked what his name was.
Mr Mashamaite replied that his name was Mr Mashishi.
Mr Hoosen asked if Mr Mashamaite had had any discussions with Mr Mashishi about municipality tenders.
Mr Mashamaite replied that he did not as he did not get involved with municipality tenders.
Mr Hoosen said Mr Molefe referred to monies that were paid to him for work done in the municipality. Instead of the money being paid to him from KTS Trading, Mr Molefe alleged that Mr Mashamaite used to meet with him to pay him the monies owed to him. Had that ever happened?
Mr Mashamaite replied no and that was not how the municipality paid money. He had never met with Mr Molefe about payments of money. The document had come to his attention before and he had written a letter to Ms Gunqisa warning her against such things as that she was subjecting the municipality to fraudulent activity. People had been paid to create the affidavit and he cited the MFMA which stated an affidavit was not a qualifier to a payment as there was no proof that the job had been done and there was no contract between KTS, Molefe and himself. He asked Ms Gunqisa in writing how she could go to such an extent. In addition to Mr Molefe, there was Mr Dan Gomo who also alleged to have worked in the municipality and had been paid millions of rands for a job that had never taken place. He warned Ms Gunqisa not to subject the municipality to fraudulent activity. He said she could have called him to ask if he knew those people. Anyone could create an affidavit, even a person from Cape Town could go to Mogalakwena to create an affidavit, and Ms Gunqisa would pay them. He denied any involvement to Ms Gunqisa and warned her in his letter to not subject the municipality to fraudulent activity.
Mr Mpumza interrupted Mr Mashamaite to repeat if he wrote a letter in which he ‘warned’ Ms Gunqisa.
Mr Mashamaite withdrew that word and said he 'advised' Ms Gunqisa against such a practice as the things said about him were not true.
Mr Hadebe asked if him if he was saying that Ms Gunqisa made payments based on the affidavit.
Mr Mashamaite replied millions were paid out for work that was never done based on affidavits. In his letter to Ms Gunqisa he advised her that an affidavit was not a qualifier for a payment. If a service provider claimed he had not been paid for work completed, Mr Mashamaite should have been able to confirm if the work had been done. However, Ms Gunqisa simply paid millions of rands to those people.
Mr Hoosen referred to the affidavit and agreed with Mr Mashamaite that anybody could draft an affidavit, so he wanted to give him and opportunity to respond to it. He read out three sentences where Mr Molefe said, ‘when I was supposed to get my money through the bank, to my surprise Jabu calls me to the entrance of town when you come from Maraleng near the bridge and I found him there. He told me to go to the tree where I found the plastic bag with my money inside. The amount was R45 000. The money was put by Makufane who also worked in the municipality.’ Mr Hoosen asked if Mr Mashamaite had ever met with Mr Molefe that day by the bridge.
Mr Mashamaite replied that it was false and scary for money to be dumped under a bridge for Mr Molefe to collect.
Mr Hoosen said Mr Molefe further alleged that when Mr Mashamaite handed the money to him, Mr Mashamaite took his R5000 share which he claimed to be tax. Was that also not true?
Mr Mashamaite replied that anything emanating from the document was bogus and he did not admit to it.
Mr Hoosen asked if Mr Mashamaite was submitting that nothing Mr Molefe said had any truth to it.
Mr Mashamaite replied that he had no dealings with Mr Molefe and other people who were paid through affidavits.
Mr Hoosen asked Mr Mashamaite if he was not aware Mr Molefe was to receive payment from the municipality.
Mr Mashamaite replied that he was not aware. All he knew is that people got paid millions of rands for jobs they never completed. Ms Gunqisa made payment for work which had not been done without any verification.
Mr Hoosen asked if he had received any benefit from KTS Trading or any other company.
Mr Mashamaite replied that that he had not and if he had, he would have declared it.
Mr Hoosen asked why Mr Molefe would make the allegations against Mr Mashamaite. What would have been his motive?
Mr Mashamaite replied that he later realized there was a plot by Ms Gunqisa and the cabal to tarnish his image and get rid of him. The cabal were gentlemen from the township who felt Mr Mashamaite was standing in their way. It was a plot because it turned out to be true after the affidavits had been fabricated to implicate him and were presented to the municipal manager's office. Ms Gunqisa made the payments and thereafter charged Mr Mashamaite without even talking to him.
Mr Hoosen said that he would stand down on that matter and other Members can ask questions.
Mr Mpumza asked how much money had been paid and if Mr Mashamaite had proof of such payments.
Mr Mashamaite replied that Mr Charles Malema, CFO, could attest to how much had been paid but the amount was close to R4 million. He said Ms Gunqisa could talk about it as she paid the individual despite the lack of a contract or consent from Mr Mashamaite.
Mr Hadebe asked what the standard procedure was to process payments in Mogalakwena.
Mr Mashamaite replied that there was an order from the finance supply chain. The order needed the signature of the manager in the department where the job had been done.
Mr Hadebe wanted to understand the sequence of events and who was responsible for signatures ultimately leading up to payment being made.
Mr Mashamaite replied that Mr Malema as the CFO was the relevant person to answer the question.
Mr Hadebe pointed out that when transactions were processed, they arose from services rendered or goods received in the form of an invoice which was evaluated to confirm that what had been done corresponded with what had been submitted. He asked if there were circumstances were monies were paid without verification of the goods or services rendered to the municipality.
Mr Charles Malema, CFO, agreed that there was a need for goods to be provided or services to be rendered. The relevant department should prepare a memorandum requesting Mr Malema and Ms Gunqisa to first approve the procurement. An order that indicated that money was available was issued and the service provider would perform based on the order. After the work had been done, the service provider would submit the invoice and the user department would certify that the work had been done and would then approach the finance department for payment processing which Ms Gunqisa approved. However since his arrival at Mogalakwena, he realized things were done differently.
The Chairperson asked when he arrived.
Mr Malema replied that he began there in October 2018.
Mr Hadebe asked if transactions should not be processed without the approval of the finance department.
Mr Malema agreed. However, things were done differently in Mogalakwena. In most cases the user department would give instructions for services to be performed without his, as the CFO, or Ms Gunqisa’s knowledge. In the second week of his arrival he issued a circular trying to stop that practice and spelled out the correct process to be followed. Two months later nothing had changed so he issued another circular. After Ms Gunqisa’s arrival, another circular was issued because service providers would perform, and Mr Malema and Ms Gunqisa would be informed after the fact when payment was demanded.
Mr Malema said he met Mr Molefe when he came to Mr Malema’s office demanding payment. That was when Ms Gunqisa had recently been appointed and Mr Malema referred Mr Molefe to Ms Gunqisa. Mr Malema explained to Ms Gunqisa that Mr Molefe had claimed he had done some work.
Mr Hadebe asked what work Mr Molefe claimed he had done.
Mr Malema replied that Mr Molefe dealt with illegal dumping that was carried out outside of the process.
Mr Hadebe asked who the project manager was assigned to the work…
Due to load shedding, the meeting was suspended and postponed.
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