Star senior journalist Baldwin Ndaba reveals graft, tender-rigging and mismanagement of ratepayers’ money running into hundreds of millions of rand in the Dr Ruth Segomotsi Mompati District Municipality in Vryburg. This is the second instalment in a three-part series.
North West - The Dr Ruth Segomotsi Mompati District Municipality has spent more than R100 million on consultants but failed to get value for money.
One of them was the former chief financial officer of the municipality, David Thornhill.
Thornhill was paid R39 000 for assisting the current chief financial officer Segomotso Phatudi to compile the annual financial statement a few days before the auditor-general’s office arrived in August last year to conduct the audit.
At the time, Thornhill was employed as a chief financial officer at Naledi Local Municipality in Vryburg. Thornhill is a former chief financial officer of the district.
During his service there, he developed a roster system which saw certain companies like Tsoga Developers of the late billionaire Wandile Bozwana, 100 percent white- owned Izwelethu Cemforce and Pelotona getting massive tenders worth millions of rands.
Thornhill and the municipality used his roster system to select certain service providers in their database for major contracts. They did not have to go through a tender system.
It was also during this time in 2007 that politically connected Khotso Khasu was awarded tenders.
Khasu, according to a forensic report seen by The Star, had through his company Khasu Engineering appointed two contractors to develop sewer infrastructure in Christiana township. The forensic report found that Khasu Engineering had failed to provide them with plans. Both projects failed and the municipality suffered losses of more than R12m.
The report also found that Khasu Engineering did not have a single qualified engineer in its company. It was 100 percent owned by Khasu. Khasu is now suing the municipality for R2m which was not paid to him while he was consulting for them. The municipality was advised to sue Khasu for R8m for the sloppy work done by contractors in Christiana.
The forensic report was compiled by SizweNtsalubaGobodo.
Last year, the same auditing firm was contracted by the district to assist in the compilation of the financial statements. It was paid R1.2m.
This was part of the findings of the auditor-general into the affairs of the municipality saying it appointed without itself conducting a proper needs assessment.
The auditor-general found the terms of references used in the appointment of consultants were inadequate as they did not clearly define the transfer of skills should occur on how the contracts would be monitored.
“Consultants were appointed even though the skills necessary to perform the project, duty or study were available within the municipality.”
* Requirements for transfer of skills were not included in the terms of reference.
* Conditions or clauses for transfer of skills were not included in the contract.
* Measures to monitor transfer of skills according to the contract were not included.
* There is no evidence that skills transfer or training programmes took place.
* Employees to be trained were not identified or were not available to attend.
* Measures to monitor contract performance and delivery were not defined and implemented.
* No evaluation was performed to compare services rendered and the deliverable to the initial project objectives.
* Uncorrected material misstatements or audit findings were identified by the auditors on the work performed by the consultant.
The auditor-general urged the municipality to exercise overall financial and performance reporting on the work.
Municipal officials including the municipal manager Zebo Tshetlho paid themselves bonuses while the finances of the municipality were ailing and failed to motivate them.
The auditor-general also said fraud was likely to happen as the institution did not have systems in place to prevent it.
“The risk assessment performed by the municipality does not include the consideration of factors and risks associated with major suppliers and contractors, government entities and employee access to vulnerable assets.
“Monitoring functions are not performed relating to the evaluation of the internal control, regular reviews of policies and procedures and follow-up, review and implementation of action plans by management to ensure that the internal controls are working effectively,” the auditor-general found.
Tshetlho said the municipality had secured the services of Thornhill through Section 88 of the Municipal Structures Act (117 of 1998) which deals with co-operation between district and local municipalities.
He said he entered into the agreement with Naledi Local Municipality who asked the district to pay Thornhill.
Commenting on the bonuses, he said they were paid to affected senior managers in terms of the signed performance agreement with the municipality for 2009/10.
“The payment of these performances bonuses is therefore not in any way irregular as it was approved and subsequently ratified by council,” Tshetlho said.
He confirmed they were still using the roster system saying it was in compliance with the Municipal Finance Management Act (56 of 2003).
The auditor-general, however, disagreed.
The Star