Emfuleni municipality rocked by fresh corruption allegations

The chief financial officer (CFO) of Gauteng’s embattled Emfuleni Local Municipality has been suspended days after he blew the whistle on allegations of corruption.

This relates to the awarding of a R57 million contract.

The CFO, Andile Dyakala, was placed on suspension last Wednesday during a special council sitting following a report by municipal manager Lucky Leseane.

ALSO READ: R670m irregular expenditure uncovered at Emfuleni municipality

The report contained allegations of misconduct, financial misconduct, irregular and wasteful expenditure against Dyakala.

His suspension comes barely a week after he had written to the auditor-general’s office alleging corruption against Leseana, and requesting that an investigation be instituted into his role in the awarding if the municipality’s R57-million insurance brokerage contract.

‘Dodgy’ R1.6-million monthly broker fee

In the letter – dated 8 March – addressed to the auditor-general’s Gauteng senior manager, Nerosen Venketsamy, Dyakala detailed how the awarding of the contract, with a monthly broker fee of R1.6-million, was fraudulent, reeked of bribery and corruption.

“This broker fee is alleged corruption, fraud and a possible material irregularity and must be investigated,” the CFO wrote to Venketsamy. 

He explained that on 24 December 2021, the bid evaluation committee considered the tender for recommendation to the accounting officer for the appointment of a service provider for short-term insurance.

READ MORE: Emfuleni dysfunctional with little ‘evidence of improvement’

Dyakala, however, said the validity period for the tender was extended, but this was rejected by two bidders, which he said declared the tender non-existent, and needed to be cancelled and re-advertised.

The CFO further stated in the letter, which The Citizen has seen, that the municipal manager “forced” the adjudicating committee to adjudicate the tender though it had expired.

“I dully advised [Leseane] that the tender has expired and thus must be cancelled and re-advertised. I indicated to [Leseane] by forcing the BAC to adjudicate the tender was tantamount to advocating maladministration and corruption in the municipality,” he said.

Tender declared unlawful

Last month, the Johannesburg High Court declared the tender invalid, unlawful and set it aside, with the municipality ordered to embark on a fresh process in four months.

The tender was allowed to continue in the meantime as stopping the contract would leave the municipality without insurance.

Dyakala has lamented that the introduction of the broker fee, on top of the R2.1-million monthly premium, pushed the figure to over R3.7-million per month.

This will cost the municipality R57.6-million in three years.

ALSO READ: Emfuleni: Will voters punish ANC for SA’s worst-run municipality?

Also of concern to the CFO was the introduction of the R25,300 aggregate deductible never recommended by both the bid evaluation and adjudicating committees.

Emfuleni had resolved to move away from aggregate cover as the municipality had funds.

Repeated attempts to reach Dyakala and Leseana for comment have been unsuccessful, but municipal spokesperson Makhosoke Sangweni said they were aware of the letter and the CFO’s suspension.

Precautionary suspension was necessary

Sangweni said the council has received a report on allegations of misconduct, financial misconduct, irregular and wasteful expenditure against the Dyakala from Leseana that he said necessitated the municipality to effect a precautionary suspension against the CFO.

He did not give details of these allegations only that the decision was taken to allow for a fair investigation into the matter.

READ MORE: Rubbish piles in Emfuleni as waste trucks held ‘hostage’

“It must be noted that the council meeting of the 28 February 2022 had issued a notice to [Dyakala] to give reasons why he should not be suspended based on the preliminary reports received against him,” Sangweni said.

On the other end, Sangweni said executive mayor Sipho Radebe has written to Leseana asking him to respond Dyakala’s allegations raised in the letter to the auditor-general.

He said Leseana was given 14 days to respond to these allegations and that the municipality, currently under administration, was still looking into allegations raised by the CFO in the letter.