The Pietermaritzburg City Hall in the CBD. Picture: Doctor Ngcobo Independent Newspapers
Image: Doctor Ngcobo Independent Newspapers
The Auditor General of South Africa has taken the Msunduzi Local Municipality to task for wasting millions of rand in taxpayers’ money paying scarce skills allowance to employees that did not qualify to receive the funds. The municipality has paid close to R6 million in scarce skills allowances to individuals who did not qualify for the allowance. This matter was flagged by the Office of the Auditor General in the latest audit report.
The concerns come as the municipality is under pressure after the Department of Co-operative Governance and Traditional Affairs in KwaZulu-Natal announced that it is launching an investigation into the affairs of the municipality.
The Auditor General’s report noted that one of the areas identified where the mandate of utilising taxpayers’ money responsibly was not fulfilled was in the payment of scarce skills allowances without the identification of the employees eligible for the allowance.
“The accounting officer has been paying scarce skills allowances to certain employees without any supporting evidence to prove that the employees receiving the allowance are eligible to receive it. There is still no approved policy specifically addressing who is eligible for the scarce skills allowance. The allowance continues to be paid without reapplications by the employees and the approval thereof.”
The report stated that the non-compliance has resulted in a likely material financial loss of R5.99 million in the financial year that ended June 30, 2024.
“Based on the information provided, further losses are likely to be incurred by the municipality as scarce skills allowances continue to be paid. The full extent of the losses still needs to be deter-mined by the accounting officer as part of addressing this material irregularity,” it said.
The report said the municipality has committed to taking steps to address the matter, including conducting a forensic investigation into how the allowances had continued to be paid.
ACDP councillor Rienus Niemand condemned this as blatant corruption perpetrated by members of the administration.
“This was a properly co-ordinated effort to fraudulently pay so-called scarce skills allowances to large numbers of employees who do not qualify, as they simply had no scarce skills. Both the employees and their managers as well as the head of department for human resources and the chief financial officer (CFO), knowingly condoned the fraud.
“The same was done with standby allowances being paid to employees whose jobs do not simply have a standby function. This represents a team effort of crime and corruption. The prospect is frightening if you think about it - the municipal fiscus being pillaged by employees with their managers’ help,” he said.
Niemand said the ACDP is at the forefront of the fight against corruption and will, in particular, focus on bringing the culprits of these crimes to book and recovering the stolen money.
Municipal spokesperson Ntobeko Mkhize said the AG has raised a material irregularity regarding the payment of scarce skills allowances to employees who may not qualify.
“The matter is under investigation, and the municipality is addressing it in line with applicable regulations and policies. As this is an ongoing investigation, we are bound by confidentiality and cannot provide further details at this stage.”
Sources in the Msunduzi Municipality said concerns about the misuse of the scarce skills allowance was first identified as a problem by the municipality’s internal audit, which led to a decision to stop the allowance. At that time, Lulamile Mapholoba was the municipal manager, and approximatelyR2 million had already been spent on this allowance.
“This allowance is being abused, I recall that there were 26 people receiving this allowance. It is given to top individuals who have been recruited from other areas due to the scarcity of their skills.
"Very often, these individuals have been headhunted even from other provinces. In Msunduzi, the allowance has been mismanaged, as it is awarded to whomever the HR department favours. Most of those receiving the allowance are locals who do not even possess the necessary skills,” said the source.