ATC151028: Report of the Select Committee on Cooperative Governance and Traditional Affairs on notice of Investigation In terms of section 106(3)(A) of the Local Government Municipal Systems Act, No. 32 of 2000 in Hlabisa Local Municipality, dated 27 October 2015

NCOP Cooperative Governance & Traditional Affairs, Water and Sanitation and Human Settlements

REPORT OF THE SELECT COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS ON NOTICE OF INVESTIGATION IN TERMS OF SECTION 106(3)(a) OF THE LOCAL GOVERNMENT MUNICIPAL SYSTEMS ACT, No. 32 of 2000 IN HLABISA LOCAL MUNICIPALITY, DATED 27 OCTOBER 2015 
 

1.     Background

 

1.1     On 03 August 2015, the MEC for Cooperative Governance and Traditional Affairs in KwaZulu-Natal tabled to the Office of the Chairperson of the (NCOP) a notice of investigation in terms of section 106(3)(a) of the Local Government Municipal Systems Act, No. 32 of 2000 in Hlabisa Local Municipality.

 

1.2     Subsequent to the tabling, the Chairperson of the NCOP referred the notice of intervention in terms of Rule 101, to the Select Committee on Cooperative Governance and Traditional Affairs, for consideration and report.

 

1.3     On 21 October 2015, during the loco inspection on the notice of intervention in terms of section 139(1)(b) of the Constitution in Indaka Local Municipality, the Select Committee also called the Department of Cooperative Governance and Traditional Affairs for a briefing on the notice of investigation in terms of section 106(3)(a) of the Municipal Systems Act in Hlabisa Local Municipality.

          

2.      Objectives of the Briefing Session

 

2.1     The objective of the session was to accord the Department of Cooperative Governance and Traditional Affairs an opportunity to brief the Select Committee on        the progress made with regard to forensic investigation in terms of  section 106(3)(a) of the Municipal Systems Act in Hlabisa Local Municipality.

 

 

 

 

 

3.       Presentation on Notice of Investigation in terms of Section 106(3)(a) of the Municipal Systems Act in Hlabisa Local Municipality     

 

3.1     On 21 October 2015, the Department of Cooperative Governance and Traditional Affairs briefed the Select Committee on notice of investigation in Hlabisa Local Municipality. The presentation focused on the background; discussion and conclusion.  

 

4.      Background

 

4.1     The Department received allegations from members of the public, SANCO and SAMWU relating to the Hlabisa area and in respect of fraud, corruption and maladministration occurring at the Hlabisa Local Municipality. The Department conducted a preliminary investigation to finalise the scope of the investigation after which the following scope of investigation was formulated:-

 

•         The HR Manager who assumed her duties in 2012, has been submitting claims for using her car for work purposes but has only got her driver’s license in May 2014.
•         The alleged misrepresentation by claiming that she had a diploma in Financial Management while applying for the SCM Manager position. SAMWU raised concerns about the candidate in question and it was discovered that the appointed candidate has no relevant qualifications and Municipal Manager was forced to resign.

 

•         Administrator position in the office of the Speaker which was advertised as a contract with Public Management and driver’s license as the minimum requirement, but Municipality appointed someone who does not have matric or driver’s license.
•         The Payroll Clerk position which was at task grade five and the salary paid at task grade six.

•         The allegations that the HR Manager takes home staff personal files of which some do not come back to the Municipality.

•         The allegations that the HR Manager changes the Municipality organogram as and when it suits her and fulfils the requirements of the governing party voting majority at council meetings, and as a result the Hlabisa Local Municipality staff exceeds the required number of staff for rural Municipality.
•         The alleged irregular employment of the Mayor’s brother at the Library.
•         The alleged irregular employment of fiancé of the Mayor’s brother at Finance Section.

 

•         The alleged irregular employment of the Manager: Corporate Services who allegedly caused uMkhanyakude Municipality to go bankrupt.
•         The alleged irregular employment of the Deputy Director: Corporate Services (purchase of water tanks who is a former councillor).
•         The alleged corruption on the Municipality as funds allocated for water tanks were given to the chairperson of a certain political party, and funds for poverty alleviations project were used to purchase his goats.
•         The alleged irregular awarding of tender for fencing Traffic Department to the former speaker of the Municipality for an amount of R250,000.00.
•         The irregular awarding of the leasing contract to the former Speaker. This lease pertains to a property which was previously leased by Standard Bank.
•         The alleged irregular awarding of tender to the former Speaker for Parks Department tender, which includes installation of lights, jojo water tanks and mlabalaba.
•         The alleged irregular use of EPWP funds amounting to R1 million.
•         The alleged abuse of Mayoral vehicle by a certain clerk and no actions taken against him even when he was involved in a number of accidents.
•         The alleged discrepancies in salaries whereby the Manager Human Resource is paid more than other managers and has travelling allowance.
•         The alleged acquisition of a new Mayoral vehicle amounting to R400,000.00 in 2011 which was abused by Mayoral Driver/Body guards and as a result its engine seized up within three months.
•         The alleged hiring of a Mayoral luxurious mercedes benz costing R400,000,00 after the above mentioned vehicle engine seized up which was chevrolet captiva.
•         The alleged irregular purchase of Mayoral luxurious mercedes benz for an amount of R500,000.00 which is used for private purpose such as going to school as principal and also attending his political party campaigns.
•         The alleged irregular employment of traffic officer who had allegedly committed fraud and corruption at Umhlabuyalingana Municipality who resigned within three months of his appointment at Hlabisa.
•         The alleged refusal by Mayor to recognise and authorise the ward 2 Committee to operate and meet its objectives due to his political affiliations of ward committee members.
•         The alleged fraud and corruption by officials from Traffic Department who are allegedly issuing fraudulent learners for code 14.

 

•    The alleged failure by the Municipality to honour its promises to the community regarding the electrification during 2013/2014 financial year.
•    The alleged failure by the municipality to secure dumping area contravening the environmental health regulations resulting in a death of the community life stork.
•         Alleged SCM irregularities surrounding the process of obtaining suppliers for HIV/AIDS events.
•    Alleged irregular purchase of a municipal grader (tractor).
•         Alleged irregular and excessive expenditure of municipal funds using the disaster vote.

 

5.     Discussion

 

5.1     On the basis of the aforementioned scope, the MEC designated Roshan Morar Inc. to conduct the investigation in terms of section 106(1)(b) of the Systems Act. On 31 March 2015, Department officials proceeded to the Municipality to introduce the service provider in order that the investigators may commence the investigation.

 

5.2     The officials encountered resistance from the Mayor and Speaker during the meeting and the Speaker even expressed that they wanted the MEC to rewrite the letter introducing the service provider in a manner that suites the Municipality.

 

5.3     However, the meeting was concluded, introductions were done and the letter from the MEC informing the Mayor of the scope of the investigation and the investigators details was delivered to the Municipality.

 

5.4     On 01 April 2015, the service provider commenced with the investigation and wrote to the Department citing non-co-operation from the Municipality and that they have been “chased away” by senior municipal officials citing that they have not been appointed officially by the MEC, despite the service provider being introduced formally by Department officials on the 31 March 2015. Request for documentation by the investigators were made to the Municipal Manager, with no success.

 

5.5     A letter was sent to the Municipality by the MEC requesting the Municipality’s immediate cooperation in the matter, however, the letter did not affect or change the Municipality’s attitude towards the investigation.

 

5.6     The allegations made are of a serious nature and the investigation is statutory in nature and tantamount to statutory non-compliance and a challenge to the exercise of the MEC’s executive authority and statutory obligations.

 

5.7     This matter has been referred by the MEC to the Legal Services for consideration of further steps to ensure co-operation and to proceed with the investigation. Based on legal advice received, the Department is undertaking an inter-governmental dispute resolution process, hence the Municipality’s failure or refusal to co-operate with the investigation.

 

6.       Select Committee Observations

 

6.1     The Select Committee has observed and noted that the Department of Cooperative Governance and Traditional Affairs has not yet completed the scope of the forensic investigation in terms of section 106(3)(a) of the Municipal System Act in Hlabisa Local Municipality. 

 

6.2     The Select Committee has then noted that on 01 April 2015, the service provider commenced with the investigation and wrote to the Department citing non-cooperation from the Municipality and that they have been “chased away” by senior municipal officials citing that they have not been appointed officially by the MEC despite the service provider being introduced formally by Department officials on the 31 March 2015. Request for documentation by the investigators were made to the Municipal Manager, but with no success.

 

6.3     The Select Committee has further noted that non–cooperative by the Municipality has been referred by the MEC to Legal Services for consideration of further steps to ensure co-operation, and to proceed with the investigation. Based on the legal advice received, the Department is undertaking an inter-governmental dispute resolution process.

 

7.     Recommendations

 

7.1     Having been briefed on the notice of investigation in Hlabisa Local Municipality, the Select Committee recommends to the NCOP as follows: 

 

7.1.1 The NCOP notes the preliminary report on the limitation and challenges related   to the forensic investigation in terms of section 106(3)(a) of the Local Government: Municipal System Act, No.32 of 2000 in Hlabisa Local Municipality.  

 

7.1.2 The Department of Cooperative Governance and Traditional Affairs in KwaZulu-Natal should table the final report, immediately after the completion of the forensic investigation, to the NCOP and the KwaZulu–Natal Provincial legislature.   

 

Report to be considered.