KNYSNA NEWS - A Public Protector investigation into allegations of irregular expenditure related to the funding of Knysna Tourism, has resulted in a recommendation that criminal charges be laid against Kam Chetty, the Knysna municipal manager in 2017.

Chetty signed a contract to fund Knysna Tourism to the tune of R4m in 2017, despite a legal opinion obtained by the municipality that cautioned that a tender process had to be followed.

Complaint

Parliament referred the funding of Knysna Tourism to the Public Protector following a complaint from blogger Mike Hampton.

In July 2017 councillor Susan Campbell in an attempt to prevent irregular expenditure, wrote to Chetty and the Public Protector, alerting them to the legal opinion about the funding of Knysna Tourism.

R58 million

The Public Protector released her findings into Knysna's Tourism's funding and "maladministration" by the Knysna municipality relating to the procurement of services by Knysna Tourism on 22 October 2021 and found that irregular expenditure of R58 million had been incurred.

Susan Campbell. Photo: Facebook 

A municipal public accounts committee report on the Public Protector's investigation tabled at the council meeting on Tuesday 10 December, relating to the expenditure, has resulted in in the council writing off the amount as "irrecoverable" since the municipal managers and chief financial officers who were involved with the procurement of the services by Knysna Tourism are no longer working for the municipality.

'Value for money'

The report indicated, however, that the municipality "received value for money during the period referred to in the report".

Council approved recommendations of the municipal public accounts committee (MPAC) pertaining to the remedial actions issued by the Public Protector relating to the procurement of services by Knysna Tourism.

One such recommendation was that the "actions of the erstwhile Municipal Manager, Mr K Chetty be referred to the SAPS for criminal charges in respect of the payment that was made to Knysna Tourism during 2017, after he was specifically cautioned that such payment would constitute irregular expenditure".

'Irrational'

The committee also recommended that the amount of R58 million identified as irregular expenditure by the Public Protector, be written off as "irrecoverable".

KIM's Campbell said she did not agree with the decision of the MPAC or council. "It is irrational to write off the irregular expenditure because, 'value was received', while at the same time proceeding with a criminal complaint in connection with the same expenditure.

'Not optional'

"In November 2024, the Supreme Court of Appeal, in the case of Mbambisa and Others v Nelson Mandela Bay Metropolitan Municipality, held that the plain wording of section 32 (of the Municipal Finance Management Act) … also makes it clear that recovery of unauthorised, irregular, and fruitless and wasteful expenditure by a municipality, is not optional.

"Instead, a municipality is enjoined to recover such expenditure from the person liable for it, hence the word 'must' in 32(2)."

'Unlawful resolution'

Campbell said the court also held that "The defendants" submission that a claim under section 32 should fail where significant value is received for the work done, is also incorrect. No such requirement is contained in section 32.

"I tried to alert council to the court decision, but was not afforded the opportunity by the Speaker. Council also refused to refer the matter back to MPAC and proceeded to adopt the unlawful resolution," said Campbell.

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