The Umzinyathi district municipality, which was in the news after running out of money to pay staff salaries on time last month and was recently forced to reverse an unfunded budget, paid out R5,7-million for water projects that were never undertaken.
The municipality, run by the Inkatha Freedom Party (IFP) is anchored in Dundee (Endumeni) in north-western KwaZulu-Natal.
It is made up of Endumeni, Umvoti (Greytown), Msinga and Nquthu local municipalities, where it is tasked with water and sewerage services.
Forensic report
According to a report that was compiled and tabled to the council last month by Garnet Ngubane and Partners Inc, the municipality, starting from 2020, had a dubious relationship with a company identified as Bosch Projects.
The company was tasked with the compilation of an operations and maintenance plan for wastewater treatment facilities. Also for pump stations, borehole and water schemes and network, which include Mbono Bulk Water Project in Msinga.
The forensic report details how Umzinyathi officials made irregular payments and failed to properly instruct lawyers to defend lawsuits by Bosch Projects and had to pay millions as a result of undefended lawsuits.
Paid lawyers who failed to defend Umzinyathi municipality
“Default judgment was granted against Umzinyathi Municipality, to which a rescission application filed in respect thereof was also unsuccessful. And as such Umzinyathi was under obligation to pay as per the court order.
“We reviewed two termination letters issued by Umzinyathi Municipality against its legal representatives. These being Maseko Mbatha Incorporated and CS Zondi for unsatisfactory services. Maseko Mbatha failed to defend the matter, which led to default judgment against the municipality.
“We reviewed a warrant of executions against the Municipality’s movable assets to satisfy the debt owed as per the court order. The municipality was ordered to pay Bosch R 2,915 943.46 including legal fees. This plus bill of cost of R83, 501.82,” reads part of the report.
The report recommended that some officials like Sabelo Nhlebela, former contracts manager, former Municipal Manager, LH Mthembu and others be charged. Others should have their pensions withheld and money recouped.
Charge all implicated officials
“Mr Nhlebela must be charged for gross negligence in carrying out duties as he failed to manage the entire contract lifecycle, including executing and ensuring compliance of the contract. This while minimising risks and maximising the value of the municipality. This resulted in a fruitless and wasteful expenditure of R2, 550 263.09.
“Civil action must be instituted against Mr Mthembu for authorising payment to an amount of R5, 798 502.08. This was for services that were never rendered. The forensic investigation into Bosch projects found that Mr [Germany] Ndlozi (former operations manager) was a key player and willing participant to defraud the municipality through wasteful and fruitless expenditure.
“Mr Ndlozi has since resigned from the municipality. A letter to interdict his pension was sent to the relevant officials. This was to try and recover the R2, 550 263.09. Therefore, charge Mr Ndlozi civil and criminally,” reads part of the recommendations.
Recoup the monies paid to contractor
It also recommended that the R5.7-million that was paid to Bosch be recovered. And all this should be done as soon as possible.
“Bosch Projects – recover monies owed to the municipality R5, 798 502.08. Claim for unjustified enrichment, claim for fraudulent misrepresentation litigation is required
It also recommended that there should be review of all senior managers’ job descriptions. Also review of the policies and procedures, to ensure transparency and accountability.
“Tighten policies to ensure [you] minimise wasteful and fruitless expenditure.”
The municipality undertook to comment on the matter, but failed to do so.
