Durban 151211 Sutcliffe Farewell, Mike Sutcliffe Pic Terry Haywood
Durban 151211 Sutcliffe Farewell, Mike Sutcliffe Pic Terry Haywood

R6m bonuses for municipal bigwigs

By Gugu Mbonambi Time of article published Oct 4, 2012

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KwaZulu-Natal - Senior managers in KwaZulu-Natal’s struggling municipalities have paid themselves big performance bonuses even though their towns are in financial distress – some with no rates base and borrowing heavily to stay afloat.

The KZN Department of Co-operative Governance and Traditional Affairs released figures this week that showed ratepayers had coughed up more than R5.8 million for performance bonuses in some of the poorest and worst-managed towns in the 2010/11 financial year.

 The information became public when the DA’s local government spokesman, George Mari, put questions to the department in the provincial legislature.

Department spokesman Lennox Mabaso said MEC Nomusa Dube was not opposed to the awarding of performance bonuses, but she was exploring ways to ensure that there was “stronger oversight” when it came to such payments to bosses who had underperformed.

“People ought to have performed and gone beyond the call of duty. Performance bonuses should not be paid as a ritual because you can’t spend exorbitant amounts on bonuses when the municipality is in shambles,” he said.

Of the province’s 61 municipalities, only five were given clean audits in the last financial year. Altogether it is estimated that there was about R2 billion in irregular expenditure, the department said.

The eThekwini municipality, which had a bank overdraft of R542m in the past financial year and was under investigation for fraud, corruption and maladministration, paid its then-city boss Michael Sutcliffe, a performance bonus of R130 877 and chief financial officer Krish Kumar R80 386.

The total amount doled out to senior management in eThekwini was R1.1m.

Dube was quoted last month as saying municipalities that relied heavily on bank overdrafts could be in this situation because they had weak financial management and poor debt collection.

She said that 28 municipalities in the province, most of them in rural areas, were in dire straits. Of these at least eight were run in a way that was unsustainable. However, R932 082 was paid in performance bonuses to their municipal managers and chief financial officers.

These included Amajuba District, Dannhauser, Zululand District, Vulamehlo, Umzumbe, Umgungundlovu, uMzimkhulu and Jozini.

The Zululand District Municipality’s economic viability is already in the spotlight while there is talk that Hlabisa, in Zululand, will be dismantled, with some wards being ceded to Mtubatuba and Big 5 False Bay (Hluhluwe). Zululand District received a R30.3m bank overdraft in the financial year ending June 30 last year.

Nevertheless it paid its municipal manager, Johan de Klerk, a performance bonus of R123 050, while its chief financial officer, Sipho Nkosi, received R84 280.

Amajuba’s then-acting municipal manager, Vincent Mbatha, was allocated a performance bonus of R141 803 and the municipality’s then-chief financial officer, Khulekani Thusi, R108 978. However, Amajuba district spokesman Thabo Xaba said the bonuses were not paid. If they had been, this would have been done from a R13m bank overdraft – the third-highest in the province.

“The municipality’s consolidated annual financial statement for the year ending June 2011 reflects that provisions were made to pay Mbatha, Thusi and other senior managers performance bonuses, but the payments were not made,” said Xaba.

He refused to give reasons why they had not been paid.

Zululand Speaker Mpiyakhe Hlatshwayo said proper processes had been followed when bonuses were paid and they were in line with the key performance indicators.

The officials had met targets and were paid a bonus when their performance was above expectations. Hlatshwayo denied that the municipality had taken a bank overdraft.

 “Of the 61 municipalities, five achieved clean audits, yet the managers from poor performing municipalities paid themselves bonuses, some more than R100 000… Many of the municipalities have no rates base and are using government grants,” Mari said.

Msunduzi spokesman Brian Zuma said the municipality was under administration, so no performance bonuses had been paid to its senior management. - The Mercury

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