On Tuesday, 26 August 2014, the North West Provincial Legislature’s Portfolio Committee on Local Government and Traditional Affairs requested the Administrator of Matlosana Local Municipality to fast track the action plan of the municipality.
This came after the Committee held a meeting with the municipality over its current state of affairs including matters pertaining to governance; bulk infrastructure; service delivery; corruption; and successes and challenges.
The municipality was placed under Section 139(1) (b) intervention by the Provincial Government in March 2013 as result of deteriorating financial status which compromised service delivery.
The Administrator at the municipality, Mr Paul Serote discovered that supply chain management was not operational and bid committees awarded tenders without sufficient documentation. For the financial year of 2013/14, the municipality has an unaudited irregular expenditure of R211 million.
“It was caused by non-submission of relevant documentation, tax clearance certificates and three quotations.
“There was a culture of employees defrauding the system through cover quoting by manipulating “three quotation system” whereby multiple quotations are submitted by individual companies who share same information. It usually includes internal employees in the municipality,” said Mr Serote.
The municipality is owed revenue for services of over R1 billion by communities and owes Eskom close to R130 million.
Mr Serote said they instituted a forensic investigation on financial misconduct in the municipality.
“We are analysing supplier data to ascertain certain links which resulted on suppliers sharing Vat numbers, bank accounts, postal and telephone addresses and comparing employee database with the vender database to check further links.
“Cases of fraud are opened with the South African Police Services which includes suspected payment of R1,5 million to an incorrect bank account and overpayments to suppliers and price escalations outside the service level agreements,” said Mr Serote.
Draft recovery plan which includes cost containments, detailed payment reviews, daily cash management and new asset register and monthly reconciliations was developed. Special adjustment budget will reflect commitment to cost containment and the organisational review was on place.
Municipal Public Accounts Committee (MPAC) Chairperson, Cllr. Lawrence Mabunda said there is lack and poor leadership in total disrespect of Municipal Infrastructure Grant expenditure and possible misrepresentation on financial information in the financial years 2012/13 and 2013/14.
“Even though implementation of Council Resolutions on MPAC recommendations remains a challenge, current intervention is a success of MPAC,” said Mr Mabunda.
The Portfolio Committee Chairperson, Hon. Raymond Elisha said the Administrator must implement the action plan and investigation should be regularly monitored.
“The administrator should also take action on employees contravening the supply chain policies and ensure that services providers involved on financial misconducts are blacklisted. The audit report needs to be tabled before the council very soon,” said Hon. Elisha.
The Committee will engage other municipality on matters of governance.
For more information contact:
Namhla Luhabe
Cell: 079 527 0628
