VBS debacle expected to rear its head as Gauteng municipalities called to account

Gauteng municipalities, including the two involved in illegal investments in the collapsed VBS Mutual Bank, are expected to update the National Council of Provinces (NCOP) regarding the state of their finances this week.

This will take place in the Gauteng Legislature today as part of the NCOP’s nationwide oversight visits this week in a flagship programme called Provincial Week. The programme, Building Sustainable, Responsive and People-centred Municipalities, will start in Gauteng, with other provinces to follow.

In these sessions, according to a statement, delegates and members of provincial legislatures are expected to interact directly with the public on service delivery issues, such as the housing backlog, water infrastructure maintenance and waste collection.

The contentious VBS matter, in which municipalities were allegedly involved in a kickback scheme with the bank, is not officially on the agenda but according to parliamentary spokesperson Malatswa Molepo, the issue is bound to come up when chief financial officers (CFOs) are called to account.

“In Gauteng, for example, we are focusing on Sedibeng and Tshwane, but in all provinces where they are dealing with municipalities involved with VBS, I am sure the issue will come out,” said Molepo.

“The chief financial officers are expected to talk about the financial viability of municipalities so, if you talk of finances of municipalities, those that invested in VBS the issue will obviously come up.”

Last month, two reports by auditing firm Delloite, on investigations into West Rand district municipality and Merafong City, were made available to the public. The two municipalities invested R661 million and R50 million into the bank respectively.

For the West Rand district municipality, findings made by Delloite suggested there was reasonable suspicion that private transactions made by at least three officials were actually kickbacks for securing the hefty sums.

The Democratic Alliance later called for Gauteng officials implicated in forensic reports on the matter to be blocked from hopping jobs while the recommended police investigations into them were pending. This was after it learned that a former municipal CFO from the North West, implicated in the scandal, reappeared as a municipal manager in Limpopo, where eight municipalities were implicated.

Delegates are expected to meet Gauteng Premier David Makhura, MECs, executive mayors, ward councillors and representatives from the South African Local Government Association (Salga) for updates on the state of Gauteng municipalities, and to find solutions to their challenges.

The MECs of cooperative governance and traditional affairs, economic development and finance were expected to focus on delivery of basic services – water, sanitation and electricity – and the viability of municipalities, local economic development and the financial state of municipalities, including compliance with legislation and spending on various grants.

– simnikiweh@citizen.co.za

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