NCOP approves government intervention at Umkhanyakude
The National Council of Provinces has approved the intervention by the KwaZulu-Natal provincial government to place the uMkhanyakude district municipality under administration from February.
It was the second time in just over five years that the municipality has been put under administration.
Ahead of the adoption of a report of the council's select committee on co-operative governance and traditional affairs, committee chairperson China Dodovu outlined a history of political instability, non—compliance with the code of conduct by councillors, lack of service delivery, failure to convene council meetings and failing to pass the budget last year.
Dodovu said the municipality was placed under administration after the KwaZulu-Natal provincial government decided to intervene using Section 139(1)(b) of the constitution in October 2015. The decision followed years of the municipality limping from one problem to another, said Dodovu.
The problems had been indicated by persistent governance, financial and service delivery challenges that the municipality had been unable to resolve, despite provincial and national government support, he said.
When the municipality made progress in all key performance areas, the provincial government intervention was terminated in November 2017.
Dodovu said despite measures by Cogta to support the municipality in terms of section 154 of the constitution, it regressed to dysfunctionality due to “chronic internal” divisions among other reasons.
“There was frequent and persistent breakdown of council meetings due to internal divisions within council,” he said.
This was triggered by the suspension of the CFO [CFO] by the accounting officer in February 2020, and again in March 2020, due to alleged maladministration, fraud and corruption.
This was followed by allegations and counter-allegations of maladministration, fraud and corruption by the mayor against the accounting officer, after the appointment of three security service providers in November 2019.
The tension escalated and resulted in the council failing to pass the IDP and budget due to internal divisions in May 2020.
“Hence the current state of dysfunctionality calls for the re-invoking of section 139(1)(b) of the constitution, to restore some aspect of institutional stability, sound financial management and effective service delivery,” said Dodovu.
The cash flow situation in the municipality deteriorated over the past two financial years, he said.
“Though management had developed a cash flow plan, there is no commitment and urgency to take decisions that are critical to the sustainability of the institution,” said Dodovu.
He said Umkhanyakude municipality did not have sufficient cash to meet its current or short-term obligations such as payments to creditors.
In terms of the internal control environment, several indicators showed that it remains weak.
“The managers persistently fail to implement policies and procedures of the municipality, leading to the ballooning of unauthorised, irregular, fruitless and wasteful expenditure, expenditure now at R2.7bn.
“This points to a complete disregard of supply chain management policy framework and procedures,” said Dodovu.
On service delivery, Dodovu said about 40% or 60,483 of the households under Umkhanyakude did not have a reliable source of water, due to poor operations and maintenance, and water resource and infrastructural challenges.
On the basis of these “serious challenges” prevailing at the municipality, the provincial executive resolved to intervene in February 2021 by assuming some of the municipality's functions including those related to financial management.