12 February 2013

South Africa: Committee Hopeful About Progress in Nala Municipality

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Despite some minor glitches, the Select Committee on Cooperative Governance has noted some improvement in Nala municipality in the Free State.

"Based on the update we received today, we can certainly see that the municipality is moving in the right direction. This is not to say that we are oblivious to the prevailing challenges. We remain optimistic that, with time, the municipality will get its house in order," said the Chairperson of the Committee, Mr Humphrey Mokgobi.

The Free State Department of Cooperative Governance and Traditional Affairs (CoGTA) gave the Committee a progress update today (12 February) on how the municipality was addressing the findings of a KPMG forensic investigation and subsequent investigations.

The forensic audit of Nala started in 2010 following the municipality's failure to finalise and submit its 2009/10 and 2010/11 annual financial statements. The municipality also faced allegations of fraud and corruption as well as irregular and unauthorised expenditure. The municipality has used conditional grants over the years to finance its operating costs.

The Head of Department of Free State CoGTA, Mr Kopung Ralikontsane, told the Committee that all those implicated in fraud and corruption in the municipality had been fired and cases opened with the SAPS and Hawks.

Mr Ralikontsane added that plans were in place to recover all the money embezzled from the municipality by officials and "bogus" contractors. He was also hopeful that the municipality would be able to meet the deadline for submission of its financial statements now that a Municipal Manager and a Chief Financial Officer have been appointed.

A sign that Nala municipality is making progress was demonstrated recently when the National Treasury recommended that the Minister of Finance withdraw its implementation of Section 216 (2) of the Constitution, which saw the Treasury stopping the transfer of the municipality's remaining share of the 2012/13 Equitable Share and conditional grants allocation.

The Treasury invoked this Section in September last year on the basis that the municipality was unable to run its affairs and was failing to implement the findings of the KPMG forensic audit report.

The newly appointed Executive Mayor of Nala local municipality, Mr Theko Mogoje, attested to progress in his municipality. Mr Magoje acknowledged that challenges still exist, but said that with the assistance of the community and security agencies, shortcomings would be addressed.

Committee members called on the municipality to expedite the turnaround strategy in order to ensure that the provision of quality services to the people of Nala was not compromised. The Committee also undertook to visit the municipality to ensure that what was reported today was a true reflection of the situation.

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