Local government plays a vital role in managing the delivery of basic services such as sanitation, water and housing — and is the tier that is closest to communities. However, the high levels of corruption in local government compromise service delivery. Back in 2010, the Auditor-General reported that “corruption has become endemic within municipalities throughout South Africa and continues unabated and has reached a state of almost no return in terms of a functioning democracy”.
According to Corruption Watch, local government is the most corrupt institution in South Africa. This is perhaps best exemplified by investigations in the eThekwini Municipality in the past decade. Three independent agencies — the Auditor-General, the Ngubane investigation and the Manase forensic audit — have confirmed cases of serious corruption in Durban.
On Monday 12 October, the Mercury headline screamed: “Parliament calls for action over Manase report into eThekwini”. Eight years after the release of the Manase report, Parliament’s Standing Committee on Public Accounts (Scopa) awakes from its Rip van Winkle slumber and with a Damascus transformation demands “a report on the implementation of consequence management as per the recommendations made in the… report”.
In his 2009-2010 report, Auditor-General Terence Nombembe stated that the eThekwini municipality had irregularly spent R532-million and that 10 councillors had interests in entities that conducted business with the municipality.
The internal audit committee of the council subsequently commissioned auditors Ngubane & Co to investigate these allegations. Ngubane & Co reported tender irregularities and financial mismanagement amounting to R3.5-billion in the eThekwini Metro. Furthermore, 53 contracts totalling more than R16-million were awarded to councillors and companies owned by municipal employees. Contracts worth R42.5-million were awarded to government employees outside the municipality.
There were also allegations of “bid rigging… and bypassing the tender process in favour of certain suppliers, consultants and contractors”. Ngubane & Co called for “deep investigation” into the real beneficiaries of tender-rigging.
Mayor Obed Mlaba said: “Our municipality has been one of the most envied and now that image is tarnished. We need to rally behind efforts to clean up and maintain the position as one of the best municipalities in Africa.”
City Manager Mike Sutcliffe described the Ngubane report as a “political witch-hunt” arguing that “allegations in the report are completely without substance”.
Based on the findings of the Auditor-General and the Ngubane report, the KwaZulu-Natal provincial government instituted a forensic audit by Manase and Associates on 1 April 2011.
The Manase report comprised more than 7,000 pages and uncovered serious cases of fraud and corruption. The original Manase report was initially not released. On 7 February 2012, a summarised version was made available to municipal councillors who had to sign a confidentiality clause.
Due to pressure from media, political parties and lobby groups, who threatened to invoke the Promotion of Access to Information Act, the Manase report was publicly released more than a year later, in June 2013. The main findings of the Manase forensic investigation included:
- 161 councillors benefited from doing business with the eThekwini Municipality;
- The municipality’s former mayor “irregularly and unlawfully influenced” a multibillion waste-reduction tender intended for Bisasar Road landfill site;
- There was an abuse of supply chain management regulations, especially in the housing unit;
- Duplicate payments (R2.6-million) were made to Dimension Data, an IT company. The error was subsequently corrected;
- The cost of the municipality’s controversial “Revenue Management System” had escalated from R150-million to R474.7-million. By 2020, this had escalated to R1.1-billion (666% over budget, which demands an independent forensic investigation);
- There were significant irregularities in the metro police, with 14 officers moonlighting as taxi owners. Some trainee constables had illegally acquired their driver’s licences; and
- There were major concerns about poor workmanship and over-expenditure in housing projects across the municipality, and flouting of public tender procedures.
The Manase report identified many examples of the abuse of Section 36 provisions, where there was a deliberate deviation from prescribed tender processes to favour certain companies or individuals with lucrative municipal contracts. In some instances, the chosen companies were not competent, resulting in poor service delivery to citizens.
While acknowledging some problems, the new mayor of Durban, James Nxumalo, contended that the Manase report “does not signal that we are facing a crisis. It is, however, a wake-up call for us to arrest toxic practices that seemed to characterise the behaviour of our officials and councillors, disregarding applicable supply chain management processes. It is also revealing that if we address these loopholes within our systems of governance, the municipality could be on its way to achieving a clean audit before 2014. We are, therefore, determined to root out the scourge of maladministration that has been afflicting us”.
Premier Zweli Mkhize committed his government to investigate allegations of fraud and tender irregularities in eThekwini Municipality: “The allegations of maladministration, irregularities, corruption and abuse of power and authority in awarding contracts, implicating municipal councillors and officials, will be investigated thoroughly and strong action taken against those found to have committed offences. We need to enforce good governance and integrity in the service of the public who voted us to office.”
In spite of such placatory public platitudes, none of those implicated in the Manase report had to wear “orange overalls”. Some received a slap on the wrist in the form of warnings, and four councillors had their salaries docked.
As subsequent events reveal, because of a lack of consequences, corruption continued in the eThekwini Municipality at the highest levels.
In June 2017, the Auditor-General found that the eThekwini Municipality awarded 377 tenders to suppliers with fraudulent documents.
In yet another high profile case, in May 2019 Mayor Zandile Gumede, Councillor Mondli Mthembu and Robert Abbu, Deputy Head: Strategic and New Development in the eThekwini municipality, were arrested for “alleged corruption over a 2017 Durban Solid Waste R389-million tender”.
Gumede described the charges against her, which included “fraud, corruption and racketeering”, as a “war against the ANC”. In an attempt to deal with factional tensions within the ANC, Gumede was controversially redeployed as an MPL in the KZN legislature.
On 10 March 2020, eThekwini Municipal manager Sipho Nzuza was arrested by the Hawks and charged with “fraud, corruption and maladministration in respect of the multimillion-rand, Durban solid-waste tender”.
The continued escalation in corruption in the eThekwini Municipality and the public sector in general is primarily related to the ambivalence of the ANC government to act decisively against perpetrators, especially as senior party members are implicated.
This was emphasised by Auditor-General Kimi Makwetu, who warned back in November 2017: “As long as the political leadership, senior management and officials do not make accountability for transgressions a priority, irregular‚ unauthorised and fruitless and wasteful expenditure as well as fraud and misconduct will continue. An environment that is weak on consequence management is prone to corruption and fraud‚ and the country cannot allow money intended to serve the people to be lost.” DM