City officials on the carpet PDF Print E-mail

Thursday, February 09, 2012

Top officials named in the forensic report into fraud and corruption in the eThekwini municipality will be hauled before the municipal public accounts committee to account for their transgressions.

It is understood that the municipality will also consider taking legal action against former city officials and politicians implicated in the report.

These include former mayor Obed Mlaba, who was found to have interfered in the awarding of a R3 billion waste volume reduction tender, and former municipal manager Michael Sutcliffe, who was criticised for not reporting fraud and corruption in contravention of the law, and for not taking reasonable steps to curtail irregular expenditure.

The report, by auditing firm Manase and Associates, was released on Tuesday and came as a result of a lengthy probe into allegations of fraud, corruption and maladministration in eThekwini, instituted by Co-operative Governance MEC Nomusa Dube.

It also followed an investigation by auditors Ngubane and Co, who made similar findings, in 2010.

But Sutcliffe has questioned Dube’s motives in launching the investigation, saying “her actions smack of political opportunism at its worst”.

He said he had discussed the report with Dube on Monday and had had valid explanations for his actions, including his failure to timeously report fraud and corruption that had been brought to his attention by Ngubane and Co.

“In this regard, my head: legal had given me very clear advise (sic) which I also discussed with the head of Hawks to finalise a protocol for such reporting, after which we have properly responded,” he said.

Sutcliffe said he told Dube the investigation was “clearly targeting certain individuals and warned her against opening up a Pandora’s box”.

“I specifically raised concerns that she had never brought to our attention the fact that her own sister was both an employee of ours and was doing business with the municipality, something which we had stopped after our own investigations.”

Sutcliffe, who is abroad, added that the attempt to besmirch the characters of senior municipal officials, without giving them the platform to respond to the issues, should be condemned.

Mayor James Nxumalo said the council’s executive committee would peruse the Manase report and decide on what action to take.

Nxumalo urged council employees not to panic, saying the city was “not facing a crisis”.

“It is important to note that the report has not found anyone guilty. This was a wake-up call for the council to arrest toxic practices that seemed to characterise the behaviour of our officials and councillors, disregarding applicable supply chain management processes,” he said.

The probe also zoomed in on the R532 million in irregular expenditure highlighted by Auditor-General Terence Nombembe for the municipal year ending June 2010, of which R428m related to the housing unit, headed by Cogi Pather.

The municipality was advised to take disciplinary action against Pather and other officials in his department. The city was also told to recover the irregular expenditure.

Municipal manager Sibusiso Sithole said the issues raised by Nombembe were being dealt with by the municipal public accounts committee, and officials would be called to account.


Dube’s spokesman, Lennox Mabaso, said that the MEC’s sister, who was a municipal employee, had been among 38 municipal employees who were found by the auditor-general to have been doing business with the municipality.

“The (Manase) investigation then uncovered 123 more council employees who were found to be doing business with the municipality… The MEC (Dube) will not be drawn into any sideshow,” he said.

The Manase report also recommended that disciplinary action be taken against city treasurer Krish Kumar for failure to take all reasonable steps to prevent unauthorised, irregular and wasteful expenditure.

But Kumar said he was not implicated in irregular expenditure, as he was not directly involved in expenditure incurred at unit level; full budget control and accountability rested with the respective unit heads.

He said irregular expenditure was only raised as an issue in the auditor-general’s 2009/10 report.

“This related in the main to the housing unit and was due to variation orders and extension of contracts.

“The head: housing (Pather) relied on a 2004 circular for authority in this regard.”

He added that various measures to control irregular expenditure were put in place after the 2009/10 audit report.

“Accordingly, I strongly believe that all reasonable steps have been undertaken by us since irregular expenditure was raised as an issue. Our excellent financial management and control is well recognised and we are fully committed to clean governance.”

The report also recommended that disciplinary action be taken against Jacquie Subban, head of the geographic information and policy unit, for irregularly awarding two contracts and for negligence which resulted in a service provider being paid R2.6m twice.

The transaction was subsequently reversed.

Subban said she had not seen the report but had been asked for information during the investigation and had co-operated. She would comment further after seeing the report.

Numerous attempts to reach Pather for comment were unsuccessful.




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