To: Mr . Mahlangu
Offices of the chaiperson
National Council of provinces
P.O Box 15
Cape Town
8001

From : Local Government and Housing

Notice of Provincial Executive intervention in Thaba Chwue municipality in terms of section 139(1)(b) of the constitution of the Republic of South Africa 1996(Act No. 108 of 1996)

Kindly take notice that the Executive Council of the Mpumalanga Province resolved at its meeting of the 1 December 2004 to invoke section 139(1)(b) of the Constitution of the republic of South Africa, 1996 (Act No. 108 of 1996), and intervene at the Thaba Chweu Local Municipality. The Executive Council further mandated me to proceed to deal with the matter on its behalf

Section 193(1) of the Constitution provides that a provincial executive may intervene in a Municipality that cannot or does not fulfil is executive obligation, by taking any appropriate steps necessary to ensure fulfillment of the obligation, by taking any appropriate steps necessary to ensue fulfillment of the obligation. Subsection (1)(b) further stipulates that the provincial executive may assume responsibility for the relevant obligation to the extent necessary to meet established minimum standards for the rendering of essential services in that Municipality

The Mpumalanga Department of Local Government and Housing conducted a preliminary Investigation i to the affairs of the Municipalty concerned and it was discovered that:

(a) The Municipality has failed to comply with budgetary requirements as prescribed by the Municipality Finance Management Act, 2003 (Act No. 56 of 2003), resulting in the National Treasury withholding the Municipality's equitable share;

(b) The Municipality has failed to designate a primary banking accounting as stipulated by the Municipal Finance Management ct;

(c) The Municipality has failed to fill critical posts, in particular the posts of the Chief Financial Officer and Director, Public works, almost four years after the Municipal Council was elected;

(d) The annual financial statement of the Municipal were last prepared and submitted in 2001;

(e) There is lack of credit control policy or alternatively, if it does exit, failure to vigorously and consistently apply it;

(f) There is an alarming rate of increase of the bank overdraft

(g) The Municipal Council has failed to finalise long outstanding disciplinary hearings; and

(h) The Municipal has failed to integrate the financial management systems of the different units that form part thereof

In view of the above, the Executive Council has decided to invoke section 139(10(b) and have appointed an Administrator by the name of Mr. T Taabe who will with effect from 31 January 2005 assume on behalf of the provincial executive and in consultation therewith, the responsibility for the obligations that the Municipality has failed to undertake. The administration will be assisted by Mr. P C Mnisi and Ms G van Castle. The administrator has been instructed to prepare and submit a recovery plan for my approval and once it has been received and approved the terms of reference of the administrator may require amendments.

We enclose herewith a copy of the letter of appointment of the Administrator with the terms of reference of the apointment.