BRIEFING DOCUMENT ON THE INTERVENTION IN THE
eMADLANGENI MUNICIPALITY
1. PURPOSE
To provide a briefing report to the Select Committee on Local Government and
Administration on the intervention by the Executive Council of the Province of
KwaZulu-Natal undertaken in terms of Section 139 of the Constitution at the
eMadlangeni (Utrecht) municipality and the present status quo in the
municipality.
2. LEGISLATIVE PROVISIONS
Section 106 (1) (b) of the Municipal Systems Act, provides as follows;
"- (1) If an MEC has reason to believe that a municipality in the province
cannot or does not fulfil a statutory obligation binding on that municipality
or that maladministration, fraud, corruption or any other serious malpractice
has occurred or is occurring in a municipality in the province, the MEC must-
(b) if the MEC considers it necessary, designate a person or persons to
investigate the matter"
Section 139 (1) (b) of the Constitution, provides as follows;
"When a municipality cannot or does not fulfil an executive obligation in
terms of the Constitution or legislation, the relevant provincial executive may
intervene by taking the appropriate steps to ensure fulfillment of that
obligation, including-.
(b) assuming responsibility for the relevant obligation in that the
municipality to the extent necessary to
(i) maintain essential national standards or meet established minimum standards
for the rendering of a service;
(ii) prevent that Municipal Council from taking unreasonable action that is
prejudicial to the interests of another municipality or to the province as a
whole; or
(iii) maintain economic unity; or"
3. BACKGROUND
The reasons for the section 139 (Constitution) intervention have their roots in
a section 106 (Municipal Systems Act) intervention instituted by the MEC
responsible for local government.
The background to the intervention in terms of section 139 of the Constitution
is briefly the following :
3.1 During September 2006 the Provincial Department of Local Government and
Traditional Affairs received various reports of maladministration, fraud,
corruption and other serious malpractices in the Utrecht Municipality
3.2 As result of these reports Dr Z L Mkhize (who was acting as MEC at that
time) resolved to investigate the reports and complaints received by the
department, and appointed a firm of consultants to investigate the allegations.
3.3 The investigation was to ascertain the factual position around the
allegations made in respect of:
·
Irregularities in the recruitment process and in particular
in the appointment of the Manager: Corporate Services;
·
Irregularities in the allocation of sites of Grootvlei
·
Irregularities in the allocation of housing within
Goedehoop Low Cost Housing Development;
·
Irregularities relation to expenditure on Poverty
Alleviation funds and Local Economic Development Projects;
·
Possible irregularities in the appointment and payment
of Ufezele Management Solutions;
·
Irregularities in the management of Game Park, repairs
to lap top, submission of fictitious invoices in order to collect monies from
the suppliers, utilization of municipal staff during overtime to carry out
private duties;
·
Overpayments on S & T claims for Councillor ME
Khoza for 2005/2006 and 2006/2007 financial year;
·
To investigate the creation, establishment, Business
Plan, Council resolution and value for money of Groot Hoek Poultry Project;
·
To investigate the creation, establishment, Business
Plan, Council resolution and value for money of AIDS Garden Poultry Project.
·
Grant to municipality by Velgedagt Coal Mine;
·
Grant to the municipality by MEC for Local Government
and Traditional Affairs and
Any consequential matters that may surface during the investigation
3.4 I had received reports that certain Councillors attempted to frustrate the
investigation, and accordingly I applied to the High Court for an order
suspending Councillors M E Khoza and B C Mabaso as Councillors pending
finalization of the investigation. (Councillor Khoza is the Mayor of the
Municipality.) The application was granted by Mr Justice Meleko. The
Councillors have however sought leave to appeal against Judge Moleko's decision
and that application is still pending.
3.5 On 14 May 2007 the investigators reported on the outcome of their
investigation and made the following recommendations :
3.5.1 that disciplinary action should be taken against certain Councillors
(including Khoza and Mabaso) and the Municipal Manager for failing to comply
with the municipality's Recruitment, Selection and Appointment Policy;
3.5.2 that disciplinary action should be taken against the Municipal Manager
and Councillor Khoza for irregularities in the allocation of sites;
3.5.3 that disciplinary action should be taken against Messrs Zungu and Mtshali
for unauthorized allocations in the Goederhoop Low Cost Housing Development.
3.5.4 that disciplinary action should be taken against Messrs Zungu and Ndlovu
for irregularities in the expenditure of Poverty Alleviation Funds and local
economic development projects, and that the Municipal Manager and other
officials be charged with financial misconduct;
3.5.5 that the Municipal Manager and Chief Financial Officer should be held
liable for unauthorized expenditure and charged with financial misconduct
relating to the employment of consultants;
3.5.6 that a criminal case of fraud and theft should be registered against Mr R
Stannard and that charges of misconduct should be brought against a council
employee with regard to irregularities relating to the council game park;
3.5.7 that disciplinary action and criminal charges should be brought against
Councillor Khoza for wrongful claims for Sand T, and that charges of misconduct
be brought against the Municipal Manager as a result.
3.6 As can be seen from the above the report seriously implicates the Mayor
(Councillor Khoza, who also acts as Speaker) and four senior council employees,
including the Municipal Manager and CFO.
3.6.1 In accordance with normal practice I referred the report to the Utrecht
Municipal Council and requested it to report to me within 21 days on the action
that the council intended to take as a result thereof.
3.6.2 Despite the fact that the deadline of 21 days expired and more than 3
months had elapsed since the Report was provided to the municipal council, it
failed to take any action against those implicated in the report, and no
disciplinary action has been instituted against either the Councillor
concerned, or the Municipal Manager and other senior council officials.
3.6.3 The Council is under a statutory obligation arising from various pieces
of legislation to act if there is unlawful or irregular activity taking place
within the councilor the municipality. It has not complied with these
regulations.
3.7 Arising from, inter alia:
3.7.1 the municipal council's
failure to discharge its executive obligations and to invoke the required
disciplinary procedures as contemplated by the MFMA, the Systems Act and the
Code of Conduct;
3.7.2 the municipal council and municipal employees' failure to discharge their
obligations to institute disciplinary proceedings against the Councillors or
against the municipal employees named in the report (as the case may be);
3.7.3. the delay in taking action;
3.7.4 the fact that the Mayor is alleged to have committed serious infractions in the report;
3.7.5 the fact that the most senior council employees are named in the report,
and
3.7.6 the fact that it was necessary for me to intervene because of earlier
allegations of interference with the investigations,
I recommended to the Provincial Executive Council that it should resolve to
intervene in the eMadlangeni Municipality in order to ensure fulfillment of the
relevant obligations.
3.8 On 22 August 2007 the Provincial Executive Concil resolved to intervene in
the eMandlangeni Municipality, as follows :
3.8.1. The Executive Council appoints a special committee or committees to
investigate and make findings of the allegations against the Mayor Councillor
Khoza and any other Councillor arising from the Special Investigation Report
into Allegaions of Mismanagement, Maladministration, Fraud and Corruption at
Utrecht Municipality, dated 14 May 2007 ("the Special Investigation
Report") and on breaches of the Code of Conduct for Councilors arising
therefrom as contemplated in item 14(a)(b)(i) of the Code;
3.8.2. The Executive Council appoints a special committee or committees to
investigate and make findings on the allegations against municipal employees
arising from the Special Investigation Report and on breaches of the Code of
Conduct for Municipal Staff Members and all applicable legislation arising
there from, as contemplated in item 1 of the Code of Conduct for Municipal
Staff members, read with section 67(1)(h) of the Local Government: Municipal
Systems Act, 32 of 2000, and the Disciplinary Procedure Collective Agreement
(if applicable);
3.8.3. That I be authorized to appoint the relevant special committee or
committees for the proposes of conducting the investigations and making the
findings contemplated above;
3.8.4. That the Executive Council directs that the special committee or
committees appointed by me make recommendations to the Executive Council on the
appropriate sanctions to be imposed on the Councillors and municipal employees
who are found to have committed a breach of the applicable code or committed a
disciplinary offence;
3.8.5 That the Mayor Councillor M E Khoza, the Municipal Manager 01 M Kubeka)
and municipal employee B Zungu be suspended pending the outcome of the
procedures contemplated above.
3.8.6 That I be directed to appoint an Acting Municipal Manager to act on
behalf of the Municipal Manger pending the outcome of the procedures
contemplated above.
4. CURRENT STATUS
4.1 The following actions have been taken in accordance with the resolution
of the Provincial Executive Council :
·
The NCOP has been notified of the intervention in the
eMadlangeni Municipality in terms of Section 139 of the Constitution - annexure
A
·
The Minister for Provincial and Local Government has
been informed of the intervention in the eMadlangeni Municipality in terms of
Section 139 of the Constitution - Annexure B
·
Letters of suspension from office have been served on
the Mayor and Municipal Manager of the Municipality - Annexure C1-C3
·
A special committee, comprising of Advocate M Mkhize,
and Attorney E Ngubane has been appointed to investigate and make findings on
the allegations against those implicated
· An acting Municipal Manager has been appointed, provided with comprehensive terms of reference and has assumed duty - Annexure D
·
The suspension of the Speaker /Mayor results in the
council's decision making process being compromised. It is therefore necessary
for the council to elect an Acting Speaker/Mayor in terms of section 41, read
with section 36 (3) of the Municipal Structures Act.
4.2 The Minister designated the General Manager: Local Government to
conduct such election - see copy of designation attached as Annexure
"E". eMadlangeni has 7 councillors, including Councillor Khoza, who
is suspended. The election of an Acting Speaker, (Mayor) was delayed on two
occasions by 3 councillors removing themselves from the meetings. Arising from the
equality of votes, a further three meetings were required
to formally elect an Acting Speaker, by lot, in terms of item, 8 (3) of .
Schedule 3 to the Municipal Structures Act - Copy of minutes attached and
Annexure F
5. ADDITIONAL MATTERS
The Acting Municipal Manager has, in accordance with his terms of
reference, provided a comprehensive report on the practical operations of the
municipality, dated 18 October 2007. The report details:
·
Numerous cases of maladministration related to Human
Resource matters, including incorrect calculations of leave, incorrect salaries
paid, overpayment of salaries and the possibility of ghost employees, have been
identified.
·
Non-compliance with many of the provisions of the
Municipal Finance Management Act (MFMA) abound.
·
There are institutional, organisational and capacity
constraints which are impacting negatively on the municipal administration.
·
The municipality failed to submit financial statements
in terms of section 126 of the Municipal Finance Management Act. This has
subsequently been rectified.
·
The Provincial Management Assistance Programme is in
the process of compiling a recovery plan to address the administrative
shortcomings.
·
The council has seven councillors, of which one is
vacant, which means that this council presently comprises of 3 x ANC, 2 x IFP
and 1 DA councillors. Decision making is now being compromised by
"frustration" politics as the 2 minority parities regularly "walk
out" leaving the council without a quorum. This means that, on occasion,
decisions cannot be taken and service delivery is compromised. Should this
situation continue the KwaZulu-Natal Executive Council may have to consider a
section 139(1)(c) intervention as the council is dysfunctional, at times.