BRIEFING
1. PURPOSE
To provide a briefing report to the Portfolio
Committee on Local Government and Traditional Affairs on the intervention by
the Executive Council of the Province of KwaZulu-Natal undertaken in terms of
Section 139 of the Constitution at the eMadlangeni (Utrecht) municipality and
the present status quo in the municipality.
2. LEGISLATIVE
PROVISIONS
Section 106 (1) (b) of the Municipal
Systems Act, provides as follows;-
“_ (1) If an MEC has reason to believe that a municipality in
the province cannot or does not fulfil a statutory obligation binding on that
municipality or that maladministration, fraud, corruption or any other serious
malpractice has occurred or is occurring in a municipality in the province, the
MEC must-
(b) if the
MEC considers it necessary, designate a person or persons to investigate the
matter”
Section 139 (1) (b) of the
Constitution, provides as follows;-
“When a municipality cannot or does
not fulfil an executive obligation in terms of the Constitution or legislation,
the relevant provincial executive may
intervene by taking the appropriate steps to ensure fulfillment of that
obligation, including-
(b)
assuming responsibility for the relevant obligation in that the
municipality to the extent necessary to –
(i)
maintain essential national standards or meet established minimum
standards for the rendering of a service;
(ii)
prevent that Municipal Council from taking unreasonable action that is
prejudicial to the interests of another municipality or to the province as a
whole; or
(iii)
maintain economic unity; or”
3. BACKGROUND
The reasons for the section 139 (Constitution)
intervention have their roots in a section 106
(Municipal Systems Act) intervention instituted by the MEC responsible for
local government.
The background to the intervention
in terms of section 139 of the Constitution is briefly the following
:-
3.1
During
September 2006 the Department of Local Government and Traditional Affairs
received various reports of maladministration, fraud, corruption and other
serious malpractices in the
3.2
As
result of these reports Dr Z L Mkhize (who was acting as MEC at that time)
resolved to investigate the reports and complaints received by the department,
and appointed a firm of consultants to investigate the allegations.
3.3
The
investigation was to ascertain the factual position around the allegations made
in respect of:
·
Irregularities
in the recruitment process and in particular in the appointment of the Manager:
Corporate Services;
·
Irregularities
in the allocation of sites of Grootvlei
·
Irregularities
in the allocation of housing within Goedehoop Low Cost Housing Development ;
·
Irregularities
relation to expenditure on Poverty Alleviation funds and Local Economic
Development Projects;
·
Possible
irregularities in the appointment and payment of Ufezele Management Solutions;
·
Irregularities
in the management of Game Park, repairs to lap top, submission of fictitious
invoices in order to collect monies from the suppliers, utilization of
municipal staff during overtime to carry out private duties;
·
Overpayments
on S & T claims for Councillor ME Khoza for 2005/2006 and 2006/2007
financial year;
·
To
investigate the creation, establishment, Business Plan, Council resolution and
value for money of Groot Hoek Poultry Project;
·
To
investigate the creation, establishment, Business Plan, Council resolution and
value for money of AIDS Garden Poultry Project.
·
Grant
to municipality by Velgedagt Coal Mine;
·
Grant
to the municipality by MEC for Local Government and Traditional Affairs and
·
Any
consequential matters that may surface during the investigation
3.4
Reports
were received that certain Councillors attempted to frustrate the
investigation, and accordingly an application was made to the High Court for an
order suspending Councillors M E Khoza and B C Mabaso as Councillors pending
finalization of the investigation.
(Councillor Khoza is the Mayor of the Municipality.) The application was granted by Mr Justice Moleko. The Councillors have however sought leave to
appeal against Judge Moleko’s decision and that application is still pending.
3.5
On
14 May 2007 the investigators reported on the outcome of their investigation
and made the following recommendations :-
3.5.1
that
disciplinary action should be taken against certain Councillors (including
Khoza and Mabaso) and the Municipal Manager for failing to comply with the
municipality’s Recruitment, Selection and Appointment Policy;
3.5.2
that
disciplinary action should be taken against the Municipal Manager and
Councillor Khoza for irregularities in the allocation of sites;
3.5.3
that disciplinary action should be taken against Messrs Zungu and Mtshali
for unauthorized allocations in the Goederhoop Low Cost Housing Development.
3.5.4
that
disciplinary action should be taken against Messrs Zungu and Ndlovu for
irregularities in the expenditure of Poverty Alleviation Funds and local
economic development projects, and that the Municipal Manager and other
officials be charged with financial misconduct;
3.5.5
that
the Municipal Manager and Chief Financial Officer should be held liable for
unauthorized expenditure and charged with financial misconduct relating to the
employment of consultants;
3.5.6
that
a criminal case of fraud and theft should be registered against Mr R Stannard
and that charges of misconduct should be brought against a council employee
with regard to irregularities relating to the council game park;
3.5.7
that disciplinary action and criminal charges should be brought against
Councillor Khoza for wrongful claims for S and T, and that charges of
misconduct be brought against the Municipal Manager as a result.
3.6 Accordingly the report seriously
implicates the Mayor (Councillor Khoza, who also acts as Speaker) and four
senior council employees, including the Municipal Manager and CFO.
3.6.1 In accordance with normal
practice the report was referred to the Utrecht Municipal Council requesting it
to report within 21 days on the action that the council intended to take as a
result thereof.
3.6.2 Despite the fact that the
deadline of 21 days expired and more than 3 months had elapsed since the Report
was provided to the municipal council, it failed to take any action against
those implicated in the report, and no disciplinary action has been instituted
against either the Councillor concerned, or the Municipal Manager and other
senior council officials.
3.6.3 The Council is under a
statutory obligation arising from various pieces of legislation to act if there
is unlawful or irregular activity taking place within the council or the
municipality. It has not complied with
these regulations.
3.7 Arising from, inter alia:
3.7.1 the municipal
council’s failure to discharge its executive obligations and to invoke the
required disciplinary procedures as contemplated by the MFMA, the Systems Act
and the Code of Conduct;
3.7.2 the
municipal council and municipal employees’ failure to discharge their
obligations to institute disciplinary proceedings against the Councillors or
against the municipal employees named in the report (as the case may be);
3.7.3. the delay in taking action;
3.7.4 the
fact that the Mayor is alleged to have committed serious infractions in the
report;
3.7.5 the
fact that the most senior council employees are named in the report, and
3.7.6 the
fact that it was necessary to intervene because of earlier allegations of
interference with the investigations,
It was
recommended to the Provincial Executive Council that it should resolve to
intervene in the
3.8 On 22 August 2007 the
Provincial Executive Council resolved to intervene in the eMandlangeni
Municipality, as follows :-
3.8.1. The Executive
Council appoints a special committee or committees to investigate and make
findings of the allegations against the Mayor Councillor Khoza and any other
Councillor arising from the Special Investigation Report into Allegaions of
Mismanagement, Maladministration, Fraud and Corruption at Utrecht Municipality,
dated 14 May 2007 (“the Special Investigation Report”) and on breaches of the
Code of Conduct for Councilors arising therefrom as contemplated in item
14(a)(b)(i) of the Code;
3.8.2. The Executive
Council appoints a special committee or committees to investigate and make
findings on the allegations against municipal employees arising from the
Special Investigation Report and on breaches of the Code of Conduct for
Municipal Staff Members and all applicable legislation arising therefrom, as
contemplated in item 1 of the Code of Conduct for Municipal Staff members, read
with section 67(1)(h) of the Local Government: Municipal Systems Act, 32 of
2000, and the Disciplinary Procedure Collective Agreement (if applicable);
3.8.3. That the MEC
for Local Government and Traditional Affairs be authorized to appoint the
relevant special committee or committees for the proposes of conducting the
investigations and making the findings contemplated above;
3.8.4. That the
Executive Council directs that the special committee or committees appointed make
recommendations to the Executive Council on the appropriate sanctions to be
imposed on the Councillors and municipal employees who are found to have
committed a breach of the applicable code or committed a disciplinary offence;
3.8.5 That the Mayor
Councillor M E Khoza, the Municipal Manager (V M Kubeka) and municipal employee
B Zungu be suspended pending the outcome of the procedures contemplated above.
3.8.6 That the MEC
be directed to appoint an Acting Municipal Manager to act on behalf of the
Municipal Manager pending the outcome of the procedures contemplated
above.
4. CURRENT
STATUS
4.1 The following actions have been taken in
accordance with the resolution of the Provincial Executive Council
:-
·
The
NCOP has been notified of the intervention in the
·
The
Minister for Provincial and Local Government has been informed of the
intervention in the
·
Letters
of suspension from office have been served on the Mayor and Municipal Manager
of the Municipality.
·
A
special committee, comprising of Advocate M Mkhize,
and Attorney E Ngubane has been appointed to investigate and make findings on
the allegations against those implicated.
·
An
acting Municipal Manager has been appointed, provided with comprehensive terms
of reference and has assumed duty.
·
The
suspension of the Speaker /Mayor results in the council’s decision making
process being compromised. It is
therefore necessary for the council to elect an Acting Speaker/Mayor in terms
of section 41, read with section 36 (3)
of the Municipal Structures Act.
4.2 The
Minister designated the General Manager: Local Government to conduct such
election. eMadlangeni
has 7 councillors, including Councillor Khoza, who is suspended. The election of an Acting Speaker, (Mayor)
was delayed on two occasions by 3 councillors removing themselves from the
meetings. Arising from the equality of
votes, a further three meetings were required to formally elect an Acting
Speaker, by lot, in terms of item, 8 (3) of Schedule 3 to the Municipal
Structures Act.
5. ADDITIONAL
MATTERS
The Acting
Municipal Manager has, in accordance with his terms of reference, provided a
comprehensive report on the practical operations of the municipality, dated 18
October 2007. The report details:-
·
Numerous
cases of maladministration related to Human Resource matters, including
incorrect calculations of leave, incorrect salaries paid, overpayment of
salaries and the possibility of ghost employees, have been identified.
·
Non-compliance
with many of the provisions of the Municipal Finance Management Act (MFMA)
abound.
·
There
are institutional, organisational and capacity constraints which are impacting
negatively on the municipal administration.
·
The
municipality failed to submit financial statements in terms of section 126 of
the Municipal Finance Management Act.
This has subsequently been rectified.
·
The
Provincial Management Assistance Programme is in the process of compiling a
recovery plan to address the administrative shortcomings.