Reports by Auditor-General Kimi Makwetu, the provincial Department of Co-operative Governance and Traditional Affairs (Cogta) and the municipal public accounts committee implicated several senior officials, including former municipal manager Xolani Luthuli.
The reports followed investigations into several projects deemed problematic by the council. They included loss of funds at the motor licensing department, irregular awarding of capital projects, a rehabilitation project in Scottburgh’s CBD and a contract involving the Humberdale landfill site.
The AG report found some multi- million rand contracts were inflated and money unaccounted for. It recommended disciplinary action be instituted against several senior officials including Luthuli, but sources in the council said no action was taken.
Hawks spokesperson Captain Simphiwe Mhlongo confirmed members of the Serious Corruption Investigation Unit were investigating a case of fraud but no arrests were made.
Municipal insiders said Luthuli was placed on “special leave” from April 2018 until his contract expired in August last year.
The ANC later appointed him as its lower south coast region coordinator.
The Zondo commission of inquiry into state capture has requested it to submit its audited financial reports, including an external auditor’s report and other documents generated between July 2008 and June last year.
Highly placed municipal officials confirmed there were allegations of political interference. This resulted in the recalling of former municipal speaker Siyabonga Khwela.
“There were plans to remove the city manager because many councillors were against the conduct and use of public money within the council.
“Khwela was removed because he was resistant. We reported the issues to the provincial leadership but no actions were taken.
“It was clear there was undue influence from the ANC,” said a source who asked not to be named.
Council spokesperson Siphelele Cele said it was aware of the allegations but disciplinary processes were stalled due to lack of action by other departments.