Investigation launched

2018-11-28 06:02

A team of the Directorate for Priority Crime Investigation (DPCI) has launched an investigation into alleged tender irregularities at the collapsed Maluti-a-Phofung Local Municipality.

Dr Zweli Mkhize, minister of Cooperative Governance and Traditional Affairs (Cogta) announced in a media statement on 15 November a national government effort to clean the administration of the municipality and resuscitate it.

He anticipates that the investigation will be completed before the end of December this year.

The resuscitation process has further seen the dysfunctional municipality placed under administration. This followed outrage across the spectrum, political parties, business entities and community organisation over the municipality’s inability to meet its mandate to deliver services.

The dismal failure by the municipality led to violent public protests by unhappy residents.

Mkhize revealed that a request for intervention in the municipality’s affair was made by the Harri­smith Business Forum and 13 other organisations as far back as 2015. He said gravely concerned business cited electricity and water infrastructure failures.

“The electricity supply to surrounding factories did not conform to the minimum requirements as prescribed by the National Electri­city Regulator and continuous power interruptions caused water shortages in Harrismith costing business millions of rands in profits each time a failure is experienced.

“During my budget vote speech in parliament in May 2018, Maluti-a-Phofung was identified as one of the 87 municipalities that are in distress due to political and governance, service delivery and financial management challenges experienced. The municipality was also placed under section 139(1) (b) intervention after the Free State Provincial Executive Council’s (PEC) decision to intervene which commenced on 10 February 2018,” said Mkhize.

Mkhize said Maluti-a-Phofung remains in dire despite efforts taken earlier this year.

“Current expenditure of the municipality has exceeded the sum of its actual current revenue plus available surpluses for at least two consecutive financial years. The municipality had an operating deficit in excess of 5% of revenue in the most recent financial year for which financial information is available.

“The municipality is more than 60 days late in submitting its annual financial statements to the Auditor General (AG) in accordance with section 126. The AG has withheld an opinion or issued a disclaimer due to inadequacies in the financial statements or records of the municipality or has issued an opinion which identifies a serious financial problem in the municipality,” explains Mkhize.

A recommendation are made that the Consultative Committee should present a proposed reco­very plan to the minister or his nominee within 60 days from signature of the court order granted by the Harrismith Court Oder and Settlement Agreement signed on 22 October.

“The proposed plan will need to be presented to the minister and MEC of Finance on 14 January 2019,” said Mkhize.

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