A list of shame claims: Allegations of fraud, corruption and maladministration at JB Marks Municipality

2019-07-02 07:35
North West Premier Job Mokgoro. (Gallo Images, file)

North West Premier Job Mokgoro. (Gallo Images, file)

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The JB Marks Municipality has been rocked by a list of claims detailing alleged fraud, corruption and maladministration, as the council's leadership tries to avoid being placed under administration by the North West provincial government.

A leaked document compiled by concerned council officials details the list of claims as the reasons why the municipality (which houses Potchefstroom and Ventersdorp) should be placed under administration in accordance with Section 139 of the Constitution.

The document details alleged irregular expenditure in several projects such as the Sarafina Stadium, Appledraai access road, construction of roads, ghost payments, overtime payments, irregular appointments as well as fraud and corruption, among others, as reasons why the provincial government should intervene and take over the running of the municipality.

Many of these projects have also been named in a 2016/17 Oversight Report, which recommended that the council appoint an independent forensic investigating company to probe a range of projects, including the Apple-Draai access road (Ventersdorp), Sarafina Stadium, Internal Road Tshing Ext 3 (Ventersdorp) and internal roads and storm water in Ext 7 (I'kageneg Ext 7).

The municipal public accounts committee (MPAC), which compiled the oversight report, noted that the issues were raised "in the 2016/2017 management letter".

READ: JB Marks Municipality in the North West placed under administration

In June last year, the North West portfolio committee on local government instructed the MPAC "to thoroughly conduct an investigation into the construction project of the Sarafina Stadium in Ikageng near Potchefstroom which was approved for R45.5m".

The decision to place the troubled municipality under administration is pending subject to consideration by the provincial executive.

The municipality initially received notice that it would be placed under administration in May. The letter seen by News24 stated it would be under administration for a minimum of six months and a maximum of one year. It did not go into detail as to why JB Marks had to be placed under administration, News24 earlier reported.

The decision was later challenged in council on the basis that the municipality was not consulted. The municipality was financially stable and no service delivery was compromised, spokesperson Victor Boqo previously told News24.

ALSO READ: JB Marks council rejects North West govt's decision to place the municipality under administration

The DA caucus leader in the municipality, Hans-Jurie Moolman who is in support of the municipality being placed under administration, said he had written dozens of letters to the municipality and mayor, specifically listing concerns which were similar to those stated in the leaked council document.

"There was an attempt to stop or frustrate Section 139 from being implemented, we voted against [the move to block the administration] by the council. In August 2018, the mayor wrote to the MEC and asked for an intervention, now when [an] intervention is implemented, he is not keen for it to happen - why?" said Moolman.

The concerns raised by the opposition ranged from overspending on overtime, to the appointment of Giyani Makamu as chief labour relations officer - who allegedly does not have the qualifications for the post and disparities in salaries. Earlier this month, News24 reported that Makamu's appointment was being questioned by council officials and municipal workers' union Samwu.

"One of the issues is overtime - we have been told by officials that someone who was supposed to earn a basic salary of R19 000 a month walked away with more than R50 000. Another issue is Mr Makamu, who is essentially the human resources manager but does not possess a degree or the necessary skills or qualifications. And another issue [is that] of ghost payments where small amounts are transferred but the goods are not received," Moolman alleged.

ALSO READ: More woes for troubled JB Marks Municipality as cloud hangs over chief labour relations officer's appointment

Moolman further claimed that Mayor Kgotso Khumalo had allegedly not responded to over 40 letters since he assumed office.

"All I can say is that from my own experience is that I have raised several issues with the mayor via submitted letters and he ignores them. I have warned him that I am notifying him and it is up to him to take action.

"He must account for the fact that he is turning a blind eye to what is happening in this municipality," he said.

In the municipality's 2017/2018 annual report, the Auditor-General of South Africa (AGSA) noted concerns about the flouting of supply chain management regulations.

The AGSA noted the following:

  • Some quotations were accepted from and contracts were awarded to bidders who did not submit a declaration on whether they are employed by the state or connected to any person employed by the state, as required by SCM regulation 13(c). Similar non-compliance was also reported in the prior year.
  • Sufficient appropriate audit evidence could not be obtained that persons in service of the municipality whose close family members had a private or business interest in contracts awarded by the municipality disclosed such interests as required by SCM regulation 46(2)(e)and the code of conduct for staff members issued in terms of the Municipal Systems Act of South Africa, 2000.

On Wednesday, Auditor-General Kimi Makwetu revealed that no municipality in the North West province had received a clean audit for the 2017/2018 financial year.

"These audit outcomes, the worst since 2012/13, are a clear indication of the deteriorating accountability, a blatant disregard of our messages and recommendations, complacency and a lack of commitment to decisively address key areas of concern as well as a lack of political will to effect consequences," he stated under a section about the North West in his annual report.

The AGSA report further stated that despite the commitments made by the leadership to address "root causes and deficiencies", the AG had not received a response to their messages with the required agency.

"The political instability in the province and the tone of those charged with governance have created an environment that is not conducive to accountability, good governance and effecting consequences," he charged.

The JB Marks Municipality was wracked by irregular expenditure of R1.27bn, unauthorised expenditure of R168.6m and fruitless and wasteful expenditure of R3.7m, according to the state auditor's report.

Irregular expenditure is defined as expenditure "that was not incurred in the manner prescribed by legislation" by the AGSA. It is considered an "indicator of irregularities in processes followed in the procurement of goods and services and a measure of a municipality's ability to comply with legislation relating to expenditure and procurement management".

Although the JB Marks Municipality's audit outcomes were noted as improved from a disclaimed opinion to a qualified opinion, the AG concluded that this was not sustainable.

"The sustainability of these improvements is doubtful, however, as there was still an over-reliance on consultants, not all vacancies in the finance units were filled, and weaknesses in the control environment were not addressed during the year," the AG stated.

Despite sending emails, text messages and making several calls to two spokespersons in the JB Marks Municipality, News24 did not receive comment before publication.

The office of North West Premier Job Mokgoro said it was not aware of any of the documents News24 made reference to and said the municipality would be better positioned to provide them.

The premier's spokesperson, Vuyisile Ngesi, would only say why the provincial government had invoked Section 139 of the Constitution.

"However, the North West provincial government has already begun the process to place the JB Marks Local Municipality under administration by invoking Section 139 of the Constitution due to the fact that, following consultation with the municipality, there is a need to collaboratively capacitate the municipality in areas where they are found to be lacking or facing challenges so as to increase their ability and capacity to deliver much-needed quality services to the people."

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