A former Msunduzi Local Municipality employee in KZN is being investigated by the police for allegedly defrauding the municipality of over R300 000.

The man, who resigned on November 2 last year, is alleged to have stolen money from the funds of dead and retired municipal employees.

A forensic investigation report tabled at the municipal public accounts committee recently revealed that between May and June 2022, the employee changed data related to dead or retired employees, including the banking details, and fraudulently transferred funds from Msunduzi’s payroll in respect of outstanding funds due to the estates of the dead municipal employees.

“These funds were paid into a third-party bank account by the employee in his capacity as a senior clerk and acting payroll officer at the time.

“The employee abused his position of trust and used his new position to enrich himself. The actual loss to Msunduzi Local Municipality is R311 773.53, with a potential loss of R16 608.50.”

“There is sufficient evidence to support disciplinary and criminal action against the employee. He committed fraud in that he willfully changed the banking account details of the authorised beneficiaries of the estates of the deceased municipal employees.”

Since his resignation, no disciplinary action could be instituted against the employee because he was no longer employed by the municipality. However, the city has registered a criminal case with the police.

KZN police spokesperson Colonel Robert Netshiunda confirmed the case and said it was ‘spearheaded’ by the commercial crimes’ unit.

The report gave a directive to the accounting officer to institute recovery processes against the employee and that a progress report on the process be submitted quarterly.

According to the report, audit committee members indicated that the controls in the pay office were ‘weak’, therefore such matters recurred as this was the second case that was considered by the audit committee at its previous meeting held on May 24, 2021, whereby systems-related recommendations were not implemented by the previous accounting officer.

“It was emphasised that payroll controls must be extremely stringent. The committee requested that as a matter of priority the city manager should ensure that there was oversight on payroll on a monthly basis in the form of a formal report comprising of audit command language testing similar to that utilised by eThekwini Municipality which will, inter alia, test the following components: employee names on the municipal payroll that match vendors used by the municipality; ex-employees paid after 60 days post their termination date; payroll payments made to inactive employees; payroll payments made to employees before their employment start date; analysis of all new employees; excessive overtime worked over and above hours prescribed by the Basic Conditions of Employment Act 75 of 1997 among others,” read the report.

A committee member, who asked not to be named, said the city leadership was ‘too lenient’ on cases of this nature.

“This is disturbing because there are cases that we never see the end of, especially when the perpetrators decide to resign when disciplinary action is taken against them. Their pensions or properties must be attached to recoup the city’s loss.”

The ACDP’s Rienus Niemand said immediate action should be taken in light of this not being the first time that the payroll has been compromised.

“Criminal charges should go without saying, and most importantly, the management will be held accountable.

“The scourge of corruption must be eliminated at all costs to lay the foundation for clean governance,” said Niemand.

Msunduzi spokesperson Ntobeko Mkhize said the municipality can confirm that the matter was reported to the police, a case was opened, and investigations are underway. There is also a legal process unfolding for a civil recovery.