KNYSNA NEWS - Following a request by Minister Nkosazana Dlamini-Zuma to provincial local government minister Anton Bredell to investigate allegations of fraud, corruption, financial maladministration and malpractice within Knysna Municipality, Bredell has given the municipality until Wednesday this week to respond.
Bredell’s letter dated 23 June, a copy of which is in possession of Knysna-Plett Herald (KPH), afforded the municipality 15 days to provide answers to the 16 allegations mentioned therein.
This letter followed in the wake of correspondence from Dlamini-Zuma to Bredell, dated 20 May, requesting him to investigate allegations brought by community organisation Knysna United against the municipality.
On Tuesday, Bredells office confirmed that they received a request from Dlamini-Zuma office to investigate.
Bredell requested the municipality to provide information and documentation in order for his office to assess whether there might be a reason to believe that the municipality is not fulfilling its statutory obligations or that maladministration, fraud, corruption or any other serious malpractice has occurred or is occurring. Upon failure to respond, Bredell said his office will presume the municipality does not intend commenting on the matters and may proceed to assess the relevant information to determine whether, and to what extent, further steps will be taken to investigate the allegations.
Bredell's letter, addressed to Knysna Speaker Mertle Gombo, highlights an alleged irregular business deal with Sakhikhaya Suppliers CC, by virtue of which the municipality allegedly spent R113-million on prepaid water meters at inflated prices without any prospects of recovering such expense. “It is alleged the meters purchased exceeded the demand required and many water meters are currently in storerooms and not installed. It is alleged that this expenditure amounts to irregular or fruitless and wasteful expenditure." According to Bredell, the auditor general (AG) made an adverse finding against the procurement "but the municipality proceeded with the procurement. They forced the meters onto poor and vulnerable communities, while not doing the same in the affluent areas”.
He said irregularities pertaining to the replacement of asbestos roofs of RDP houses in Hornlee were another allegation. “Irregular approval of building plans of properties adjacent to the Boatshed that exceeded the permitted roof height. It is alleged that the approvals were unlawful as the applicant failed to submit an application for departure or other relevant land use applications,” he said.
Other allegations in the letter include:
• Failure to disclose immovable properties valued at about R64-million, as contingent assets, in the annual financial statements for the 2018/2019 financial year, constituting misleading information to the AG.
•Irregular procurement process followed in Tender No. T03/2019/20, regarding the construction of concrete slabs and top structures in Hornlee, and the role of the CFO Mbulelo Memani as chairperson of the bid adjudication committee (BAC).
•Irregular process followed in Tender No. T41 of 2018/19, regarding the Hornlee Sewer Upgrade Knysna, and the role of Memani as chairperson of the BAC.
•Irregular procurement process followed in Tender No. T06/2019/2020, regarding the Hornlee Sewer Upgrade. It is alleged that this tender was advertised shortly after the cancellation of Tender No. T41/2018/19, which was allegedly awarded but the CFO allegedly recommended the reversal of the award, which was allegedly sanctioned by the municipal manager.
•Failure to take adequate action against those implicated in the De Swardt Report (independent legal opinion sought to investigate maladministration and misconduct in Knysna Municipality in 2018. The report addressed 15 allegations against former MM Kam Chetty, including misconduct and fraud, and also recommended that action be taken against former mayor Eleanore Bouw-Spies, also for fraud.)
•Failure to institute and finalise disciplinary hearings against councillors Ricky van Aswegen and Donovan Pofadder for their alleged undue interference in the administration of the municipality and their role in preventing people from getting houses.
•Maladministration relating to the mismanagement of the fire emergency donations.
•Maladministration requiring the municipality to apply for a loan of R71-million from the Development Bank of Southern Africa (DBSA) to cover up shortfalls in other projects.
• Failure to timeously investigate or discipline CFO Memani for various allegations of irregularities, which includes allegations of the CFO’s intentions towards keeping municipal infrastructure grant (MIG) and integrated municipal environmental policy (IMEP) funds.
• Irregularity sprouting from the municipality’s alleged failure to refund electricity customers, who were charged more than the regulated Nersa rate.
• Failure to timeously institute and commence with disciplinary proceedings against suspended municipal manager Dr Sithembele Vatala for various allegations of irregularities.
• Failure to take action against the establishment of an informal settlement on a dune situated in or about Groenvallei, Sedgefield, including the installation of municipal services without the required authorisation.
•Irregularities relating to Tender No. 36/2019/20 regarding the appointment of consulting engineers for various municipal infrastructures and building projects.
Knysna municipality spokesperson Christopher Bezuidenhout confirmed that they received two letters from the Western Cape provincial government. The first letter was in April 2020 to which a response was provided, said Bezuidenhout, and the second one with further allegations dated 23 June. "The municipality is in the process of collating factual and accurate information to respond to the latest letter received,” he said.
Knysna United chairperson Ralph Stander called for a forensic investigation into the municipality's finances: “All those who are implicated must be held accountable from both council and administration,” he said.
Bredell's spokesperson James-Brent Styan said Section 106 of the Local Government: Municipal Systems Act 32 of 2000 regulates the provincial minister’s powers to initiate investigations into allegations of maladministration, fraud, corruption or any other serious malpractice in the municipality. “It is also important to note that investigations into allegations of this nature are governed by statutory prescripts and that there are strict constitutional and statutory parameters within which provincial government can intervene in a municipality," Styan said.
"Before section 106(1) can be invoked, the provincial minister must have a reason to believe that a municipality cannot or does not fulfil a statutory obligation or that maladministration, fraud, corruption or any other serious malpractice has occurred or is occurring in the municipality. Any action taken to investigate allegations must furthermore be procedurally sound and defensible, and requires substantiating evidence or documentation to support the allegations,” he said.
Styan added that correspondence has been addressed to the Speaker in terms of the legislation to inform the municipality of the allegations and to afford the municipality an opportunity to comment on such allegations. “That is where the process is at the moment, we await feedback from the municipality,” he said.
The Knysna Ratepayers’ Association on Tuesday said they are “heartened” by these latest developments.
“Having been the target of verbal abuse and a total freeze-out by former acting MM Gratz to avoid dealing with our complaints against CFO Memani and others, we are heartened to see that none other than Western Cape MEC for local government Anton Bredell is finally taking our complaints about corruption seriously.”
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