To provide a briefing report to the Select Committee on Local Government and Administration on the intervention by the Executive Council of the Province of KwaZulu-Natal undertaken in terms of Section 139 of the Constitution at the eMadlangeni (Utrecht) municipality and the present status quo in the municipality.


Section 106 (1) (b) of the Municipal Systems Act, provides as follows;­

"- (1) If an MEC has reason to believe that a municipality in the province cannot or does not fulfil a statutory obligation binding on that municipality or that maladministration, fraud, corruption or any other serious malpractice has occurred or is occurring in a municipality in the province, the MEC must-

(b) if the MEC considers it necessary, designate a person or persons to investigate the matter"

Section 139 (1) (b) of the Constitution, provides as follows;­

"When a municipality cannot or does not fulfil an executive obligation in terms of the Constitution or legislation, the relevant provincial executive may intervene by taking the appropriate steps to ensure fulfillment of that obligation, including-.

(b) assuming responsibility for the relevant obligation in that the municipality to the extent necessary to­

(i) maintain essential national standards or meet established minimum standards for the rendering of a service;

(ii) prevent that Municipal Council from taking unreasonable action that is prejudicial to the interests of another municipality or to the province as a whole; or

(iii) maintain economic unity; or"


The reasons for the section 139 (Constitution) intervention have their roots in a section 106 (Municipal Systems Act) intervention instituted by the MEC responsible for local government.

The background to the intervention in terms of section 139 of the Constitution is briefly the following :­

3.1 During September 2006 the Provincial Department of Local Government and Traditional Affairs received various reports of maladministration, fraud, corruption and other serious malpractices in the Utrecht Municipality

3.2 As result of these reports Dr Z L Mkhize (who was acting as MEC at that time) resolved to investigate the reports and complaints received by the department, and appointed a firm of consultants to investigate the allegations.

3.3 The investigation was to ascertain the factual position around the allegations made in respect of:

·         Irregularities in the recruitment process and in particular in the appointment of the Manager: Corporate Services;


·         Irregularities in the allocation of sites of Grootvlei


·         Irregularities in the allocation of housing within Goedehoop Low Cost Housing Development;


·         Irregularities relation to expenditure on Poverty Alleviation funds and Local Economic Development Projects;


·         Possible irregularities in the appointment and payment of Ufezele Management Solutions;


·         Irregularities in the management of Game Park, repairs to lap top, submission of fictitious invoices in order to collect monies from the suppliers, utilization of municipal staff during overtime to carry out private duties;


·         Overpayments on S & T claims for Councillor ME Khoza for 2005/2006 and 2006/2007 financial year;


·         To investigate the creation, establishment, Business Plan, Council resolution and value for money of Groot Hoek Poultry Project;


·         To investigate the creation, establishment, Business Plan, Council resolution and value for money of AIDS Garden Poultry Project.


·         Grant to municipality by Velgedagt Coal Mine;


·         Grant to the municipality by MEC for Local Government and Traditional Affairs and


Any consequential matters that may surface during the investigation

3.4 I had received reports that certain Councillors attempted to frustrate the investigation, and accordingly I applied to the High Court for an order suspending Councillors M E Khoza and B C Mabaso as Councillors pending finalization of the investigation. (Councillor Khoza is the Mayor of the Municipality.) The application was granted by Mr Justice Meleko. The Councillors have however sought leave to appeal against Judge Moleko's decision and that application is still pending.

3.5 On 14 May 2007 the investigators reported on the outcome of their investigation and made the following recommendations :­

3.5.1 that disciplinary action should be taken against certain Councillors (including Khoza and Mabaso) and the Municipal Manager for failing to comply with the municipality's Recruitment, Selection and Appointment Policy;

3.5.2 that disciplinary action should be taken against the Municipal Manager and Councillor Khoza for irregularities in the allocation of sites;

3.5.3 that disciplinary action should be taken against Messrs Zungu and Mtshali for unauthorized allocations in the Goederhoop Low Cost Housing Development.

3.5.4 that disciplinary action should be taken against Messrs Zungu and Ndlovu for irregularities in the expenditure of Poverty Alleviation Funds and local economic development projects, and that the Municipal Manager and other officials be charged with financial misconduct;

3.5.5 that the Municipal Manager and Chief Financial Officer should be held liable for unauthorized expenditure and charged with financial misconduct relating to the employment of consultants;

3.5.6 that a criminal case of fraud and theft should be registered against Mr R Stannard and that charges of misconduct should be brought against a council employee with regard to irregularities relating to the council game park;

3.5.7 that disciplinary action and criminal charges should be brought against Councillor Khoza for wrongful claims for Sand T, and that charges of misconduct be brought against the Municipal Manager as a result.

3.6 As can be seen from the above the report seriously implicates the Mayor (Councillor Khoza, who also acts as Speaker) and four senior council employees, including the Municipal Manager and CFO.

3.6.1 In accordance with normal practice I referred the report to the Utrecht Municipal Council and requested it to report to me within 21 days on the action that the council intended to take as a result thereof.

3.6.2 Despite the fact that the deadline of 21 days expired and more than 3 months had elapsed since the Report was provided to the municipal council, it failed to take any action against those implicated in the report, and no disciplinary action has been instituted against either the Councillor concerned, or the Municipal Manager and other senior council officials.

3.6.3 The Council is under a statutory obligation arising from various pieces of legislation to act if there is unlawful or irregular activity taking place within the councilor the municipality. It has not complied with these regulations.

3.7  Arising from, inter alia:

3.7.1 the       municipal council's failure to discharge its executive obligations and to invoke the required disciplinary procedures as contemplated by the MFMA, the Systems Act and the Code of Conduct;

3.7.2 the municipal council and municipal employees' failure to discharge their obligations to institute disciplinary proceedings against the Councillors or against the municipal employees named in the report (as the case may be);

3.7.3. the delay in taking action;

3.7.4 the fact that the Mayor is alleged to have committed        serious infractions in the report;

3.7.5 the fact that the most senior council employees are named in the report, and

3.7.6 the fact that it was necessary for me to intervene because of earlier allegations of interference with the investigations,

I recommended to the Provincial Executive Council that it should resolve to intervene in the eMadlangeni Municipality in order to ensure fulfillment of the relevant obligations.

3.8 On 22 August 2007 the Provincial Executive Concil resolved to intervene in the eMandlangeni Municipality, as follows :­

3.8.1. The Executive Council appoints a special committee or committees to investigate and make findings of the allegations against the Mayor Councillor Khoza and any other Councillor arising from the Special Investigation Report into Allegaions of Mismanagement, Maladministration, Fraud and Corruption at Utrecht Municipality, dated 14 May 2007 ("the Special Investigation Report") and on breaches of the Code of Conduct for Councilors arising therefrom as contemplated in item 14(a)(b)(i) of the Code;

3.8.2. The Executive Council appoints a special committee or committees to investigate and make findings on the allegations against municipal employees arising from the Special Investigation Report and on breaches of the Code of Conduct for Municipal Staff Members and all applicable legislation arising there from, as contemplated in item 1 of the Code of Conduct for Municipal Staff members, read with section 67(1)(h) of the Local Government: Municipal Systems Act, 32 of 2000, and the Disciplinary Procedure Collective Agreement (if applicable);

3.8.3. That I be authorized to appoint the relevant special committee or committees for the proposes of conducting the investigations and making the findings contemplated above;

3.8.4. That the Executive Council directs that the special committee or committees appointed by me make recommendations to the Executive Council on the appropriate sanctions to be imposed on the Councillors and municipal employees who are found to have committed a breach of the applicable code or committed a disciplinary offence;

3.8.5 That the Mayor Councillor M E Khoza, the Municipal Manager 01 M Kubeka) and municipal employee B Zungu be suspended pending the outcome of the procedures contemplated above.

3.8.6 That I be directed to appoint an Acting Municipal Manager to act on behalf of the Municipal Manger pending the outcome of the procedures contemplated above.


4.1 The following actions have been taken in accordance with the resolution of the Provincial Executive Council :­

·         The NCOP has been notified of the intervention in the eMadlangeni Municipality in terms of Section 139 of the Constitution - annexure A


·         The Minister for Provincial and Local Government has been informed of the intervention in the eMadlangeni Municipality in terms of Section 139 of the Constitution - Annexure B


·         Letters of suspension from office have been served on the Mayor and Municipal Manager of the Municipality - Annexure C1-C3


·         A special committee, comprising of Advocate M Mkhize, and Attorney E Ngubane has been appointed to investigate and make findings on the allegations against those implicated


·         An acting Municipal Manager has been appointed, provided with comprehensive terms of reference and has assumed duty - Annexure D


·         The suspension of the Speaker /Mayor results in the council's decision making process being compromised. It is therefore necessary for the council to elect an Acting Speaker/Mayor in terms of section 41, read with section 36 (3) of the Municipal Structures Act.


4.2 The Minister designated the General Manager: Local Government to conduct such election - see copy of designation attached as Annexure "E". eMadlangeni has 7 councillors, including Councillor Khoza, who is suspended. The election of an Acting Speaker, (Mayor) was delayed on two occasions by 3 councillors removing themselves from the meetings. Arising from the equality of votes, a further three meetings were required

to formally elect an Acting Speaker, by lot, in terms of item, 8 (3) of . Schedule 3 to the Municipal Structures Act - Copy of minutes attached and Annexure F


The Acting Municipal Manager has, in accordance with his terms of reference, provided a comprehensive report on the practical operations of the municipality, dated 18 October 2007. The report details:­

·         Numerous cases of maladministration related to Human Resource matters, including incorrect calculations of leave, incorrect salaries paid, overpayment of salaries and the possibility of ghost employees, have been identified.


·         Non-compliance with many of the provisions of the Municipal Finance Management Act (MFMA) abound.


·         There are institutional, organisational and capacity constraints which are impacting negatively on the municipal administration.


·         The municipality failed to submit financial statements in terms of section 126 of the Municipal Finance Management Act. This has subsequently been rectified.


·         The Provincial Management Assistance Programme is in the process of compiling a recovery plan to address the administrative shortcomings.


·         The council has seven councillors, of which one is vacant, which means that this council presently comprises of 3 x ANC, 2 x IFP and 1 DA councillors. Decision making is now being compromised by "frustration" politics as the 2 minority parities regularly "walk out" leaving the council without a quorum. This means that, on occasion, decisions cannot be taken and service delivery is compromised. Should this situation continue the KwaZulu-Natal Executive Council may have to consider a section 139(1)(c) intervention as the council is dysfunctional, at times.