Exorbitant salary for CFO flouts all rules

2013-09-17 00:00

A CASH-STRAPPED municipality in KwaZulu-Natal offered to better a R720 000 annual salary offer by another municipality to their chief financial officer (CFO), despite the council’s finances being in shambles.

This was revealed at a joint sitting of the finance and co-operative governance and traditional affairs (Cogta) portfolio committees last week, when the financial affairs of eDumbe Municipality were scrutinised.

The meeting heard that when the Hlabisa Municipality offered Qhamu Mntambo a salary of R720 000, eDumbe Municipality upped the game by offering her an annual salary of R850 000.

Cogta Department general manager for municipal finance Joey Krishnan said Mntam­bo had been employed by the municipality since September 2011 and under her tenure the municipality regressed from a qualified audit in 2010/11 to a disclaimer in 2011/12. This means the required supporting documents, for example for expenditure, could not be provided.

However, she successfully applied to the Hlabisa Municipality.

“The CFO accepted that position, showed up for work on August 28 and 29 this year, but then on September 1 did not show up for work because the CFO had been called by the [eDumbe] mayor and offered an increase,” Krishnan said.

Krishnan said Cogta was also concerned that the eDumbe Municipality did not comply with the Municipal Systems Act to advertise the CFO’s post before rehiring Mntambo. She said the rehiring of Mntambo was also done without the knowledge of MEC Nomusa Dube and Cogta.

IFP’s Lionel Mtshali described the exorbitant salary packages as “unaffordable and unsustainable in the two municipalities”.

Krishnan said they will be taking legal advice on whether or not this appointment is valid in respect of the municipality.

Mntambo did not respond to questions e-mailed to her by the time of going to press.

A Cogta report tabled to the joint committee showed that eDumbe Municipality’s finances had regressed in audit outcomes because of incorrect information in annual financial statements — despite this being pointed out by auditors — as well as incorrect leave provisions.

The municipality had also recorded a loss of R1,7 million through, amongst other things, electricity theft.

The municipality had incompetent staff in its finance department and used consultants to perform its administrative activities, including internal auditing. The conditional grants allocated to eDumbe Municipality were used for operational expenses and the council was dependent on grants from national government.

The municipality also spent less of its funds on infrastructure repairs and maintenance, with only 1,3% spent in 2011/12 and 0,74% in 2012/13.

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