The Manase report unpacked

By Bheki Mbanjwa Time of article published Feb 8, 2012

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High-ranking eThekwini municipal officials and politicians, including former municipal manager Mike Sutcliffe and former mayor Obed Mlaba, have been fingered in a damning forensic investigation into financial irregularities, fraud and corruption.

The report by Manase and Associates – which remains under wraps with only a summary being released yesterday – found widespread irregularities involving mainly the flouting of tender procedures, lack of budgetary controls, abuse of overtime and councillors and employees doing business with the municipality.

Other top officials fingered in the report include Treasurer Krish Kumar and the deputy city manager responsible for infrastructure, Derek Naidoo.

The head of housing at the municipality, Cogi Pather, and his deputy are also implicated in the report. These officials are likely to face disciplinary action, with the auditors in some cases recommending that funds be recouped.

The probe was commissioned by the provincial Department of Co-operative Governance and Traditional Affairs after the Auditor-General’s report of 2010/2011 and subsequent allegations of widespread maladministration, corruption and fraud at the municipality.

Co-operative Governance MEC Nomusa Dube said yesterday the probe was in no way a witch hunt against some individuals, “but it was intended to confront head-on some of the ills bedevilling this municipality and arrest the rot before it collapses this institution”.

The report was tabled before council, which had been given 21 days to to respond, Dube said.

Her department has advised the council to institute disciplinary proceedings against all the implicated councillors and officials.

These have to be finalised within three months.

“No one should rejoice when this municipality goes through turbulent times, for this would be tantamount to rejoicing at the plight of our people,” Dube said.

Some of the findings in the Manase report

l Ten councillors had companies which conducted business with the municipality in contravention of the Code of Conduct for Councillors and the Municipal Systems Act.

l Former mayor Obed Mlaba unlawfully influenced a tender for the waste volume reduction plant at the Bisasar Road Landfill site.

l Non-compliance with the supply chain management regulations resulting in irregular expenditure of more than R2 billion in the past three financial years.

l Treasure Krish Kumar and former municipal manager Mike Sutcliffe did not take all reasonable steps to prevent irregular expenditure.

l Sutcliffe contravened the Prevention and Combating of Corrupt Activities Act by not reporting fraudulent and corrupt activities contained in the Ngubane report to the SAPS early enough only reporting the matter two years later. This prejudiced the municipality by R1.1 million. He also contravened the Municipal Finance Management Act by failing to report irregular expenditure in writing to the mayor, the MEC and the A-G.

l Deputy City manager responsible for infrastructure and the head of housing did not comply with SCM policies and failed to exercise due care.

l 161 municipal employees doing business with the municipality. The AG had identified 38 of these with the Manase further identifying the other 123.

l Irregular appointment of employees with some of the suitably qualified and experienced employees being overlooked for appointments and promotions.

l Seven contracts of senior managers reporting directly to the city manager were not renewed but continued to be employed at the municipality in contravention of Section 57 of Act 32 and any remuneration paid to these managers could be irregular.

l At least 14 metro officers are taxi owners with fines ranging from R5 000 to R117 000 while there is substance to allegations that 30 metro police officers purchased their driving licences.

l Three contractors involved in the R24 million Westrich Housing Rehabilitation Programme were issued with appointment letters even before they submitted appropriate documents.

l Irregularities in the multimillion-rand Burbreeze and Hammonds Farm housing developments.

Manase recommendations

l That a comprehensive forensic investigation be instituted into each of the irregular contracts to identify and discipline officials implicated in these.

l That the municipality recover irregular expenditure in terms of section 32 (2) of the MFMA.

l The waste volume reduction tender process be restarted.

l Disciplinary action against employees with interests in companies doing business with the municipality.

l An investigation be instituted into claims of abuse of overtime payments.

l Action be taken against deputy head of Applications and Projects in relation to an irregular appointment of a senior manager.

l The legal department to be involved in all the agreements signed on behalf of the municipality to ensure that the interests of the municipality are protected.

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