KwaDukuza public purse looted of more than R1.3-million

Two cases of fraud at the KwaDukuza municipality has resulted in more than R1.3-million being lost to ‘ghost’ payments and fraudulent contractor invoices.

This was revealed in a report to a special council meeting by attorneys Shepstone and Wylie last Thursday.

The investigation, commissioned by the municipality, found that one of the cases involved fraudulent payments worth R602 400 made through the municipality’s bank account.

A junior official is alleged to have committed serious financial misconduct by paying stipends to several ‘ghost’ ward committee members.

In the second case, the investigation revealed a further R785 435.56 had been misappropriated by another as yet unidentified municipal official.

The official had allegedly created fictitious contractor invoices and diverted funds into a personal banking account.

Senior officials failed to pick up on the transfers which could have been ongoing since 2015, potentially increasing the amount involved even further.

A legal investigation was launched by the municipal manager Nhlanhla Mdakane relating to the above cases after his department established grounds for it.

The report also revealed a third matter for which the KwaDukuza municipality took responsibility, alleging financial misconduct by a service provider and several officials.

The service provider had not been informed of a change in banking details by the municipality, resulting in contravention of section 8(2)(d) of the Municipal Financial Management Act.

Mayor Lindile Nhaca called for accountability measures and consequence management for all those found to have been involved.

She gave a seven working day deadline to produce results, which are expected on May 3.

“We welcome the report together with its recommendations. It is shocking that an amount exceeding R1.3 million could just be defrauded from the public purse.

“The municipal manager must work with speed to institute criminal procedures with the police,” she said.

Nhaca also called for lifestyle audits to be conducted on officials dealing with payments to external parties, and the findings are to be reported to Shepstone and Wylie, the Special Investigations Unit (SIU) and the Hawks.

ActionSA caucus leader, Nel Sewraj, said it was ‘hogwash’ that Nhaca was firm on fighting corruption, as it was the executive council which commissioned the investigation.

“If Madam Mayor wants to fight corruption, she should begin with her dismissed bodyguards who continued to receive salaries long after their contracts were terminated,” Sewraj said.

Referring to the investigation findings and the case of a service provider not being informed of a change in banking details, Sewraj said the mayor chaired the Municipal Public Accounts Committee at the time.

“Her committee was responsible for writing off the irregular expenditure incurred,” said Sewraj, adding that Nhaca should be held responsible if any financial misconduct had since been found.

In addition to the cases referred to in the report, an investigation into a breach of internal controls around payment for the retrieval of building plans has also been launched.

An official allegedly provided personal banking details into which clients deposited payments for building plans.

Mkhize said commenting on the matter at this stage could potentially jeopardise investigations and allow those involved in the scheme to cover their tracks.

KDM had not responded to a request for comment on Sewraj’s allegations at the time of going to print.

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