10 May 2021
SAMWU calls on the removal of Umsobomvu Mayor, Municipal Manager and Director Corporate Services following a forensic report by the Provincial Government proving allegations of corruption, fraud, maladministration and nepotism.
The South African Municipal Workers’ Union (SAMWU) in the Northern Cape has learnt of a forensic audit report which was commissioned by the Northern Cape provincial government and the South African Local Government Association (SALGA) to investigate allegations of corruption, fraud, maladministration and nepotism which have been made by the union and residents of Umsobomvu Local Municipality.
SAMWU is vindicated that all of the allegations which we made were finally proven to be true and that corruption, fraud, maladministration and nepotism in the municipality has been going on for many years with impunity. Instead of addressing issues that were raised by the union and residents, the municipality embarked on a crusade to systematically suspend and dismiss whistleblowers.
We are concerned that since the finalization of the report and the subsequent letter issued by the Provincial Government directing the municipality to convene an urgent Council meeting to table the report, the Mayor and his team have been hiding the report from Council with the hope that it never sees light of day.
On R2.2 million fraud
According to the report, the municipality incurred losses of over R2.2 million through fraudulent activities wherein an official of the institution created fictitious deposits into his bank account and those belonging to individuals who are related to him. These fraudulent deposits were purported to be for overtime and standby allowances; however, it was discovered that these transactions were nothing but money fraud and laundering.
Despite there being a formal disciplinary inquiry against the official involved, the official abruptly resigned from employment thus resulting in the municipality abandoning the disciplinary process including recouping the much-needed municipal funds.
The findings of the report were that disciplinary action should be instituted against the Municipal Manager, Mr AC Mphela, the former CFO, Mr D Visaggie and the Accountant, Ms M Mostert for dereliction of their duties which resulted in the municipality suffering a loss of over R2.2 million.
On procurement of secondhand trucks
In 2020, the municipality embarked on a process of procuring tipper trucks which were supposed to accelerate service delivery to the residents of Umsovomvu. However, given the financial situation that the municipality found itself in, a decision was arrived at that secondhand trucks should be procured.
The municipality finally issued an advert for the acquisition two used trucks, however this process was abandoned after the municipality received only one quotation which the institution deemed to be unaffordable as a result of its financial situation.
Despite the provisions of the Municipal Financial Management Act (MFMPA) and Supply Chain Management Policy, the Municipal Manager, Mr AC Mphela proceeded with a deviation from the above legislation and split the tender in such a way that there would be no need for this procurement to go out to tender.
The institution eventually bought two trucks: a 2008 model for over R103 000 and a 2001 model for over R488 000. This despite supply chain policies clearly indicating that any procurement over R200 000 should be subjected to a tender process.
The forensic report has found that the Municipal Manager has contravened the provisions of the MFMPA and supply chain policies of the institution including the fact that the Municipal Manager intentionally split the procurement of the trucks into parts so that it may not be subjected to procurement policies of the institution.
The report found that disciplinary actions should be taken against the Municipal Manager, the former CFO and the Technical Manager Mr. S Nkcithiso. This report further concluded that the procurement of both trucks should be recorded as irregular expenditure and that such should be disclosed in the audited financial statements of the municipality.
On stolen municipal truck
In 2017, the municipality employed the services of a security company to guard and secure municipal assets. On October 24, a municipal truck owned truck was stolen from the municipality’s workshop despite there being physical security on the premises.
The security guard revealed that the people who took the truck had in their possession the truck’s keys and claimed that they were collecting the truck for road construction in Coslesburg. The fact that the thieves had with them keys belonging to the truck led the security guard into believing that the individuals were indeed employees of the municipality.
The forensic investigators however found contradictions in the events leading up to the disappearance of the truck. They further found that the municipality has failed to institute an internal investigation into the disappearance of the truck and that no action was taken against the security company which the truck was stolen under their watch.
On the Mayor undue benefits
While the investigators were busy with their investigations into the affairs of the institution and verifying assets of the municipality, they found a vehicle with a Western Cape registration at the workshop. This baffled investigators as they knew that all municipal fleet were registered in the Northern Cape to which the Umsovombu Local Municipality belonged.
Employees who were found fixing the vehicle confirmed that the vehicle belonged to the Mayor. Upon further investigation with the Department of Transport, it was discovered that the vehicle is registered in the name of the Mayor.
As SAMWU, we fully agree and concur with the investigators that the fixing of a personal vehicle of the Mayor constitutes fraud and undue benefits extended to the Mayor, as such, we demand that the Mayor reimburses the municipality for the costs incurred.
In 2019, the municipality issued an advert for a vacancy in the municipality for the position Artisan Mechanic which was vacant since 1994. Several individuals showed interest in the vacancy and therefore proceeded to send through their applications.
In cohorts, Municipal Manager and the Director of Corporate Services neglected applicants who matched the required education and experience for the vacancy and opted to shortlist both their sons along with another individual thus creating conflict of interest which was not disclosed to the interview panel. This resulted in the son of the Municipal Manager appointed to the advertised position.
The forensic report found that both the Municipal Manager and the Director of Corporate Services were conflicted in this process leading upto the appointment of the latter’s son. The report further classified this appointment as irregular and that disciplinary action should be taken against the two.
In 2011, Mrs. Toto, wife Cllr Toto and a former employee of the Pixley Ka Seme District Municipality was employed by the Umsobomvu Local Municipality as a Career Guidance on contract basis. Her terms of appointment were changed to that of a permanent employee in the same year that her husband became Mayor.
Then in 2016, the same year that Cllr Toto was elected Mayor of Umsovomvu Local Municipality, a vacancy arose in the municipality for Housing Clerk, the advert clearly indicated that the applicant should have minimum of Grade 12, 3 years’ experience in similar role. Two applications were received, one from the Mayor’s wife and another from an applicated who had the experience and a bachelor’s degree.
Despite the Mayor’s wife only having a matric qualification, the other applicant was overlooked for the position by both the Municipal Manager and the Director of Corporate Services to evidently please the Mayor.
In addition to this, in her application for the vacancy Housing Clerk vacancy, Mrs Toto lied that she had been acting in that position for some time and used that as motivation for her to be appointed.
These facts were well known to both the Municipal Manager and the Director but they allowed her to be short listed and subsequently being appointed to the position, despite the recruitment policy of the municipality stating that an applicant will be disqualified for dishonesty in their application for a vacancy in the municipality.
To make matters worse, after Mrs. Toto’s appointment, the Director of Corporate Services, Mr Kaap, proceeded to write to the Chief Clerk of the municipality giving an instruction that the salary of Mrs. Toto be increased by over R15 000 despite there being no record of the employee requesting a salary adjustment.
As SAMWU, we are convinced that this pair turned a blind eye on the dishonesty of Mrs Toto so they can continue dispersing patronage and flawing procurement policies in the municipality.
We therefore agree with the findings of the report that the appointment of Mrs. Toto is irregular and unlawful and that disciplinary actions should be taken against both the Municipal Manager and the Director of Corporate Services.
On the way forward and SAMWU demands
These are but a few of the instances of corruption, fraud, maladministration, and nepotism which have been uncovered by the forensic auditors. As SAMWU we are concerned that the municipality is refusing to convene an urgent Council meeting as directed by the MEC of Cooperative Governance, Human Settlements and Traditional Affairs (COHGSTA).
We are further convinced that the Mayor, Municipal Manager and the Director of Corporate Services are in cohorts in hiding the COGHSTA forensic report as they are heavily implicated and as such want to protect each other.
We are also convinced that an urgent Council which the COGHSTA urged the municipality to be convened on the 1st of April 2021 will never be held. A month has now passed, and such a meeting has not been convened because the three are protecting each other.
SAMWU therefore demands the following;
1. That the Provincial Government immediately place the Umsovombu Local Municipality under administration.
2. That criminal charges be laid against the Mayor, Municipal Manager and Director of Corporate Services.
3. That the Mayor, Municipal Manager and the Director of Corporate Services to be place on immediate suspension to allow for the criminal case to be pursued without interreference.
4. That the contract with the security company be immediately terminated as it has failed protect municipal property.
5. That security services of the municipality be insourced, employing people directly and permanently to perform this function.
6. That all the Mayor, Municipal Manager and Director of Corporate services be personally held liable for the irregular and unlawful expenditure that has been incurred by the municipality.
7. That all irregular and unlawful expenditure incurred by the municipality be recouped from the identified persons.
8. That all undue benefits, including unlawful salary increases be recouped from those who benefited unduly benefitted.
9. That the Mayor be invoiced for the cost incurred by the municipality in fixing his personal vehicle.
Issued by SAMWU Northern Cape
(071 889 2023)
Deputy Provincial Secretary
(076 329 8860)
(071 269 1470)