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President Cyril Ramaphosa signed the long-awaited Municipal Systems Amendment Act (MSAA) into law on 19 August – an important legislative change in the administrative management of local government. The Act seeks to regularise the appointment and performance of municipal managers and the decision-makers around them to ensure cleaner local administrations.
But while political agendas and coalition power tiffs ripple through the country’s metro municipalities during this period, it will probably take some time before smaller municipalities in rural and semi-rural areas see the long-term effects of the MSAA.
Residents bear the brunt
Moretele Local Municipality in the North West is one example where residents’ suffering has been worsened under the degree of mismanagement alleged to have been overseen by its former municipal manager, Roger Nkhumise. He faces fraud and corruption charges in the Makapanstad Magistrates Court, and is accused of contravening the Public Finances Management Act (PFMA) in a 2016 ICT services contract entered into with a company that did not undergo a competitive bidding process. What allegedly happened instead was that Section 32 of the National Treasury Municipal Supply Chain Management Regulations was used to justify the procurement – at a cost of R215-million over three years – from Flame IT.
A clause in the section allows municipal entities to deviate from normal PFMA open tendering processes procure goods and services from a sole supplier, on the basis that the same supplier has been successfully contracted by another public entity. Flame IT was previously contracted by Madibeng Local Municipality. A further requirement is that the deviation must be warranted by emergency circumstances, where an open tender route would not be ideal.
From what Corruption Watch (CW) discovered during an investigation into the procurement process, the infrastructure built by Flame IT in various parts of the community did not warrant an emergency procurement – more on that later.
Political interference and protection
In principle, the MSAA advocates for the insulation of municipal managers, and those who report directly to them, from political meddling through which governance standards are compromised for the benefit of a few. It further dictates that municipal managers be subjected to performance evaluations and provides for the minister of Cooperative Governance and Traditional Affairs (Cogta) to make regulations relating to the duties, remuneration, benefits and other terms and conditions of employment of municipal managers and managers directly accountable to them.
Let’s take again the example of Nkhumise, who is no stranger to controversy, or allegations of irregularities, having faced a similar fate in 2020 after redeployment to neighbouring Matlosana Local Municipality soon after his approval of the Flame IT contract. There he was allegedly being investigated by council – responding to pressure from residents – for not disclosing a criminal record relating to a tax crime when, as the Mail & Guardian reported at the time, an alleged intervention was undertaken by ANC NEC member and deputy minister of human settlements, David Mahlobo, to prevent a situation where Nkhumise would face sanctions.
The newspaper alleges that Mahlobo met with several councillors of the ANC, at which meeting he aimed to persuade them not to suspend Nkhumise. The latter has since left Matlosana after his contract was not renewed earlier this year.
It is in relation to scenarios like this that the MSAA has been met with some scepticism. If indeed the incident reported on by the M&G did take place, involving a member of Cabinet canvassing his comrades during a period when such a law was in progress, awaiting only Ramaphosa’s signature, then who is to say it would not happen after the MSAA comes into effect?
When CW visited, in 2019, the sites of the ICT towers erected across the villages of Mathibestad by Flame IT, it was met with sub-standard quality of work, neglected project sites, and uncertainty from residents interviewed on the exact purpose of the towers. While some said they were told more information would be forthcoming, others said they were told residents would soon have access to Wifi services from their homes.
One security guard manning the guard house next to one of the towers told CW that they were unsure of their job security and physical safety, because the condition of the untidy grounds around the facility could send the wrong message to criminals that they could easily vandalise the property.
“If they come, I will run, because I’m not armed. My only job is to secure this place, but criminals watching it every day might get ideas,” said the guard.
On a more worrying note, the whistle-blower who approached CW on the Moretele matter cited what he perceived as political interference in the Hawks’ criminal investigation into the Flame IT contract.
Local Government Anti-Corruption Forum
Hot on the heels of the promulgation of the MSAA was the official launch by Cogta, on 19 September, of the Local Government Anti-Corruption Forum. Through this body, whose formation has been a behind-the-scenes process for about two years, Cogta aims to “foster collaboration and coordination amongst the various stakeholders at the local government level on anti-corruption matters.” Among the “stakeholders” are civil society organisations such as CW, which has a vested interest in tightening the screws for local government authorities to ensure better governance and efficient service delivery.
CW’s stance is that in reality, municipalities do not become “rotten apples” overnight. Like all other state organs that are monitored annually by the Auditor-General, they have ample opportunity to clean up their act and secure favourable findings, but it takes more than just a piece of legislation to do so. The MSAA may not apply retrospectively to existing municipal manager roles – and thus may not reverse the possible irregularities that are most likely stunting the delivery of much-needed services across the country’s 278 municipalities – but it attempts to gradually regularise a sector beset with corruption that stems from the entitlement of politicians.
The Auditor-General has consistently lamented the blatant disregard for procurement laws in municipalities, many of which are flagged with adverse findings, racking up hundreds of millions in irregular expenditure. The tide may turn gradually with the MSAA now in place, as it bars municipal managers from holding office in political parties. It however does not cater for interference that may come in the form that is reported by the M&G, in which a national executive committee member of the ANC may interfere in an investigation of a municipal manager by his superiors.
