The embattled Emfuleni municipality in Gauteng has placed a moratorium on all procurement, except for emergency procurement subject to approval, in what is seen as the first signs of financial trouble.
Concerns are that the moratorium will collapse service delivery in the cash-strapped municipality. It is also seen as evidence that the suspension of chief financial officer Andile Dyakala has been detrimental to stability.
According to an internal memo, dated 13 May 2022, from municipal manager Lucky Leseane addressed to all managers and executive directors, “all procurement activities will [cease] with immediate effect and only emergency procurement will be considered on request and approval of the accounting officer”.
‘Dodgy’ insurance contract
The freezing of procurement comes barely two months after Dyakala was placed on precautionary suspension, days after blowing the whistle on a R57 million dodgy insurance contract.
According to information from those close to the process, the moratorium will not only collapse already compromised services but is also an indication that funds have been depleted and a sign of financial mismanagement.
“In essence they have used money for non-core services… they are insolvent. They financially mismanaged the municipal finances within two months after suspending the CFO,” an official revealed.
The Citizen has previously reported how Dyakala was placed on suspension barely a week after he had written to the auditor-general’s office alleging corruption against Leseane, and requesting that an investigation be instituted into his role in the awarding of the municipality’s R57 million insurance brokerage contract.
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, and reeked of bribery and corruption.
Factional
The official who cannot be named for fear of reprisal said the cash-strapped municipality currently under administration had also hurriedly appointed a security company at an inflated cost of R250 million.
Dyakala has claimed he was suspended to allow a faction of the ANC in the region to access funds for the upcoming regional elective conference.
“Service delivery will collapse with the decision and it is evident that the suspension of the CFO [Dyakala] was detrimental to service delivery and stability of the municipality. On 10 May the municipality failed to pay a R20 million installment due to Rand Water and a possibility exists that they will not be able to pay salaries,” a concerned official said.
“Corruption in Emfuleni has reached another level and the suspension of the CFO opened the flood gates for corruption and abuse.”
What the municipality says
Municipal spokesperson Makhosonke Sangweni confirmed the moratorium but said service delivery will not be affected and that projects that need to be adjudicated will continue.
He said they were minimising costs of non-essential services as the municipality needs to operate in a sustainable manner given the current economic challenges facing it and the community.
“We have budget management and a monitoring committee established by the council, which administrators also sit on. The decision was taken by the committee, in line with reducing cost and also taking into account cost containment measures that the MFMA [Municipal Finance Management Act] circular requires us to reduce costs that are unnecessary,” Sangweni said.
He said the Budget Monitoring and Controls Committee (BMCC) took the decision on the 11 May and that the moratorium will be reviewed at the beginning of the new financial year.
