Cape Town - Early results of a probe into the Western Cape's Kannaland municipality's finances show a possible R14.7m worth of irregularities, the province's department of local government said on Friday.
"The investigation has found that the majority of these purported appointments were irregularly made by deviating from the normal, competitive procurement process and without following the required supply chain management prescripts," said a statement from Local Government MEC Anton Bredell.
"It was further revealed that some of the actual services rendered by those service providers are questionable and did not result in value for money.
"The investigation concluded that the irregular appointments and subsequent payments to these service providers resulted in possible irregular expenditure amounting to R14 741 584.06".
The municipality was on the brink of being cut off by Eskom in February 2016 over its R12.7m debt.
The towns of Ladismith, Zoar, Vanwyksdorp and Calitzdorp fall under the municipality and its main industries of cheese factories, olive farms and wine cellars would have been badly affected by the power cut.
A resolution was adopted by the council at a special meeting in December 2016 to ask the Western Cape government for help.
The Western Cape government approved the request for intervention and its Forensic Services Unit started work in January 2017.
Service providers flagged in probe
Bredell said that the early progress report from the forensic investigation involved allegations of fraud, corruption and other financial misconduct.
Bredell's office said the the initial investigation had flagged at least five providers of various services to the Kannaland Municipality between 2011 and 2016.
Those who could face a criminal investigation allegedly deviated from normal procurement and supply chain policies.
Bredell's statement said that, according to local government head of department Graham Paulse, there were various contraventions of the Municipal Finance Management Act (MFMA), Municipal Supply Chain Management Regulations and the Supply Chain Management Policy by four municipal officials (both current and former).
"In some of these instances, the investigation identified that some of these officials might have committed acts of financial misconduct and other statutory offences contained in the MFMA," said Paulse.
Disciplinary action was recommended for the officials who still work at the municipality.
The municipality is being led by a fragile alliance between the African National Congress and the Democratic Alliance, to block the Independent Civic Organisation of SA in council.