Mayor rejects allegations of ‘blowing’ R800-million

Mayor Sifiso ‘Khehla’ Mkhwanazi has vigorously rejected claims that the municipality racked up unauthorised, irregular and fruitless and wasteful expenditure totalling around R800-million.
This was revealed in the last Auditor-General’s report and also questioned by Vryheid Afriforum. Extracts from the report, published by the Herald on April 26, have also led to questions from a resident questioning, among other issues, the expenditure.

The letter described the R800-million as ‘exorbitant and shameful, to say the very least, considering the current state of affairs in our town’.
He goes on to decry service delivery, fingering ‘the dysfunctional municipal call centre, the deplorable state of the public swimming pool, neglected public parks, blocked sewers and the potholed streets’ as proof of the questionable state of affairs in the town.

The letter writer also asks why there has been no formal press release from the municipality, either challenging or appealing the findings of the Auditor-General?
“What disciplinary steps will be taken against the municipal employees implicated in these irregularities?
“Taking the Auditor-General’s findings into account and considering that the MEC for Co-operative Governance in KZN, Bongiwe Sithole-Moloi, decided to place Abaqulusi Local Municipality under administration earlier this year (citing ‘financial mismanagement’, among other things), why would our Honourable Mayor Mkhwanazi choose to interdict such a decision?”
However, Mayor Mkhwanazi, in a written response to the Herald said the newspaper never gave the municipality a chance to reply to the AG’s report.
“The article gave a misinterpreted narrative that the municipal officials were corrupt and had spent the ratepayers’ money for their personal gains.
“No disciplinary steps that will be taken against any municipal official, because the R800 million in question was never spent on personal gains.

“The AG’s gave the municipality a ‘Unqualified Audit Opinion with Findings’. Those findings (unauthorised, irregular and fruitless & wasteful expenditures) were due to the following:
Unauthorised expenditure incurred – was for depreciation and provisions which are non-cash items and they do not have an effect on the initial coffers of the municipality but have to be budgeted for as per the accounting treatment. The municipality has, however, developed a budget funding plan which is monitored every quarter.
Irregular expenditure – this consists of the historically expired contracts emanating from the 2013/2014 financial year, which were month-to-month when the municipality was taken to court by concerned residents who applied for a court order that barred the then acting municipal manager from signing any documents. Therefore, the recent irregular expenditure was incurred due to the procedural deficit because of the Standard Operating Procedures (SOP) silence on the rotation of service providers who are appointed in a panel. However, we have now reviewed the SOP and it has been approved by Council.
Fruitless and wasteful expenditure – this was a result of interest charged by Eskom for overdue accounts due to financial constraints experienced by the municipality. The other cause was the method used by Eskom to send their monthly invoices through the post office, which took longer to reach the municipality. Fortunately, there is a payment plan in place to offset Eskom debt and we have also arranged with Eskom to send their invoices through email rather than the post office.”

Turning to the municipality being placed under administration, Mayor
Mkhwanazi, said KZN Cogta’s report was challenged in court due to the procedural deficit from KZN Cogta’s side.
“The administrative matter that we were faced with was that of the municipal manager, r Zwelihle Dhlamini, who was suspended and has recently been dismissed. No other administrative matter was in question.
“The only labour-related matter we were dealing with at the time (when the intention to bring in the Administrator came about) was that of SAMWU against the municipality for failure to comply with the KZN Conditions of Service Collective Agreement and failure to pay standby allowance. The municipality is continuing to honour its obligation to pay the standby allowance as per the court order.
“In March the High Court’s decision on this matter was presented to the council which cited that the matter be withdrawn by KZN Cogta. This followed from the National Cogta’s advice that it was premature to bring an Administrator to the municipality; and therefore, National Cogta did not approve the intervention to take effect.

“The court ruled that KZN Cogta be liable for the legal costs related to this matter.”
I would like to delve further into the article published by this very same newspaper, the Vryheid Herald, on April 26 that had a headline reading ‘Municipality blew over R800 million of ratepayers’ money’, Auditor-General finds’.
Mayor Mkhwanazi opined that the Herald’s article on the A-G’s report created a ‘false impression that made the rounds on social media, claiming that the current acting municipal manager, Ms SP Dlamini, is corrupt and had utilised the R800 million for her personal gains.’
“Had the journalist who worked on the article offered the municipality the right to respond, all these defaming allegations would have been curbed. It is my appeal that whenever there are questions concerning the municipality, we be given an opportunity to respond.
“These allegations are laughable because the municipality’s budget does not even amount to R800 million. Therefore, how is it possible to steal money that is not even there? I appeal to our citizens that they should not believe everything they read on social media. While we are open to criticism, this should be done with adequate scrutiny. As things stand, the municipality has never had a budget of R800 million and above; it has always been below that amount.

“Looking at the AG’s report, it shows that the municipality is making great strides in improving on its mandate of service delivery. We still have challenges in some areas and we are working tirelessly in ensuring that we bring about change. We are already working on correcting the findings that the AG cited. Granted, that this is our third Unqualified Audit outcome, we are now pushing ourselves to work even harder so that we can eventually get a Clean Audit.
“We had previously managed to clear our Eskom debt in 2020. Unfortunately, we have recently defaulted due to the interest charged by Eskom, the delay method used by Eskom to submit invoices, cable theft and illegal connections. However, we have made a payment arrangement with Eskom and requested that they send invoices via email instead of the post office. Additionally, a private investigator has been appointed to assist in curbing cable theft, and our electrical department is dealing with the issue of illegal connections. We are therefore confident that, come the next AG’s report, we will be discussing a positive story.”
The Herald stands by the facts as presented by the Auditor-General in regards to the unauthorised expenditure of R486.6m;
Irregular expenditure of R309.5m; and fruitless and wasteful expenditure of R24.7m.
(The report can be viewed on https://www.municipalmoney.gov.za/)
Editor’s note: In regards to offering the municipality a chance to reply, we admit that in this incident, this was not followed which we take note of. However, it should be noted that on numerous other occasions, attempts to glean a response from the municipality, regarding such municipal issues, have been met with ‘a no response’.

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The news provided to you in this link comes to you from the editorial staff of the Vryheid Herald, a sold newspaper distributed in the Vryheid area.