Irregular payments to top officials

Japie Bosch, Our Times, 22 September 2011

RECOMMENDATIONS that action be taken against Robbie Dennis, former mayor, and two top officials of Kouga is contained in a report compiled by the respected auditing firm, KPMG.

The report focuses on irregular payments made to senior officials of the municipality.

While the full content of the report is not yet in the public domain, the Our Times has seen the recommendations of the report.

It was also recommended   that action be taken against Dr. Eddie Rankwana, recently-fired municipal manager, and Ridwaan Abdullah, suspended chief financial officer.

The core of the matter, as exposed by the recommendations, is that Abdullah instructed and permitted “payments to himself and other officials”, that Rankwana was aware of these “payments to himself and other officials” and that Dennis approved them.

Earlier the abovementioned three officials were lightheartedly referred to as “Tripple R” – Robbie, Rankwana and Ridwaan.

Kouga spokeswomen person Laura-Leigh Randall said   the report was initiated by the newly-elected council in July, after allegations of financial misconduct. She confirmed that it was received from KPMG on 9 September, and was tabled at a special council meeting on 12 September.

“The council is currently acquainting itself of the facts in order to decide how the findings should be dealt with. Once all the necessary internal processes have been completed, the report will be published,” she said.

Professor  Chimpie Cawood said he preferred not to comment at this stage, as the report was still confidential.

In its preamble to the recommendations, KPMG states:  “We base our recommendations on the factual findings and conclusions of the investigation.”

Pointing a finger at the municipality, one recommendation reads:  “...  that the municipality give consideration to implement control measures relating to payments made by Kouga to directors and the municipal manager outside their normal salaries.”

It is not yet known what these payments entail, but is seems to relate to allowances as another recommendation reads:  “We further recommend   the municipality should consider taking appropriate disciplinary action against Abdullah and Jenneker for interpreting the collective agreement incorrectly, specifically relating to the calculating of acting allowances for section 57 positions.” The latter is Lynette Jenneker, manager expenditure, at the municipality. Section 57 positions are municipal directors.

With regard to those involved, KPMG made the following recommendations:

• Acting directors:  “...   the municipality should consider obtaining legal advice relating to the possible recovery of the R1.14-million to the acting officials at Kouga”. 

• Directors and the municipal manager: “...   the municipality should consider legal advice relating to the possible recovery of the amounts paid to the relevant directors and the municipal manager.” It is not mentioned how much money is involved in this case.  No names of directors or acting directors were mentioned in the recommendations.

• Abdullah:  “...   the municipality give consideration to take appropriate disciplinary action against Abdullah for instructing and permitting the hand- cheque payments to himself and other officials at Kouga and thereby committing an act of financial misconduct according to the MFMA (Municipal Finance Management Act). He also did not adhere to the code of conduct for municipal staff members according to Schedule 2 of the Municipal Systems Act, No 31 of 2000.

• Rankwana:  “... that the municipality give consideration to take appropriate action against Rankwana as he was aware of the payments effected to himself and the other directors, but did not query the origin and basis of all these payments.  It, therefore, seems he condoned the payments to himself and other directors.”

• Dennis:  “... that the municipality give consideration to take appropriate action against previous mayor Dennis for also committing an act of misconduct by approving these payments.”

Rankwana was recently “released” from his position as municipal manager.  No reasons were given. Randall confirmed last week that he had accepted a severance package and was no longer attached to the municipality. 

According to reports, mayor Booi Koerat said his package was “private”.

The DA objected to the procedure by which Rankwana was “released”.  It maintained that, should he have done something wrong, a disciplinary hearing should be held. Rankwana’s contract as municipal manager would have expired in February 2012.  It is likely  his package would have included his salary until then, plus other payments.

Abdullah was put on “precautionary leave” in April 2011.     According to reports, he returned to work last week with a letter from his attorney.  However, he was instructed to leave the municipal premises.  He now intends to take his case to the Supreme Court.