Mpumalanga COGTA MEC on the Status of Interventions and Forensic Investigations in the municipalities

Meeting report

The Chairperson greeted Members and informed them that the National Council of Provinces (NCOP) had been invited to the meeting. The meeting would be led by Ms Busisiwe Shiba, Mpumalanga MEC for Cooperative Governance and Traditional Affairs, who was going to brief the Committee on the status of interventions in selected municipalities in Mpumalanga. These local municipalities included Dr Pixley Ka Isaka Seme, Govan Mbeki, Lekwa, Dr JS Moroka, Dipaleseng, Nkomazi, Emalahleni, and Bushbuckridge. In each of these locations, the MEC invoked Section 106 of the Municipal Systems Act of 2000 to investigate certain matters. The Committee had visited these municipalities in the past years, or at least interacted with them at some stage.

There were serious interventions in some of these municipalities. Section 139 of the Constitution was invoked in some of these municipalities as the provincial government felt that municipal actors were not fulfilling their executive obligations according to the Constitution. However, this meeting would not cover interventions or reports related to Section 139. The Committee had received reports about Section 106 of the Municipal Systems Act that determined the requirements of the provincial government - and specifically the obligations of the COGTA MEC - regarding issues involving fraud, maladministration, corruption and other allegations. Section 106 indicated that the MEC was obligated to inform the NCOP as well as other players such as the Minister of COGTA about these investigations. Once the investigations were concluded, reports had to be tabled to the NCOP and the Provincial Legislature.

South Africa had just held successful local government elections a few weeks prior. The people of the country had spoken. They had chosen the councillors and “puppet masters” of their choice. Hopefully, this time around, the councillors chosen would do everything in their power to turn the tables and aid the function of local government systems. That would only be possible if the Committee exercised its oversight function optimally, since elected councillors needed to be held accountable for their actions. Where wrongdoings occurred, the Committee needed to make the recommendations for resolution. Where successes happened, the Committee needed to showcase the committed political players who could carry out the objectives of local government. The MEC was invited to present.

Briefing to the National Council of Provinces on Progress Report Interventions In Terms of S106 of the Local Government: Municipal Systems Act, 2000, in Dr Pixley Ka Isaka Seme, Govan Mbeki, Lekwa, Dr JS Moroka, Dipaleseng, Nkomazi, Emalahleni and Bushbuckridge Local Municipalities

MEC Shiba noted that she had not received feedback about the ongoing investigations from all municipalities yet. However, the Department had received some feedback before the elections which she was going to present. The first appendix in the presentation included information about the municipalities that had not yet offered feedback. A synopsis of the report would be given.

Background and Introduction

The Department conducted investigations in terms of S106 (1)(b) of the Local Government: Municipal Systems Act, 2000 in the following municipalities:

- Lekwa (July 2018)

- Dr JS Moroka  (March 2020)

- Dr Pixley Ka Isaka Seme (June 2020)

- Govan Mbeki (June 2020)

The investigations had been completed in Dipaleseng (16 September 2021), Nkomazi  (01 October 2021) and Emalahleni (12 November 2021).

Investigations were still ongoing in Bushbuckridge

MEC Shiba noted that Slide 15, Annexure A, offers detailed summaries, findings and progress reports updating the Council on reports that still needed to be tabled to Councils.

The Chairperson interjected to say that he had serious concerns. MEC Shiba was giving overviews that addressed the findings and the general state of processes with law enforcement agencies. The meeting was recorded live on television, and South Africans would want to know what the allegations specifically involved.

The allegations involved stealing, misconduct, housing, and maladministration. These issues warranted thorough investigations. Mec Shiba needed to offer more information about the nature of the investigations in each municipality. Committee Members needed to know more about the details which each investigation entailed. The Chairperson asked MEC Shiba to address these details in the presentation.

MEC Shiba thanked the Chairperson for his feedback. Requesting to move onto slide 17 of Annexure A, she went on to discuss the detailed aspects of the allegations made in Dr Pixley Ka Isaka Seme local municipality, followed by the detailed analyses of allegations in Govan Mbeki, Lekwa, and Dr JS Moroka.

Dr Pixley Ka Isaka Seme Local Municipality:

-Acts of maladministration levelled against the office bearers and employees.

-Interference by the Executive Mayor in the administration of the municipality.

-Irregular payments of overtime.

-Non-implementation of municipal council resolutions.

-Underspending of Municipal Infrastructure Grants (MIG) funds.

-Irregular extension or termination of contracts for a service provider, as well as abuse and non-compliance with the supply chain management processes.

-Abuse and non-compliance with the supply chain management processes, including fictitious quotations and/or suppliers.

-Non-compliance with recruitment and selection procedures, as well as nepotism.

-Misconduct of the executive Mayor and the municipal manager in the acting appointments of the said individuals without obtaining council resolution.

-Acting appointments were made in contravention of S56(a)(ii) of the Local Government: Municipal Systems Act 32 of 2000.

-Failure to complete initiated projects.

-Irregular selling of Reconstruction and Development Programme (RDP) houses and empty stands.

-Irregular appointment of subcontractors.

-Shembe Church and AFM church stands had been irregularly used to build houses.

-The total collapse in the Human Settlement Departments particularly with regard to the allocation of stands.

 

Govan Mbeki Local Municipality

-Non-compliance with the recruitment, selection and acting appointment procedures, as well as nepotism. 

-The appointment of the Chief Financial Officers was made in contravention with the Local Government: Municipal Systems Act 32 of 2000.

-Non-implementation of municipal council resolution.

-Irregular maladministration in the awarding of bursaries. 

-Irregular extension or termination of service providers’ contracts.

-Irregular spending and underspending of MIG funds and Water Services Infrastructure Grants (WSIG).

-Failure to complete initiated projects.

-Abuse of and non-compliance with the supply chain management processes, including advertising of tenders.

-Wrongful disciplinary action against employees.

 

Lekwa Local Municipality

-No proper controls and financial stability in the municipality. The Municipality had a financial deficit of R300 million, was over-indebted and was behind on SARS and ESKOM debt payment.

-The Municipality had an irregular expenditure of R1 billion as per the audit report.

-The Municipality's budget was not funded for the past three years.

-The appointment of the service provider (valuer), the compilation of the new General Valuation Roil, and the extension of the existing General Valuation Roll was done contrary to the amended Local Government: Municipal Property Rates Act of 2004.

-The Municipal Manager had disbanded the Supply Chain Committees and invoked Municipal Supply Chains.

-Management Regulation 32 of 2005 (also referred to as Regulation 32) was invoked without fully adhering to the requirements of Regulation 32(1).

- The recommendations made by the municipality's Bid Evaluation Committee and Bid Adjudication Committee were never considered by the Municipal Manager.

-Service providers appointed in terms of Regulation 32 were paid an estimated amount of R8 million on 03 February 2018 whilst the site handover meeting was scheduled for 05 February 2018. This implied that the said service providers were paid before any work was done. Local co-operatives who were also appointed in terms of Regulation 32 had not been paid to date.

-There were no procurement plans in the municipality and there was no competency bidding.

-The Local Economic Development Unit was not run properly by the municipality.

-MIG funds were not spent in terms of the MIG Framework and applicable National benchmarking by the end of December 2017.

-Incapability of the municipality to deliver basic services in a sustainable manner. There were sewerage spills, unreliable supplies of electricity and water shortages.

 

The Chairperson paused the presentation again to say that he was concerned about time. Although he asked her to highlight the allegations, MEC Shiba did not need to read sentence by sentence. Rather, she needed to provide a summary of each allegation. The presentation had taken more than an hour and a half. The Members needed more time to consider each allegation individually, but they did not have enough time in that current session.

MEC Shiba said that she would try to summarise.

Dr JS Moroka

-The municipality was misusing public funds to pay overtime to certain officials for work not done.

-Abuse of mayoral vehicle by the Mayor.

-Non-implementation of council resolutions.

-The Municipal Manager was using security companies contracted to the municipality to provide his personal security.

-Misuse/abuse of council assets/property.

-Abuse of municipal petrol cards/fleet.

-Bursary wrongfully awarded to Ms Pheladi Riba.

-Bursary wrongfully awarded to Ms Magadi Bhoshomane, the daughter of Councillor Bhoshomane.

-Appointment of Ms Katlego Sekwala, the daughter of Councillor Monie Sekwala.

-Appointment of Ms Sarah Nkoana and Ms Gqibelo Ntuli, the wife of Councillor Madonsela.

-Appointment of Ms Manteka Anthia Maja, the wife of Councillor Ntlailane.

-Abuse of regulation 32 on the appointment of service providers resulted in fictitious invoices being submitted without services being rendered. Councillors interfered with procurement processes, where some service providers had been procured directly by councillors.

-Irregular extension of service providers’ contracts.

-Irregular appointment of two security companies currently contracted to the municipality.

- Allegations relating to the unspent MIG funds and service delivery issues.

-The submission of two different budgets and integrated development plan documents, which was against the law and led to the irregular appointment of staff.

-The reinstatement of an official without following recruitment and selection processes.

-R40 million was spent on the construction of a fresh produce market, which remained incomplete.

-R18 million for the Drought Relief Project was provided to Dr JS Moroka Municipality, but some of this money was used to drill boreholes in houses of municipal employees and councillors.

-Bidders of the project for the provision of internal audit services were awarded to companies not recommended by the Bid Adjudication Committee during the valid period.

-No price negotiation processes were undertaken for the project of water treatment chemicals.

The Chairperson interjected again and said that the presentation was extremely important. Although the presentation was very long, the information itself was very important. However, the Committee was only scheduled to be on the platform until 19h30 and the presentation would not be finished in time to make thorough comments. He suggested that the Committee allow the MEC to take her time and present the allegations properly, and then the Committee could reconvene the following week to make more comments. Otherwise, the MEC would not be able to finish her presentation. All of the municipalities mentioned were important and if the Select Committee wanted to apply their oversight functions, then they would need to take their time to understand all of the allegations. He did not want the MEC to rush, as this would prevent the Committee from engaging with the presentation and that would not be fair.

Mr E Mthethwa (ANC, KZN) said that there were a lot of areas that still needed to be finalised in the report. If the Committee had more time to hear all of the details of the allegations, it would help a lot. It would also give everybody more time to fill the gaps of unresolved matters. There were a lot of unresolved matters, so it would not be effective to hear an incomplete presentation.

Mr S Zandamela (EFF, Mpumalanga) said that he agreed with Mr Mthethwa. It would be better to go through the unresolved issues carefully. The Committee needed more time to engage with the progress reports and receive clarification on certain incomplete allegations.

Ms S Shaikh (ANC, Limpopo) agreed with the Chairperson’s suggestion. The MEC should have time to take the Committee through each allegation in detail. The Committee Members received the presentation quite late, so they did not have time to thoroughly check the presentation beforehand. The Committee needed time to ask questions because some of the information which was presented incited concern. There needed to be another session.

Ms B Bartlett (ANC, Northern Cape) agreed that there needed to be a follow-up meeting.

The Chairperson asked the MEC how many slides were left to present.

MEC Shiba responded that there were 94 slides to go through in total, and 11 slides left to go through.

The Chairperson said the Committee should allow the MEC to finish her presentation, and then the Committee could engage again later. Each of the allegations made had deeper stories and backgrounds. The Committee needed to attend to all of the issues comprehensively. The following week, it was urgent to deal with these municipal issues. The allegations were not only concerning, but they also required appropriate resolution. The following week, the Committee would need to go through the allegations one by one so that they could cross these issues off the list and offer clear recommendations in response to the investigations inducted against these municipalities in the Mpumalanga Province according to Section 106 of the Local Government: Municipal Systems Act of 2000. 

 

MEC Shiba thanked the Chairperson for his guidance. It was difficult to jump certain important details.

Conclusion

-Three municipalities, Dr Pixley Ka Isaka Seme, Govan Mbeki and Lekwa had shown progress in addressing the findings of the Section 106 investigation reports.

-Dr JS Moroka has made little progress in addressing the findings of the Section 106 Investigation reports. There was little commitment from Dr JS Moroka to implement the findings of the Section 106 investigation reports.

-The Dipaleseng, Nkomazi and Emalahleni reports will be tabled to the respective Municipal Councils for them to develop action plans to address the findings of the Section 106  investigation report.

Refer to the presentation for full details.

 

Discussion

The Chairperson reiterated that the presentation was very long but very important. The presenter tried her level best to stick to her time and share the necessary information. The Committee had an obligation to interrogate and follow up on this information so that they could develop appropriate recommendations. Based on time, and given the fact that the presentation was delivered to the Members late, the Chairperson requested that the Committee reconvene the following week. Another meeting time would be organised with his team, but Members should make themselves available the following week.

 

In the meantime, the presentation needed to fill out some of the gaps in information. Missing information was a problem, as the Committee needed those details to fully comprehend the way forward in each municipality. ‘When would the Committee receive the outstanding reports and updates from the municipalities? They would need this information if they were going to engage with all of the municipalities correctly. The presentation presented some scary information that reflected how municipalities had collapsed throughout the country. Those who were responsible need to correct these things’.

Ms Bartlett agreed with the proposal to have a follow-up meeting.

Ms C Visser (DA, North West) asked about the allegations which had been labelled as ‘resolved’. How were these issues resolved? And why were other allegations unresolved? The Committee could not leave these matters hanging in the air. There needed to be conclusions. 

The Chairperson said that Ms Visser’s question was important. The Committee needed to identify and isolate each of the allegations in the municipalities. The Committee needed to hear clear reasons why there were still outstanding issues that were unresolved.

Closing Remarks

The Chairperson said that in the presentation most of the allegations involved senior municipal councillors. Clearly, the investigations revealed that councillors were interfering with tenders and adjudication matters. Certain councillors were even appointing people and companies when they were not allowed to do so as determined by Section 107 of the Municipal Finance Management Act. Some of these councillors had given their friends, family members and kids’ jobs and bursaries. These acts were contrary to the law.

Some councillors would not come back, and would not be appointed to serve these municipalities again. However, the Committee should recommend that these cases go to court to prevent these councillors from receiving municipal pension funds. Until these cases were resolved, the councillors should not receive pensions. These people were utilising state finances contrary to the law. No action was taken against these fraudulent councillors yet, but the Committee should use their recommendations to demonstrate that they were serious about the financial situation of the municipalities. 

The Committee needed to stop fraudulent councillors and political actors from receiving state funds that could be used to help the poorest of the poor. Taking the pensions from these councillors could be a way to resolve these issues. This matter needed further discussion and consideration. The Committee needed to stop the perpetuation of criminal activities from senior municipal politicians. Revising each allegation carefully in follow-up meetings was an important part of the Committee’s oversight obligations. The Committee would also need to ask law enforcement agencies about their roles in mitigating these matters.

The Chairperson thanked the MEC and requested that she return for the follow-up meeting.

The meeting was adjourned.