Dacre Haddon, MPL
Shadow MEC for Local Government
A motion by the DA to suspend the mayor of Lukhanji was successful today following a damning AG report which found that the financial statements of the municipality were “indicative of significant fraud”.
The most serious comment in the report is in paragraph 38 where the AG states:
“The numerous misstatements identified in the financial statements are indicative of significant fraud, which calls into question the reliability of the evidence obtained and genuiness of accounting records and documentation. But for the legislative requirement to perform an audit of the municipality, I would have withdrawn from engagement in terms of ISAS”.
It is clear that rampant corruption and fiduciary negligence has caused the chaos in this municipality.
Amongst some of the issues highlighted by the AG are electricity losses of 42%.
The municipality has lied about having cash reserves of R73, 3 million when the bank statements reveal an amount of R33, 9 million. Where is the missing R39, 4 million?
Furthermore, amounts of R4, 8 million and R8, 1 million grant funding is missing.
Other concerns raised in the report are understatement of irregular expenditure, lack of effective supply chain and contract management systems and inadequate integrated development planning.
The DA-motion, which was drafted in collaboration with my colleague in Lukhanji, Councillor Chris De Wet, also seeks an immediate forensic audit into the fiduciary affairs of this municipality.
While the motion to have the mayor, under whose watch this catastrophic shocker took place was successful, a debate on the report itself has been deferred to the next council meeting.
The appalling state of affairs in Lukhanji and other municipalities continues to enforce the perception that local governance in the Eastern Cape enjoys basket case-status.
With such on-going perceptions doing the rounds it is no wonder that unemployment and lack of sustained investor confidence prevail in this province.
It is situations like this where missing grant funding or stolen money needed for service delivery causes communities in municipalities throughout the county to go berserk and riot as we saw in Sasolburg and Sterkspruit recently.
It is time for radical action!
The on-going lethargy by the MEC for Local Government, Mlibo Qoboshiyane, not to take vigorous and severe corrective action against individuals implicated in financial misconduct is of serious concern.
I have written to the MEC asking him to investigate and consider invoking section 139 of the Constitution for provincial intervention.
I have also written to the chairperson of the portfolio committee on Local Government and Traditional Affairs in the provincial legislature requesting that the MEC address the committee as a matter of urgency in this regard.