2 The Executive Council's decision to intervene in the affairs of the Municipality was not lightly taken. It was taken against a background of-

2.1 The failure by the municipal council to fulfill its executive obligations;

2.2 The state of disarray at the municipal council;

2.3 The earlier and more gradual interventions by the Provincial Executive (through the Department and me).

3 As appears from the brief background which is set out below, the Provincial Executive has not acted in haste, nor has it easily taken the drastic step of intervening in terms of section 139(1)(c) of the Constitution.

4 It has taken the current action only after less drastic measures have failed to restore order to the municipal council.

BRIEF BACKGROUND

5 The Department of Local Government and traditional Affairs has for some time been aware of the state of disarray at the municipal council.

6 Matters first come to my attention, when, as acting MEC, I received reports of allegations that the Mayor had used a council vehicle without authority, and of an alleged failure by Councillors to attend 3 or more consecutive council/committee meetings.

7 Despite the fact that the Mayor had damaged the vehicle beyond repair when using it without authority, and the fact that she already had 2 warnings for having breached the Code, her misconduct was glossed over.

8 Similarly the Council resolved to condone the absence of the Councillors who had failed to attend 3 or more consecutive meetings despite item 4(2) of the Code of Conduct for Councillors, which provided that a Councillor who has been absent for 3 or more consecutive meetings must be removed from office.

9 There were numerous irregularities in the meetings which had dealt with the above matters. Accordingly on 29 October 2004 I wrote to the Municipal Manager instructing him to institute an investigation into the allegations concerning the Mayor and the council vehicle under item 14 of the Code, and to reconsider the issue of the absent Councillors in terms of items 3, 4 and 14 of the Code. [Document 1 - Letter to the Municipal Manager dated 29 October 2004.]

10 Despite this the position at the municipal council worsened -

10.1 The municipality failed to fulfill its executive obligations in that it failed to comply with the statutory budgeted processes, and the prescribed time limits for the budgetary processes:-

10.1.1 The budget was not tabled 90 days before the start of the financial year (in breach of section 16(2) of the MFMA);

10.1.2 The Mayor had failed to report the non compliance to the MEC for Finance as required by section 27(2) of the MFMA;

10.1.3 The Mayor failed to table a time schedule outlining key deadlines for the preparation, tabling and approval of the 2005/2006 budget as required by section 21(1) of the MFMA;

10.1.4 Although the budget had been submitted to the District Municipality for noting, the municipal council failed to consult with the Provincial Treasury as required by section 21(2) of the MFMA;

10.1.5 The budget was not submitted to the National and Provincial Treasuries as prescribed by section 22(b) of the MFMA;

10.1.6 There was insufficient consultation and public participation in the budgetary process as prescribed by the MFMA.

10.2 In-fighting in the majority Inkatha Freedom Party had led to chaos and instability in the municipal council.

10.3 The municipality had had 3 Mayors during the period April and May 2005 (Councillor Moolman held office until 13 April, Councillor Sibiya held office until 12 May and Councillor Nxele held office from 18 May 2005).

10.4 As a result of the in-fighting certain Councillors had failed to attend 3 consecutive meetings of council, or if they had attended such meetings, they simply signed the register and left thereafter.

10.5 The municipal council is destabilized by the in-fighting to the extent that Council officials do not perform their functions properly, or under adequate supervision. The Department had started a MAP process in the municipality to assist it with the performance of functions and to build capacity. The Department has struggled to make progress with this due to effect that the non-performance of the municipal council has had on the morale of staff.

10.6 Despite independent attorneys being appointed to investigate the abuse of the motor vehicle, its findings were ignored.

10.7 The office of the Speaker was vacant and meetings were not taking place.

10.8 Additional concerns are detailed in the correspondence and minutes submitted by the Municipal Manager. [Document 2 - Correspondence and minutes of the council meeting held on 1 February 2005 and 13 April 2005.]

11 The matter was reported to the Executive Council. [Document 3 - Cabinet memorandum dated 11 May 2005.]

12 On 18 May 2005 the Executive Council resolved to intervene on a limited basis by -

12.1 Appointing an administrator (a Senior General Manager from the Department) to assist the municipality with their budgetary' process to ensure and approve budget before the end of June 2005;

12.2 Appointing persons to convene and hold enquiries into alleged breaches of the Code of Conduct for Councillors and to conduct investigations into maladministration at the municipality.

13 The first intervention led to council adopting its budget before the end of the year, and was regarded as successful.

14 The second intervention lead to a lengthy enquiry comprising of fourteen public hearings during June, July and August 2005. The hearings were chaired by attorney M E Ngubane and Advocate R E Griffiths.

15 Griffiths and Ngubane finalized the hearings and reported to the Executive Council.

15.1 They found that fifteen Councillors had failed to attend 3 meetings of council. In so doing they were in breach of item 3 of the Code of Conduct for Councillors (which provides that Councillors must attend all meetings unless they have been granted leave of absence or must vvithdraw from the meeting).

15.2 Item 4.2 of the Code provides that a Councillor who is absent from 3 or more consecutive meetings of council must be removed from office as a Councillor.

15.3 As a result the investigation found that the fourteen Councillors in question had ceased to be Councillors and must be removed from office.

15.4 The investigators also found that the former Mayor had contravened the Code, had not been authorized to use the vehicle, and had deliberately misled council on the issue. Despite the finding, the Council had erred by not giving her a hearing on the punishment which should be imposed on her. The investigators directed that she must be given a hearing only on the issue of the punishment to be imposed. (It should be noted that the Councillor in question is one of the fourteen Councillors who must be removed as a result of the first finding.)

16 The municipal council however did not appear to consider the prior warnings or learn from the investigation, and the affairs of the municipality are still in disarray.

16.1 Fourteen Ward Councillors must be replaced by way of by-elections. These elections cannot take place as it has not been possible to convene by-elections of 5 September 2005;

16.2 There has been a considerable loss of confidence. The public have lost confidence as a result of the provincial intervention and the continued disarray in the council. I have received calls from the local community, business leaders and across the political divide for complete provincial intervention.

16.3 There has been a waste of public money in that the Department has been forced to incur expenditure to compel the council to perform its functions.

16.4 The Auditor-General issued a qualified audit report for the municipality. Among the issues raised by him were:-

16.4.1 Payment vouchers and supporting documentation for expense incurred in the amount of R289, 600.00 could not be product

16.4.2 The municipality did not mate adequate supporting documentation relating to grants and subsidies, and grants and subsidies received and respect thereof could not be verified.

16.4.3 There was no reconciliation of grants received, no monitoring of spending, and no monitoring of compliance

16.4.1 Payment vouchers and supporting documentation for expenses incurred in the amount of R289,600.00 could not be produced;

16.4.2 The municipality did not maintain adequate supporting documentation relating to grants and subsidies, and therefore grants and subsidies received and expenditure incurred in respect thereof could not be verified;

16.4.3 There was no reconciliation of grants received, no monitoring of spending, and no monitoring of compliance with the conditions of funding;

16.4.4 R3,6 million of grants and subsidies is unaccounted for;

16.4.5 Losses have arisen from the distribution of water and electricity in the amounts of R6,5 million and R8,4 million, respectively;

16.4.6 The fixed assets register does not agree with the total assets set out in the financial statements, (the difference is an amount of R9,5 million);

16.4.7 The Auditor-General highlighted a lack of financial control;

16.4.8 The credit control and debtors collection policy has not been strictly adhered to;

16.4.9 The municipality does not have an Audit Committee as required by legislation. These and other matters caused the Auditor-General to issue a qualified audit opinion

16.5 The Department has been obliged to obtain a High Court order to suspend the holding of by-elections in the middle of a dispute between the IFP and Councillors ousted by it. (Had the Department not done so the Department and the IEC would have incurred the expense of a by-election, which may have been wasted due to the litigation between the IFP and its members who were challenging their dismissal, and who had done so successfully in the past.)

16.6 In certain cases there was a duplication in the payment of Councillors who were dismissed by the IFP and then successfully challenged their dismissal.

17 The municipality continues to behave illegally. The Municipal Manager has raised allegations of irregular expenditure. The irregular expenditure has arisen from the irregular intervention by a Councillor in the administration of the municipality. As this has caused unauthorized expenditure, the expenditure must be recovered in terms of the MFMA.

18 Despite this, the council resolved to write off the expenditure and failed to commence disciplinary proceedings into the alleged breach of the Code. Furthermore the meeting was irregular in that the Councillor in question was present when the matter was debated, in breach of item 5 of the Code.

19 The council has taken an urgent decision to purchase 176 tracksuits. Not only is this in breach of the council's procurement policy, but it appears to be wasteful expenditure.

20 The Municipal Manager's life has been threatened.

21 The Executive Council was extremely concerned and resolved to intervene. Its resolution must be seen against –

21.1 The background of the continued disarray at the municipal council;

21.2 The background of the failure of the municipality to perform its executive obligations; and,

21.3 The background of the municipal council's failure to correct the situation since the initial intervention by me over a year ago.

22 I have consistently kept the National Minister and the NCOP informed of developments.

M MABUYAKHULU

MEC : LOCAL GOVERNMENT HOUSING,
AND TRADITIONAL AFFAIRS

DATED:_____________