National Treasury's chief director for local government analysis on Wednesday requested an "explanation of alleged interference in supply chain management procedures" from the Nelson Mandela Bay city manager.
This comes after The Herald reported that at least two senior managers had on Monday been instructed by their political heads to "put on hold the filling of vacancies and tenders".
According to the report, the Municipal Finance Management Act forbids interference in tenders due to it being an administrative function which falls under the city manager, while municipal law prohibits political involvement in the recruitment process "unless a decision is taken by the full council in the case of senior managers".
The Herald reported that a memorandum was sent to senior staff in which it is said that Mayor Mongameli Bobani requested that a moratorium be placed on all vacancies and tenders in one of the municipal directorates.
It was later withdrawn.
Bobani told the publication that it had been retracted because it was "premature and did not follow due process".
"It should have been sent through the city manager's office," he told The Herald.
"There has been a discussion within [the mayoral committee] that we have a reason to believe that quite a lot is not going right [legally] in relation to the two areas.
"It is for this reason that the current leadership is contemplating a moratorium until thorough briefings with compiled reports have been done by the respective directorates."
DA challenging Bobani's election
Chief director Jan Hattingh wrote to municipal manager Johan Mettler, referring to "recent media reports".
These, he wrote, suggest that certain members of the municipal council have attempted to interfere in supply chain management procedures which could constitute a financial offence in terms of the Municipal Finance Management Act; and the administration of the municipality, which could constitute a breach of the code of conduct for councillors.
The act, he wrote, required Mettler to disclose all material facts to the council and mayor.
"In light of these developments… please make available any further information, documents and explanations of these alleged interferences. In addition, provide us with the information on the steps that you are taking as the accounting officer to address this situation," the letter reads.
Bobani was last week elected as mayor following a vote of no confidence against his predecessor, Athol Trollip.
The Eastern Cape High Court in Port Elizabeth is expected to hear a case by the DA next week asking for an urgent review of what it describes as a "coup d'état" when the ANC, EFF and UDM banded together to remove Trollip from his position.