Statement by eThekwini Mayor James Nxumalo on Council resolutions on the Manase Report, February 29 2012
29 February 2012
On the 7th of February 2012, the MEC for Cooperative Governance and Traditional Affairs, Honourable Nomusa Dube tabled to a special full Council meeting the report on the findings and recommendations of the forensic investigations into allegations of fraud, corruption and maladministration in the eThekwini Municipality. The investigation was instituted by the Department in terms of Section 106 (1) (b) of the Municipal Systems Act 2000. The MEC gave the Municipality 21 days to respond to the report and indicate how Council intends dealing with this matter.
Council then mandated the Executive Committee (EXCO) to study the report and develop an approach on how the various issues raised would be responded to. As such EXCO has discussed and debated the report and the last meeting took place yesterday evening.
The EXCO report and recommendations were tabled at the full Council meeting this morning. Council resolved as follows in relation to the specific issues raised by the report:
1. Solid Waste reduction
1.1 It was resolved that the award of the contract to EWS be set aside;
1.2 The issue of the former Mayor be referred to the Speaker;
1.3 Independent legal opinion be sought on the issue of the former Mayor's request for an audience with EXCO/Council and whether the conduct of the former Mayor and officials unlawfully influenced the tender process. This owing to the fact that we have no jurisdiction over the former Mayor
2. Irregular expenditure
2.1 A comprehensive forensic investigation with powers of subpoena be conducted in respect of each of the contracts mentioned in the Report;
2.2 The officials implicated in irregular expenditure be charged with misconduct;
2.3 eThekwini Municipality Legal Services be instructed to investigate and take steps to recover irregular expenditure;
2.4 Municipal Manager be instructed to put in place effective control measures to prevent further irregular, unauthorised and wasteful expenditure;
2.5 Municipal Manager be instructed to report the matter to the South African Police Service in terms of Section 34 of the Prevention of Organised Crime Act (POCA) and Section 32 of the Municipal Finance Management Act (MFMA).
3. Mariannridge & Chatsworth Projects
3.1 That the officials implicated in the Report be charged with misconduct.
3.2 That Legal Services be instructed to investigate and take steps to recover irregular expenditure by civil process;
3.3 That further investigation be conducted into these contracts by a body with powers of subpoena.
4. Crossmoor, Bayview & Chatsworth Projects
4.1 That the officials implicated in the report be charged with misconduct.
4.2 The Municipal Manager be directed to investigate which other officials should be charged with misconduct.
4.3 That further investigation into these contracts be conducted by a body vested with powers of subpoena.
5 Contravention of Section 32 of the Prevention of Organised Crime Act (POCA)
5.1 The Municipal Manager has been instructed to report in terms of Section 34 of POCA.
5.2 eThekwini's Legal Services has been instructed to investigate and take whatever steps are necessary to recover the R1,1 million which according to the Report should have been recovered.
6 Westridge, Burbreeze & Hammonds Farm
6.1 The officials implicated in the Report be charged with misconduct.
6.2 That a legal opinion be obtained on how to deal with the contractors who are still on site, including, but not limited to, suspension of the contracts.
6.3 Municipal Manager be directed to investigate further contracts that were awarded after the commencement of the Manase investigation
7 Conflict of interest
7.1 That the portion of the Report dealing with officials be referred to the Municipal Manager to deal with in terms of applicable prescripts and report to Council.
7.2 That the portion of the Report dealing with Councillors be referred to the Speaker to deal with in terms of the Code of Conduct for Councillors.
7.3 That the Municipal Manager be instructed to take urgent steps to prevent a recurrence of this practice, including the de-registration of the affected companies from the eThekwini Municipality's database and black-listing by National Treasury.
8. Payment Analysis
8.1 The ETM Internal Audit be directed to investigate these payments and report to MM on their findings within 3 months. If necessary, enlist outside assistance
9. H2O Networks
9.1 The officials implicated of wrongdoing in the Report in respect of the H2O contracts be disciplined
9.2 Legal opinion be sought on the options available to the Municipality in respect of its relationship withH2O;
9.3 An independent investigation be conducted into all the companies linked to the fibre optic project;
9.4 Municipal Manager be directed to comply with Section 34 of POCA ;
9.5 Municipal Manager be instructed to investigate and pursue civil recovery of irregular expenditure
9.6 Municipal Manager be directed to investigate what steps can be taken against former officials who did not observe the cooling-off period
10. Dimension Data
That the allegation relating to Dimension Data be dealt with in terms of recommendation no 9 above
11. Revenue Management System (RMS)
11.1 That this matter be investigated by a body with powers of subpoena;
11.2 The Municipal Manager be directed to investigate what can be salvaged from this project;
11.3 The MM be directed to investigate the maintenance contract, in respect of which advance payments have been made;
11.4 The MM be directed to investigate the operational expenditure linked to this project. The investigation should include the role of Smart Xchange in the project;
11.6 The MM be directed to appoint an independent forensic IT specialist to assist with this investigation;
11.7 The MM be directed to investigate the skills of the officials in the Unit,
11.8 The MM be requested to urgently investigate the options available to the Municipality for the rationalisation of IT services
12. Overtime and irregular expenditure
12.1 The matter be referred to the MM to take the necessary disciplinary steps and report to Council;
13. Early Morning Market
13.1 That this matter be referred to the MM to investigate urgent measures which can be implemented to mitigate the health and safety conditions of the market and to report thereon to Council
14. Payment and contracts of Senior managers
14.1 The payment of the scarce skills allowance to senior managers be stopped with immediate effect, subject to legal advice;
14.2 The MM be directed to develop a policy in this regard;
14.3 The contracts of senior managers which have terminated be extended on a month to month basis, pending the rationalisation process which must be completed within 3 months
15. Other matters
15.1 The matters relating to Metro Connect, Citi Works and the allegations that the wife of the former Mayor is involved with Isidingo Security be closed;
15.2 The allegations concerning the rental and sale of RDP houses be left for investigation by the SIU
16. Metro Police
16.1 The MM be directed to investigate disciplinary action against the Metro Police Officers and other personnel implicated in the report;
16.2 That the MM be directed to review the employment of constables implicated
In driver licence fraud;
16.3 That MM be directed to investigate and discipline Metro Police Officers
conducting taxi businesses;
16.4 A full investigation into the other matters not investigated by Manase be conducted.
17 General
17.1 It was further resolved that the Premier of KZN be requested to set up a Commission of enquiry into the allegations identified in this report for such investigation (Housing projects and RMS);
17.2 That the MM, in consultation with EXCO, be authorised to negotiate the terms of reference of such a Commission;
17.3 A report be brought to Council within 3 months on progress made on all these matters.
17.4 With regard to the discipline of Senior Managers, that an independent investigator be appointed to investigate and report within 30 days on the charges that can be brought against the Senior Managers implicated in the report, in terms of the Regulations for Discipline of Senior Managers;
17.5 The MM be authorised to take whatever steps may be necessary in terms of
the Regulations and other prescripts to implement the decision of this Council to discipline the SeniorManagers implicated in the Report.
17.6 The relevant sections of the report be provided to the Councillors and/or
Officials implicated thereby, and
17.7 EXCO be authorised to seek legal opinion and manage the process of releasing the report.
STREET RENAMING
On a separate matter (which is not related to the Manase report), we are happy that the issue of the renaming of the nine streets in the City Centre has been finalised. Today Council unanimously adopted the retention of the names of the nine streets of which the Supreme Court of Appeals had found that proper procedures had not been followed in their renaming. The Municipality has since engaged in extensive consultation process to correct this. The Municipality received over 8 500 submissions, the majority of which were in support of these names being retained. The process was transparent and was conducted with integrity. We are happy that this process has been finalised.
Ends
Section 32 of the MFMA:
"(6) The accounting officer must report to the South African Police Service all cases of alleged -
(a) Irregular expenditure that constitute a criminal offence; and
(b) Theft and fraud that occurred in the municipality
(7) The Council of a municipality must take all reasonable steps to ensure that all cases referred to in subsection (6) are reported to the South African Police Service if -
(a) the charge is against the accounting officer; or
(b) the accounting officer fails to comply with that subsection."
Issued by the eThekwini Municipality, February 29 2012
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