MPUMALANGA PROVINCIAL GOVERNMENT
OFFICE OF THE MEC
Department of Local Government and Housing
TO: The Chairperson of the Select Committee on Local Government and
Administration (NCOP)
Mr. S. Shiceka
FROM: THE MEMBER OF THE EXECUTIVE COUNCIL
Cde. J.L. MAHLANGU
DATE: 08 November 2005
SUBJECT: PROGRESS REPORT ON THABA CHWEU MUNICIPALITY.
- PURPOSE
To inform the National Council of Provinces about the progress made since the intervention of the department through the deployment of the administrator in Thaba Chweu.
- BACKGROUND
The Mpumalanga Provincial Council took a decision in November 2004 to place Thaba Chweu under the supervision of an administrator through section 139.1 (b) of the constitution.
The administrator was mandated to look into financial and administration matters which were allegedly to have been violated by both councilors and officials.
- PROGRESS ON THE INTERVENTION
3.1. Appointment of Senior Managers:
- All Senior Managers, which include Corporate Services, Technical & Engineering and Community & Protection Services, were appointed with effect from the 10th May 2005.
- The Financial Manager commenced on the 01st September 2005.
All senior posts are filled.
PROGRESS REPORT ON THABA CHWEU MUNICIPALITY./CONT…
3.2. Municipal Manager:
- The Municipal Manager’s performance was re-evaluated and a decision was taken that he should be suspended and charged for non-performance and contravention of municipal systems.
- The Municipal Manager was suspended on the 14th September 2005. He resigned on the 16th September 2005.
- An Acting Municipal Manager has since been appointed.
3.2. Financial Statements:
- The municipality has since been able to update and submit financial statements of the past four financial years, from 2001/2002, 2002/2003, 2003/2004 and 2004/2005 to the Auditor General by the end of May 2005.
3.3. Financial System:
- Sebata was appointed in September 2005 to implement the Finstel Financial System at Thaba Chweu.
- The process of incorporating the old systems has begun.
Thaba Chweu is in the process of implementing the Finstel System.
3.5. Banking Accounts:
- The municipality has since consolidated all its 13 (thirteen) Bank Accounts into 1(one) as per the requirement of the MFMA.
- The Primary account is with ABSA Lydenburg.
3.6. Revenue Collection:
- A service provider was appointed in September 2005 to assist Thaba Chweu to implement a Revenue Collection Management and Collection System.
It was previously reported that Thaba Chweu losses an estimate of R1 million of revenue per month.
Gradually confidence is being build between the consumers and Thaba Chweu. Meter reading is being improved and read on a monthly basis e.g. September approximately R1 Million was collected, when cut-offs was done. Government Departments are also encouraged to pay, in September R800 000, 00 was collected.
Based on the report and the findings of no internal controls in the Finance Department, the MEC for Local Government and Housing appointed a Forensic Investigation. The investigation is currently in progress. Three Officials have already been suspended on the 25th October 2005. (See annexure A on the preliminary findings)
- Disciplinary measures:
PROGRESS REPORT ON THABA CHWEU MUNICIPALITY./CONT…
- The Acting CFO has since resigned after receiving his charge sheet.
Disciplinary measures in the traffic department are in progress and the matter has also been referred to the Special Investigating Unit for further investigations.
- Conduct of Councilors and Hearings:
- The administrator has since been able to collect R126 063, 00 of out of the R397 268 owed by councilors for cell phones and advances. Cell phones measures are now in place with a maximum expenditure of R 751, 11.
- Arrangements have been made with councilors that the outstanding money will be deducted from their pensions should they not return in the next local government elections.
Councilors Hearings
- Councilors have been implicated in numerous violation of the code of conduct which among other include the abuse of council property and staff, abuse of vehicles and the interference in the administration:
Details of such violations are as follows:
- Council vehicle was stolen in the possession of a councilor
- Councilor was involved in sex chat line on the council internet
- Leaking of information by councilors to members of the community with a view of influencing council decision
- Allegations in housing contracts
- Abuse of cell phones allowances and advances
- Threatening municipal employees during electricity cut offs
- On the 26th October 2005 at a Special Council Briefing, Councillors were served with notices, informing them of allegations against them.
A Special Independent Committee was appointed to conduct investigations in the alleged issues, which amongst others include the following:
- Mandla Mabelane: Sex chat line, stolen vehicle, housing tender and interference in management matters, instruction to pay Acting Allowances to management.
- Councilor Manzini, Masilela and Khumalo: Abuse of council vehicles
- N Mashego: Threatening council employees during cut offs and interference in management matters and tempering with prepaid system.
- F. Rousseau: interference in management matters and ill (aggressive) behavioural problems during council meetings.
- G Herbst: Interference with management matters.
- K.G. Mashego: to give clarity on being a full time Council Official and a Ward Councillor.
- All members of the Executive Committee – for decisions taken and tempering with those decisions afterwards.
PROGRESS REPORT ON THABA CHWEU MUNICIPALITY./CONT…
Thirteen (13) Councillors will go through this process and the committee will then make recommendations.
- Service delivery
- Two major hindrances to Local Economic Development have been identified which are the Bulk water provision and electricity generation on large scale. An amount of R4 million has been made available for short-term assistance for the supply of electricity in total R18 million is needed to address the electricity challenges. An amount of R71 million is needed to address the water challenges of the municipality and R31 million is required for short-term interventions. The Ehlanzeni District municipality has already made available R5.9 million for water improvement and supply. R 2 million has been allocated to Matibidi for bulk water supply.
- R250 000, 00 was made available by the Ehlanzeni District Municipality to assist Thaba Chweu with a Land Audit, which has already been completed. "Annexure" Findings of the land audit.
- Presently there is land developed by the municipality to cater for the housing needs of the mines. A loan of R15 million was approved by DBSA for the project and it is envisaged that the Municipality will raise R25 million through the sale of the stands.
- The municipality was also faced with a problem of land invasion. A land invasion committee was established as a result land invaders have been successfully moved to Ext 21. The municipality is presently developing a land invasion policy.
- The Forest Companies have donated land to the council and presently the administrator is looking at a housing development and resettlement of squatters.
- Recommendations
- The Administrator be kept until the end of the financial year to deal with the findings of the financial audit which might implicate a number of officials.
________________ ________
Mr. J.L Mahlangu DATE
MEC: DEPARTMENT OF LOCAL GOVERNMENT AND HOUSING
Allegationofcorruption (wt)
Annexure- 1.
Preliminary Findings on the Forensic Investigation
1. Introduction
As the intervention in Thaba Chweu continued, it was then discovered that he was a further need to instituted an investigation in the finance department after the administrator and her team had suspected that the could be fraudulent activities in the collection of revenue.
2. Allegations
2.1. Prepaid electricity income received is being stolen by deleting the sale of prepaid meter tokens and attacking meter tokens.
2.2. The daily prepaid cash collected does not correspond with the audit rolls.
- The total prepaid cash collected for the day per cashier is cancelled on the Finstel System and replaced with lesser amounts, resulting in some of the money collected being accounted for.
- The staff from the income section had allocated free prepaid tokens to themselves.
3. Findings
- Tokens Deleted
- The total tokens deleted for March amount to R8 574.50. Investigations are still continuing to ascertain if there has been any fraudulent activities that might have taken place.
- Cash does not correspond with Audit Roll
- Shortages on daily prepaid takings amount to R11 579.00 (per day) for the month of March 2005.
- Cancellation of cash collected on the Finstel System
- The amounts of the total cash collected have been deleted on the Finstel system and replaced with smaller amounts which are not corresponding with the audit rolls and the printout receipts. The investigations are continuing.
- Staff Allocating Free Tokens for themselves
- It has been discovered that an official from the income section has allocated 20 243.3 free prepaid units to himself.
- Action taken
- The Head Cashier, Mr. Khumalo and Mr. Mashego were suspended on the 25th of October 2005. Due to the excessive cash shortages recorded from the prepaid sales.
- Mr. Weideman was also suspended on the 25th of October for allegedly stealing prepaid electricity.
- The investigation is still in progress.
Office no. 55
Building no. 16
Riverside Boulevard
Mpumalanga Government Complex
Republic of South Africa
Private Bag X11314
Nelspruit
1211
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(113) 766 6187
(113) 766 6321
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(113) 766 8438
E-mail: [email protected]