ActionSA to Approach Auditor-General for Probe into Matjhabeng Municipality’s Abysmal Financial Position

ActionSA requests Auditor-General (A-G), Tsakani Maluleke, to further investigate Matjhabeng Municipality’s leadership, governance, financial and performance management in terms of sections 4(1) and (3) of the Public Audit Act (PAA).

This is after ActionSA’s bid to get the Free State CoGTA MEC, Ketso Makume, to invoke section 139(5) of the Constitution against Matjhabeng, was met with disdain.

This municipality is marred by financial maladministration, corruption, mismanagement and is on the brink of complete financial ruin. The outcome of which will adversely affect real South Africans who rely on this municipality for the very basics to exist.

According to the A-G’s latest financial management report for Matjhabeng Municipality, the state of the Municipality is in desperate need of intervention. The A-G raised concerns about the municipality’s debt exceeding its assets by R8.4 billion and highlighted that it has also incurred a deficit of R1 billion.

On 01 October 2023, the National Council of Provinces (NCOP) wrote to Free State Premier, Mxolisi Dukwana, requesting him to immediately intervene in terms of section 139 (5) of the Constitution by taking over the finances of the municipality through a competent and qualified individual who can oversee the financial turnaround of the municipality in the interest of residents. To date nothing has been done to reverse this impending crisis.

Allegations abound that the Mayor refused to pay three service providers a total of R88 million for services rendered, allegedly demanding a kickback of R4 million from each company.

Furthermore, it is alleged that the Mayor instructed the Chief Financial Officer (CFO), Thabo Panyani, to withhold payment until the companies had complied with his wildly unlawful demand.

At an NCOP presentation, the Mayor communicated that Matjhabeng has spent R2.8 billion on service providers over the last five years, which amounts to a total of R45 million per month.

ActionSA requests that A-G to investigate the following allegations:

  • Allegations that the Mayor is soliciting funds from service providers.
  • Using the municipality’s service provider to build his personal house for R3.4 million.
  • Hiring the service provider’s daughter in his office.
  • How was the service provider appointed, did the service provider follow the appropriate channels for it to be appointed?
  • Reasons for the Welkom’s Sheriff to attach 24 vehicles from the municipality’s yellow fleet valued at R41 million.
  • Allegations that the municipality recently acquired ten second-hand trucks for R32 million and in doing so contravening government’s rules.
  • He allegedly forced Municipal Manager, Adv. Lonwabo Ngoqo, to unlawfully appoint unqualified individuals to executive positions.
  • Alleged misuse of Free State Government Garage’s pool car during ANC Conference.
  • Alleged misuse of municipal funds for municipal employee’s attendance at the ANC’s Policy Conference in July 2022.
  • The exorbitant increase in his office budget from R8 million to R250 million.
  • Furnish Fleet Officer’s qualifications that qualified her to be appointed to this position.
  • Explain the alleged appointment of Traffic Management and Law Enforcement Officer without the required qualifications.
  • Allegations that he is forcing municipal employees to perform ANC duties using the municipality’s resources.

Matjhabeng exemplifies a case of a failing municipality which is the reason why ActionSA will not stand idly by.

We are resolute in our fight against corruption and maladministration. We believe that our public institutions should exist solely to fulfil the state’s development mandate by delivering services with pride to South Africans.

It is against this backdrop that ActionSA requests the Auditor-General to investigate the aforementioned allegations with the requisite haste.