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Public protector mistaken about R58m tourism deal, says Knysna Municipality

Public Protector Busisiwe Mkhwebane

Public Protector Busisiwe Mkhwebane

Published Oct 25, 2021

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CAPE TOWN - The Knysna Municipality believes that Public Protector Busisiwe Mkhwebane erred in finding that its R58 million spent on the town’s tourism promotion agency, Knysna Tourism (KT), was irregular and constituted maladministration.

Mkhwebane announced her damning findings against the municipality on Friday, saying the speaker of council should refer the irregular expenditure to the relevant council committee for investigation and to ensure that a criminal complaint was lodged within 30 days of the date of the report.

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The municipality had entered into agreements with KT from 2002 to 2017 to market the greater Knysna area as a premier destination to achieve tourism growth.

It later emerged that KT allegedly did not follow a tender process, prompting resident Susan Campbell to lodge a complaint with Mkhwebane’s office.

Campbell said the irregular funding and other issues surrounding KT were originally raised by blogger Mike Hampton, soon after the DA came into power in Knysna in 2011.

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In response to his criticism, the municipality allegedly blocked his email, and they eventually obtained a court order to prohibit him from publishing anything on social media, claimed Campbell.

“I submitted a complaint to the public protector in July 2017, when it became clear that the then (DA) mayor, Eleanore Bouw-Spies, was determined to enter into an agreement with Knysna Tourism in defiance of a legal opinion obtained by the municipality.

“The municipality was advised that they had to follow a competitive bidding process. I wrote to the public protector and the new municipal manager, hoping to prevent the irregular expenditure,” she said.

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In her report, Mkhwebane found that the procurement of tourism services by the municipality from KT was not in accordance with the relevant laws.

Additionally, she found that the procurement did not follow a “fair, equitable, transparent, competitive and cost-effective tender process”.

More than R58 million was paid by the municipality to KT for services rendered, said Mkhwebane.

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“The conduct of the municipality was thus improper, constituted maladministration and resulted in irregular expenditure as contemplated by section 1 of the Municipal Finance Management Act (MFMA),” Mkhwebane said.

She said the municipal committee responsible for consideration of grant-in-aid application must investigate and determine whether the irregular expenditure was recoverable or not, and if so take action accordingly within 30 days from the date of this report.

“The speaker must also take appropriate steps to ensure that criminal charges are laid in terms of section 173 of the MFMA in respect of the irregular expenditure incurred within 30 days from the date of this report.

“In addition, the acting municipal manager must, in terms of section 32(4) of the MFMA, report the irregular expenditure by the municipality to the executive mayor, the Western Cape provincial treasury, the Western Cape MEC for local government and the auditor-general of South Africa within 30 days from the date of this report. This must be done in writing.

“The acting municipal manager must also, in terms of section 171(4) of the MFMA, take appropriate steps to investigate whether any of the municipal officials that were involved in the irregular procurement of the services of Knysna Tourism should be held accountable for financial misconduct, and if so take the appropriate steps to ensure that disciplinary action is instituted against them.

“This must take place within 30 days from the date of this report. Last, the acting municipal manager must submit a report to the Municipal Council on the action taken on all the above steps within 60 days from the date of this report.”

But the municipality said they made submissions based on law and facts to Mkhwebane which they believe the report erred on. However, no further communication was received.

“We have studied the report and recommendations and were afforded an opportunity to respond thereto. We have made submissions based on law and facts which we believe the report erred on. No further communication was received from the Office of the Public Protector,” said acting municipal manager Dawid Adonis.

When this was put to Mkhwebane, she said: “Officials at the municipality, including the municipal manager and the chief financial officer, were served with notices in terms of section 7(9) of the Public Protector Act.

“The section provides that, if it appears to the public protector during an investigation that any person is implicated, the public protector must afford such a person an opportunity to respond in connection with the implication concerned. They responded. Their responses were taken into consideration.”

DA constituency head for Knysna Dion George said Mkhwebane’s report was “factually incorrect” and clearly timed with the “so-called public protector’s political agenda” in mind.

“After four years, we have a half-baked report with no quantifiable damages. They can’t identify the director of corporate services or the amount of ’irregular spending’.

“This matter has, actually, already served before the municipal public accounts committee and it concerns Knysna from 2000 when the DA was not governing. The DA governed from 2011 to 2016,” he said.

Plaaslike Besorgde Inwoners (PBI) leader in Knysna, Alberto Marbi, said they were shocked by the findings.

“It opens up a whole can of worms of how Knysna Municipality was governed under the DA control. This is evidence that the DA cannot be trusted in power in Knysna again. They are masters at covering up all this corruption, maladministration and irregular expenditure. The new incoming Council should take urgent steps to recover these monies to alleviate the plight of the poor,” Marbi said.

The ANC in the region was not available for comment yesterday.

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