KNYSNA NEWS - Legal representatives of former Knysna Municipal Manager Dr Michele Gratz have responded to a statement issued by the Knysna Ratepayers Association (KRA) this week accusing the municipal council of illegally writing off millions of rand of alleged irregular expenditure. 

Gratz strongly denies any wrongdoing and rejects the allegations through her lawyer.

The KRA stated that in defiance of the Auditor General, Council, on the recommendation of Dr Gratz, wrote off the expenditure without an investigation by the Municipal Public Accounts Committee in term of section 32(2) of the Municipal Finance Management Act. 

KRA stated that Council may only write off irregular expenditure after it has been investigated by the relevant committee of council.

In response to this accusation Dr Gratz’s legal council denied that Council’s decision was unlawful and issued the following statements: 

• The Municipal Manager cannot take decisions on irregular expenditure – council does;

• There was nothing unlawful about the decision taken: the Auditor General (“AG”) had retrospectively changed the manner in which it views section 32 “piggy backing” on another municipality’s tender. The process that had always been followed, was followed and the services were delivered.

• For accounting purposes for the AG the manner in which certain of the tenders were awarded in 2018/2019 financial year were revisited and as the AG had changed his position on the interpretation of the section retrospectively these amounts were deemed to be irregular expenditure. The AG met with the MPAC (Municipal Public Accounts Committee) on 4 March 2020 and discussed the matter with them as well as the Senior officials. The AG confirmed that it is an interpretation issue.

• There were historic amounts on tenders that had been awarded in the previous financial year. The work was done and the monies were paid. No money was stolen and there was nothing amiss with the manner in which the expense was incurred at the time it was incurred.

• The only reason it became regarded as “irregular” is due a change in the interpretation by the AG who wanted to apply the change retrospectively. Nothing more, nothing less.

• There is no money missing and services were rendered for the payments made.

• Ms. Campbell, who is the chair of the KRA and who is the founding member of the political party KIM may be of the opinion that there is something wrong with the process. However, that is her opinion and it certainly does not behoove a newspaper to accuse our client of illegal behavior and taking unlawful decisions. Our client, who is incensed by your misleading article and concerned about the negative effect it will have on her good name and reputation and on her future employment opportunities, reserves her rights against you.

• As an example of how something can be deemed to constitute irregular expenditure, there was a further item at that same council meeting on 28 May 2020 where an amount in excess of 22 million rand had to be written off as the AG deemed that tenders should not have been awarded as the BAC (Bid Adjudication Committee)had one senior member short. (The director of Planning, Ms. Boyce, had failed to attend at least 10 meetings leading to that being deemed to be irregular expenditure.)

• In respect of the complaints against the CFO and the findings of the disciplinary board we wish to reiterate that this was an item that was in-committee: in other words, on green papers and nobody has given any consent to anybody to publish any information.

• Publication thereof is an offence.

• Without going into the merits of the matter we wish to record that conduct of the CFO which matter served in green papers on 11 June 2020 is largely based on the handling of a tender post 30 June 2019. The irregular expenditure which our client recommended to Council to write off is for the 2018/2019 financial year.

• The article calls the decision taken by council “patently unlawful” and insinuates that our client attempted to mislead council and accuses her of “defying the AG, contravening the MFMA and making a decision to illegally write off irregular expenditure of a whopping R93 761 895.”

• The headline and the content of the article are calculated to diminish our client’s standing in the community by accusing her of unethical and unlawful behavior and of contravening legislation all of which allegations are denied by our client.

Dr Gratz’s lawyers also placed on record that they are aware that notwithstanding numerous requests to the Knysna Rate Payers Association to divulge the size of its membership base they have not done so. “Suffice it to say that KRA is very definitely not representative of the town. There are many other civic organizations who represent various interest groups in Knysna.”

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