Opposition parties have questioned whether Lekwa municipality followed the required legal and procurement processes when extending the contract.
Lekwa Local Municipality says a R1.9 million payment was a variation to an existing contract and did not bypass procurement processes. Picture: ActionSA
Lekwa Local Municipality is under scrutiny after more than R1.9 million was approved and paid to a service provider amid allegations that the required council approval process was not followed.
The ANC-EFF coalition government reportedly extended the scope of Inkazimulo Consulting (Pty) Ltd, which already had an approximately R8 million contract to provide professional accounting services.
DA alleges financial misconduct over contract extension
The DA said its investigation revealed that the scope extension was implemented in January 2026, with payments already being processed, while council was only formally informed of the matter in August.
The DA member in Lekwa, Sithi Silosini, said the process amounted to financial misconduct.
“The extension was already done in January and payments to the service provider were being processed, yet council was only informed in August, as if the process had not started yet. That is financial misconduct,” Silosini said.
She said the additional services were already covered by the original service-level agreement and accused the municipality of misleading council when seeking approval for the R1.9 million extension.
Silosini said the extension was done fraudulently and that her party was in the process of laying criminal charges.
She said the matter could also trigger a material irregularity involving the auditor-general.
Questions raised over MFMA compliance
Independent Lekwa Party president Corné Stoltz said his concern was not simply the additional R1.9 million, but whether the correct legal and procurement processes were followed.
“I understand that the additional work and/or extension had already commenced in January 2026 and that payments to the service provider were already being processed, while council was only formally presented with the matter months later,” Stoltz said.
“If that chronology is correct, then this raises a fundamental question. How could additional work be commenced and payments processed before council had been properly asked to consider and approve the amendment?”
Stoltz said Section 116(3) of the Municipal Finance Management Act (MFMA) regulates amendments to municipal contracts and requires reasons for a proposed amendment to be tabled in council before the contract is amended, together with the prescribed public notice and opportunity for representations.
He said councillors should have been given the original contract, additional scope of work, motivation for the amendment, payment history, supply chain management process followed and the legal authority under which the additional work was commenced.
Contract value and procurement process questioned
Stoltz also referred to Sections 62 and 63 of the MFMA, which place duties on the accounting officer regarding financial management, internal controls and preventing unauthorised, irregular and fruitless and wasteful expenditure.
He said Section 32 dealt with such expenditure and that it could not simply be retrospectively made acceptable by a later council decision.
“The applicable investigation, accountability, recovery and reporting processes must be followed,” he said.
Stoltz said Section 171 was also relevant where conduct by a municipal official amounted to financial misconduct.
“It would be premature for me simply to declare that financial misconduct has occurred.
“That is a matter that must be properly investigated and determined through the prescribed processes,” he said.
He also raised concerns about compliance with the municipality’s supply chain management policy and Section 217(1) of the constitution, which requires public procurement to be fair, equitable, transparent, competitive and cost-effective.
“The fact that the same service provider already had an approximately R8 million contract – and was then proposed for a further approximately R1.9 million – makes proper scrutiny of the additional scope, procurement process, value for money and legal authority particularly important,” Stoltz added.
Municipality disputes procurement bypass claims
Lekwa municipal spokesperson Lubabalo Majenge said the municipality noted the concerns.
“The municipality wishes to clarify that the matter relates to a scope variation/variation order to an existing contract. It should not be understood as the award of additional work outside the original contract.
“The additional services are related to the original appointment. This does not constitute a new procurement and/or bypassing the procurement process,” Majenge said.
