The Democratic Alliance (DA) in Limpopo is adamant that steps should be taken against treasury staff and mayors of municipalities in the province that are implicated in the investment of more than 1,1 billion with VBS Mutual Bank (VBS).
In a media release, DA provincial leader and spokesperson on Cooperative Governance, Human Settlements and Traditional Affairs (Coghsta), Jacques Smalle said that the DA in Limpopo wrote to Provincial Treasury MEC, Rob Tooley, and Coghsta MEC Jerry Ndou last Tuesday calling on them to institute disciplinary measures against treasury staff and mayors implicated in authorising investments with VBS.
“Deposits made by the affected municipalities contravened section 7(3)(b) of the Municipal Financial Management Act (MFMA) which states that a municipality may not open a bank account with an institution not registered as a bank in terms of the Banks Act 94 of 1990,” Smalle said.
Smalle said a reply in the National Assembly during March revealed that Makhado, Greater Giyani and Collins Chabane municipalities respectively invested R61,6 million, R159,2 million and R121,8 million, while Ephraim Mogale, Tubatse Fetakgomo and Lepelle-Nkumpi municipalities invested R83,4 million, R240,6 million and R153,3 million, respectively. Vhembe District Municipality invested R300 million.
According to Smalle, the mayors of the affected municipalities were negligent in their duties because they failed to provide political guidance over fiscal and financial affairs of the municipality and to monitor and oversee the exercise of responsibilities assigned to the accounting officer and chief financial officer. “The Provincial Treasury displayed a lackadaisical approach bordering on incompetence by letting municipalities in the province invest with VBS from as far back as 2014 despite treasury regulations which prohibited them from doing so,” Smalle stated.
“The DA is of the view that the inability of Provincial Treasury to fulfil its fiduciary role and the failure of mayors of affected municipalities to intervene or act against investment of public money into VBS is tantamount to financial misconduct and therefore must be investigated in terms of Municipal Regulations on Financial Misconduct Procedures and Criminal Proceedings,” Smalle concluded.
It was learnt that all the municipalities were busy with investigations the outcomes of which are expected in due course.
National Government also calls for action
This follows an earlier instruction by Zweli Mkhize, Minister for Cooperative Governance and Traditional Affairs to municipalities to institute investigations into the same issue. During the handing over of houses to pensioners in Seshego Ext 106 last Thursday, Minister of Human Settlements Nomaindiya Mfeketo also said strong action should be taken against officials and Community Schemes Ombud Service (CSOS) which is the subsidiary of her department for investing money in VBS. It was reported that CSOS invested R80 million in VBS and Mfeketo indicated that the scheme took the decision without consulting with her department or National Treasury. She reiterated that she met with the board and asked them what is it that they have done because they are responsible, adding that they are supposed to be acting.
“I have given them 14 days to explain what they are going to do with those who deposited money without any approval, either from me, Treasury including the board itself – they didn’t consult,” she stated.
Commenting on the letter from the DA, Sidwell Sibanda, Spokesperson for Provincial Treasury, said that the Executive Committee (Exco) of the province has already instructed that a forensic audit into the seven municipalities, for as far as it concerns VBS, should be conducted. “It is not within the Provincial Government’s competence to discipline officials and office bearers of municipalities, as they belong to a distinct sphere of government with its own executive powers where we do not interfere,” Sibanda explained.
Story: BARRY VILJOEN
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