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Provincial Investigations Report Umhlatuze & Maphumulo Municipalities

Report to the Select Committee on Co-Operative Governance and Traditional Affairs on investigations conducted in Umhlatuze and Maphumulo Municipalities by KwaZulu-Natal Provincial Executive, focusing on financial misconduct and irregularities.

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Provincial Investigations Report Umhlatuze & Maphumulo Municipalities

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  1. PROVINCIAL INVESTIGATIONSUmhlatuze and Maphumulo MunicipalitiesKWAZULU-NATALReport to the Select Committee on Co-Operative Governance and Traditional Affairs21 January 2011

  2. CONTENT • Purpose • Progress Report on Investigations • Umhlatuze Local Municipality • Maphumulo Local Municipality

  3. PURPOSE • To provide the Select Committee with a report on investigations at the Umhlatuze and Maphumulo Municipalities by the Provincial Executive of KwaZulu-Natal in Municipalities in terms of Section 106(1)(b) of the Municipal Systems Act, Act 32 of 2000

  4. Umhlatuze Local Municipality

  5. BACKGROUND • The MEC authorized an investigation at the Municipality on 10 April 2010 . • Investigators commenced the field work on 12 May 2010. • First progress report submitted to the Department on 31 July 2010. • MEC was briefed on the content, findings, conclusions reached and recommendations included in the final report on Tuesday, 5 October 2010.

  6. SCOPE OF WORK • The serious cash flow problems experienced by the municipality • Non – adherence to Council’s land sales policies and procedures and impact of the non-adherence on cash flows • Possible gross financial misconduct by City officials • Possible negligence by City officials in the performance of their duties in budgeting for unrealistic income in so far as land sales is concerned, given the economic climate at the time and/or being aware of imminent cash flow problems that could be experienced and not reporting such timely to Council or taking adequate appropriate preventative measures/interventions to address the situation

  7. SCOPE OF WORK • Possible application of undue influence by City Councillors on the land sales processes and procedures resulting in deviations from set policies in direct contravention of section 11 of Schedule 1 to the Municipal Systems Act No. 32 of 2000 (“MSA”) • Other irregularities pertaining to non-compliance with proper policies and procedures particularly relating to contract management/formal tender processes not being followed and, if so, who is accountable?

  8. PROGRESS • The investigation has been finalised. • Council was in recess and the Municipality is to table the forensic report before full council by the end of January 2011 and provide a response to the Department within 21 days of receipt thereof.

  9. Maphumulo Local Municipality

  10. BACKGROUND • Allegations were received through a report from the National Anti-Corruption Hotline (“NACH”), form various sources within the Municipality and through other external parties that irregularities were occurring within this Municipality. • MEC commissioned an investigation in terms of section 106 of the Municipal Systems Act on 15 September 2010.

  11. PROGRESS • The municipality has failed to comply with the process of the investigation. • The MEC has further instructed the municipality by means of a notice in terms of Section 106 ( 1) (a) which should be in the receipt of the municipality shortly.

  12. THANK YOU

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