No money to pay workers: EFF wants administrator to take over bankrupt Amathole municipality

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An Eastern Cape municipality is bankrupt.
An Eastern Cape municipality is bankrupt.
iStock/File
  • The EFF in the Eastern Cape is calling for the immediate suspension of the Amathole District municipal manager Thandekile Mnyimba.
  • The party also called for a forensic investigation to be launched into allegations of financial mismanagement. 
  • This comes as the municipality announced that it would not pay its 1 670 workers due to strained financial resources.  

The EFF in the Eastern Cape is calling for the immediate suspension of Amathole District municipal manager Thandekile Mnyimba and for a forensic investigation to be launched after the party claimed to have information of financial mismanagement in the municipality.

This comes after Mnyimba issued a circular informing all 1 670 employees of the municipality that they would not be paid their salaries for four months due to strained financial resources.

The municipality cited a low revenue collection rate, an unaffordable R65 million monthly salary bill, the drought and the pandemic as reasons for the municipality's bankruptcy.

READ | No pay for four months for staff of bankrupt Eastern Cape municipality

Mnyimba also cited the fact that the category 6 municipality was unlawfully re-categorised by his predecessors to a category 7 municipality. This paved the way for workers and officials to undeservedly get exorbitant salaries and benefits.     

But the EFF's provincial chair Yazini Tetyana charged that the party had been made aware of staff grievances including victimisation, flouting of the Municipal Finance Management Act, poor financial management and governance by the municipal manager.

Investigation

"As the EFF, we call on National Treasury to act by launching a forensic investigation of the financial affairs of the municipality as it is alleged by staff that the Municipal Manager acted in violation of legislation on numerous occasions by illegally outsourcing functions of the municipality to consultants such as the handling of the staff payroll by a foreign company, thus exposing the institution and staff to privacy breaches.

READ | Eastern Cape staffer arrested for allegedly stealing PPEs

"It is also alleged that the municipal manager increased his own salary, making him one of the most paid public servants in the province," said Tetyana.  

Tetyana said the National Treasury must look into the allegations of financial mismanagement by the municipal manager and the failure of the municipal council to play its oversight role as the Auditor-General had issued a disclaimer due to incomplete information on the financial affairs of the municipality.

"The situation at Amathole District Municipality has become untenable as the municipality has failed to carry out its mandate of the provision of basic service delivery to the poor and marginalised. Municipalities under the district have a sanitation backlog, poor maintained rural roads and no access to water.

"Mnquma municipality, which falls under this district municipality, has been without water for over three years now due to poor maintenance of water infrastructure. What we have seen is the over-reliance on the ferrying of water by water trucks with contracts running into millions while there is no tangible commitment by the municipality, to dig boreholes.

Human rights

"The financial mismanagement in the institution has escalated into a human rights issue as section 27 of the Constitution guarantees everyone a right to access to water. Thus the municipality has failed to carry out its mandate of provision of services in a sustainable manner to its citizens," said Tetyana in the statement.

Asked about the stance on the ADM debacle, Eastern Cape government spokesperson Mvusiwekhaya Sicwetsha said government would help the municipality source funds to pay salaries.

"We are going to work with the municipality to deal with the immediate issue of trying to source funding for payment of the salaries. That is not all we are doing, we are doing this provided that the municipality is going to work with government in investigating the causes that led to the financial collapse of the municipality.

"For us to be able to provide support, we have to do an immediate forensic investigation to look at all financial matters and all decisions with financial implications because without understanding that financial process you would be unable to assist the municipality.

"You might get them funds, but without looking at the causal factors, that money will go into a bottomless bucket and in no time you will be needed to come back."

Welcome

Called for comment, Mnyimba said the municipality would welcome any investigation into any allegations if such an investigation was warranted and justified.

"The financial woes of the ADM started before I commenced duties here, as it was the former municipal manager who unilaterally and unlawfully upgraded the ADM from a grade 6 municipality to a grade 7 municipality, resulting in the salary bill escalating to the current unaffordable situation.

"Furthermore, the staff benefits that were put in place by the former municipal administration are so exorbitant that it's tantamount to a second salary for most employees. Post me commencing duties at ADM in 2017, I commissioned an investigation into the exorbitant and unaffordable salary and benefits bill, and found the anomalies mentioned above.

"No doubt there is serious resistance from staff to remedy this situation, for obvious reasons," said Mnyimba.

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