Question NW5648 to the Minister of Cooperative Governance and Traditional Affairs

(1) Whether he has been informed about the allegations that the Municipal Manager of Raymond Mhlaba Local Municipality (name and details furnished), has made personal purchases of luxury items, which appear inconsistent with the remuneration associated with her position, and concerns that the purchases could potentially constitute indicators of undisclosed financial benefits or corrupt payments; if not, what is the position in this regard; if so, what steps have been taken to establish the (a) veracity of the reported purchases and (b) source of funds used to finance them; (2) whether any investigation has been initiated by the municipality, the Eastern Cape Provincial Government, the Special Investigating Unit, or any other relevant law enforcement or oversight body into the financial affairs of the specified person, the alleged personal purchases or potential conflicts of interest; if not, why not; if so, what are the relevant details; (3) whether a lifestyle audit has been conducted or requested in respect of the person; if not, why not; if so, what are the relevant details; (4) whether he will request the relevant authorities to conduct such an audit; if not, why not; if so, what are the relevant details; (5) whether any investigation has examined the possibility that the reported purchases may be linked to corrupt payments, unlawful financial benefits, procurement irregularities and/or other forms of financial misconduct involving municipal contractors or service providers; if not, why not; if so, what are the relevant details?

The question concerns allegations regarding the Municipal Manager of Raymond Mhlaba Local Municipality, including reported personal purchases alleged to be inconsistent with the remuneration associated with the position and possible concerns regarding undisclosed financial benefits, corruption, conflicts of interest, procurement irregularities or financial misconduct. The Department has not independently verified these allegations, and they should not be regarded as established facts.

Section 106 of the Local Government: Municipal Systems Act, 2000 (Act No. 32 of 2000) provides a provincial oversight mechanism where the MEC responsible for local government has reason to believe that a municipality is failing to fulfil a statutory obligation, or that maladministration, fraud, corruption or other serious malpractice has occurred or is occurring. The MEC may, where considered necessary following the statutory process, designate a person or persons to investigate the matter.

Where verified information gives rise to allegations of financial misconduct or financial offences, the applicable provisions of the Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of 2003) and the Municipal Regulations on Financial Misconduct Procedures and Criminal Proceedings provide for the appropriate reporting, investigation and referral processes.

No. The Department had not previously received verified information establishing the allegations referred to by the Honourable Member.

The matter has accordingly been referred to the Eastern Cape provincial department responsible for local government to obtain information from Raymond Mhlaba Local Municipality and establish:

(a) whether the reported purchases occurred and the relevant circumstances surrounding them; and

(b) the source of the funds used for the reported purchases, to the extent that this may lawfully be established by the competent authority.

Any further action will be determined based on verified information and in accordance with the powers of the competent authorities.

The Department does not currently have verified information confirming whether Raymond Mhlaba Local Municipality, the Eastern Cape Provincial Government, the Special Investigating Unit, or another competent law-enforcement or oversight body has initiated an investigation into the matters raised in the question.

The provincial department has therefore been requested to establish whether any investigation, referral or other formal process is underway and, if so, to provide the nature, scope, legal basis and status of such process.

Should the information obtained provide grounds for further investigation or referral, the matter must be dealt with by the authority legally competent to investigate and take appropriate action.

The Department is not presently in possession of verified information confirming whether a lifestyle audit or other related investigative process has been conducted or requested in respect of the Municipal Manager.

The provincial department has been requested to establish whether any such process has been undertaken and, if so, to provide the relevant information, subject to applicable legal and confidentiality requirements.

The Minister has requested that the relevant provincial structures first verify the allegations.

Upon receipt of the verified information, the competent authorities will be requested to consider whether the circumstances warrant a lifestyle audit or other appropriate investigative process in accordance with the applicable legal framework.

Where the information obtained provides the relevant MEC with reason to believe that circumstances contemplated in section 106 of the Municipal Systems Act exist, the matter must be dealt with in accordance with the processes contemplated in that section. The statutory threshold under section 106 is the MEC having “reason to believe” that the stipulated circumstances exist.

The Department does not currently have verified information establishing that the reported purchases are linked to corrupt payments, unlawful financial benefits, procurement irregularities, municipal contractors or service providers, or other forms of financial misconduct.

The provincial department has therefore been requested to establish whether any existing investigation has considered these matters and whether credible information indicates a connection between the reported purchases and municipal procurement, contractors, service providers, or the receipt of any unlawful financial benefit.

If the verification process discloses an allegation of financial misconduct as contemplated in the Municipal Finance Management Act, the applicable reporting and investigative procedures prescribed in the Municipal Regulations on Financial Misconduct Procedures and Criminal Proceedings must be followed, including reporting to the municipal council, provincial treasury, and National Treasury where required. The Regulations specifically prescribe this reporting route for alleged financial misconduct involving a municipal accounting officer, senior manager or chief financial officer.

Any evidence of a possible financial offence must be dealt with in accordance with the applicable statutory procedures, including referral to the South African Police Service where required.