Nightmare looms for new Finance boss


Makana’s new chief financial officer, due to start on 1 November, faces everything from ghost workers to a growing debt of close to R200 million – over and above the municipality’s operating budget that in the last financial year was adjusted to R432m – according to figures in the agenda for April’s Budget Steering Committee meeting. The municipality earlier this month confirmed they had resolved on a candidate to be appointed as chief financial officer (CFO) and sent Council’s selection to the MEC for Cogta (Fikile Xasa) for concurrence.

“We cannot give out the name yet, but [it]is a very competent person for the position. Our intention is for the person to start on 1 November 2018,” spokesperson Yoliswa Ramokolo told Grocott’s Mail earlier this month.

The MEC’s concurrence is mandatory to ensure the requirements of the Municipal Systems Act are met in terms of the selection and appointment procedure.

To say the new CFO will face a tough task is an understatement.

They will walk into the nightmare of a proposed 7.5% salary increase for municipal staff costing Makana an additional R1 million a month in staff costs, which in April stood at at 49% of expenditure incurred to date; and an annual financial statement that doesn’t fly because of incomplete information. Resolving this won’t be easy because of data lost in a major system crash, and incompatibilities between the old accounting systems and the new Municipal Standard Charter of Accounts (MSCOA).

They also walk into the fresh threat of electricity cuts to Makana because of an outstanding debt to Eskom of R67 539 876.39.

It’s not hard to understand why Makana’s Finance directorate has struggled since at least 2012 to hire and retain permanent chief executives. Below are episodes in the directorate reported on by Grocott’s Mail over the years:


2010/11 – Disclaimer audit opinion

2011/12 – Disclaimer audit opinion

2012/13 – Disclaimer audit opinion

February 2012 – No Finance Director. There were also resignations by technical services director Dabulo Njilo and water services manager Mongeze Mabece.

January 2013 – Danny Sahibdeen appointed as CFO.

July 2013 – Against a background of tensions between newly appointed Municipal Manager Pravine Naidoo and councillors, CFO Danny Sabdiheen resigns after just six months in the job. He said this was because of Naidoo’s impossible demand that he singlehandedly submit a qualified audit report by August. Since December the municipality had for the first time in more than a year enjoyed a full complement of directors. Other positions filled in recent months had been those of community and social services (Mandisi Planga) and corporate services (Mzukisi Madlavu) and the municipal manager (Pravine Naidoo).

August 2013 – CFO Danny Sahibdeen tells MM Pravine Naidoo he will sue Makana because his resignation wasn’t brought to and accepted by Council.

Strategic Manager Mncedisi Boma, designated spokesperson at the time, responded to a query about the allegedly over-hasty advertisement of the post as follows: “We are not asking for miracles or magic. We published an advertisement. We are at the end of the recruitment process and we are waiting for an end product which will be the appointment of a credible, strategic and qualified CFO who will take the municipality out of a disclaimer.”

Busi Khumalo, from the Province, steps in as acting CFO.

October 2013 – Makana staff gather outside the city hall on payday, Friday 25 October, as rumours rapidly spread that the municipality has no money in the bank. They are addressed by the Mayor Zamuxolo Peter and MM Pravine Naidoo, who assure them they will be paid.

Acting municipal manager Thembinkosi Myalato tells Grocott’s Mail there was a technical glitch with the bank that had delayed payments.

November 2013 – Mncedisi Boma says Makana is not bankrupt and that rumours the Province would take over the running of the municipality are not true.

2013/14 – Disclaimer audit opinion

March 2014 – Pravine Naidoo dismissed. Mncedisi Boma dismissed.

July 2014 – Eastern Cape Provincial Treasury invokes Section 154(1) to assist Makana with financial management

August 2014 – Cogta MEC Fikile Xasa invokes Section 139 (1) (b) of the Constitution in preparation for placing Makana under administration.

September 2014 – Cogta MEC Fikile Xasa confirms he received the Kabuso Report – a forensic audit of Makana’s finances and administration.

September 2014 – Second-option candidate Paul Mahlasela, former CFO of Ngqushwa (Peddie) turns down the CFO job, following on the heels of first choice Riaaz Lorgat from Cacadu DM who also turned down the offer.

October 2014 – Pam Yako is appointed as Adminstrator in terms of Section 139 (1) (b).

November 2014 – Former MM Pravine Naidoo challenges his dismissal. Makana advertises MM, CFO ad HR Manager posts.

February 2015 – Thembinkosi Myalato resigns as Infrastructure Director.

March 2015 – Acting CFO Busi Khumalo receives Council’s backing to launch a full forensic investigation after she tables a three-page report implicating municipal staff members in suspicious activities. Allegations were that:
* Two junior staff members in the Finance Department had committed fraud.
* Finance officials were also receiving overtime almost monthly, without approval.
* Some staff members were paid more than 65% of their salaries as overtime every month.
* Some payments were being approved through the forging of signatures.
* Ghost workers – people no longer employed by the municipality – were still on the payroll, with their salaries having been paid into existing employees’ accounts for more than two years.
* Casual workers were salaried as permanent staff, including receiving 13th cheques.

April 2015 – Cogta MEC Fikile Xasa instructs Makana to readvertise the CFO post. Mayor Peter says this is because no one on the shortlist was a strong enough candidate. Peter tells a Cogta/Salga joint meeting Makana’s problems are because of a dearth of key office bearers: Directors’ terms had ended; the MM had been suspended; they struggled to attract good CFO candidates.

August 2015 – Jongisizwe Gomomo is appointed administrator in terms of Section 139 (1) (b). His brief includes that he is to: Bring stability to the municipality; Facilitate the immediate appointment of a permanent municipal manager; Facilitate the finalisation of dozens of pending court cases against the municipality; Implement the recommendations of the previous administrator.

2014/15 – Qualified audit opinion

December 2015 – Makana gets its first qualified audit in years. It is still without a permanent municipal manager, CFO and Director of Infrastructure and Technical Services.

Acting CFO Busi Khumalo, deployed from the Province, leaves.

January 2016 – Dali Mlenzana appointed Infrastructure Director.

March 2016 – Lieutenant Anelisa Feni of the Hawks confirms to Grocott’s Mail that the Hawks visited Makana Municipality on 11 March, 2016 in connection with the alleged ‘ghost worker’ scam.

Mbulelo Pikoli, from Joza, prompted by a R8000 tax bill, engages a lawyer and contacts Grocott’s Mail after he discovers he has been falsely employed at Makana since October 2013 on a salary of R4 500 a month. He says he is aware that his name is still in the municipality’s systems, although he has never worked a day at Makana Municipality. He opens a case of fraud. Director of social services Mandisi Planga, is the senior manager assisting the Hawks in their investigation.

March 2016 – Makana tries to recover more than R200K in overpayment from Mncedisi Boma, fired in 2014.

November 2017 – DA’s Makana caucus withdraws a motion for the municipality to be put under full administration in terms of Section Section 139 (1)(c ), which would include dissolution of the Council. They do this on the basis of Mayor Nomhle Gaga’s assurance that Sarah Baartman District Municipality’s Manager Ted Pillay’s secondment to Makana had been requested.

January 2018 – A grouping of civil society organisations along with the DA protest the fact that the secondment of Ted Pillay hasn’t yet gone ahead. The Concerned Citizens Committee to Save Makana red-flags what appears to have been be a misleading statement in the 24 November announcement, and a demonstration outside the City Hall follows days after. Pillay was seconded in a resolution taken on 24 January, Sarah Baartman Mayor Eunice Kekana later clarified.

February 2018 – Ted Pillay,  Manager of Sarah Baartman District Municipality, is appointed Acting Municipal Manager.

March 2018 – The CFO’s expenditure report to the Budget Steering Committee dated 5 March 2018 said that almost no suppliers had been paid within 30 days because of the municipality’s financial constraints.  Salaries and a few suppliers, including Eskom, had been paid. The Eskom bulk account of R6 077 456 for January hadn’t been paid on the due date but agreement was made to pay at the end of February.

May 2018 – The CFO reports to the Budget Steering Committee that to comply with the Council Resolution and the payment plan with Eskom, almost all payments were held back in an effort to pay Eskom R10.5 million due on 4 May, in addition to salaries. Payments of R20.3 million for April 2018 included R15.4 million for salaries; R4.2 million (Municipal Infrastructure Grant); R574 881 (Development Bank of SA loan); R49 201 (maintenance/ stock items); R93 931 (Postage: consumer statements).

May 2018 – Department of Co-operative Governance and Traditional Affairs Intervention Team under Cogta Minister Dr Zweli Mkhize visits Makana promising technical expertise in the areas of infrastructure, and support for management.

September 2018 – Councillor Darryn Holm warns of a likely backlash should a proposed 7.5% salary increase for municipal staff go ahead. The salary and wage collective agreement tabled in the agenda for the special council meeting on 29 August would cost Makana an additional R1 million a month in staff costs, which currently stand at 40.6% of the total municipal budget.

September 2018 – In the Council meeting to table Makana’s draft Annual Financial Statement (AFS) it comes under heavy criticism from the audit committee chair for poor and incomplete information. Fruitless and wasteful expenditure was recorded in the draft as R25.9 million for 2018, irregular expenditure at R181.8m and Unauthorised expenditure at R356.6m. Acting CFO Colleen Mani and her team are fully praised for making the best of a bad situation, with councillors thanking them for the long hours they put in to overcome gaps left by the recently resigned CFO and IT problems.

October 2018 – Eskom confirms to Grocott’s Mail that they intend to impose power cuts on Makana Municipality at the start of the 2018-19 Festive Season, continuing indefinitely because of Makana’s outstanding debt of R67 539 876.39.

October 2018 – Makana spokesperson Yoliswa Ramokolo confirms that the Council has resolved on the candidate to be appointed as CFO. The name has been sent to the MEC Cogta (Fikile Xasa) for concurrence. “We cannot give out the name yet, but [it]is a very competent person for the position. Our intention is for the person to start on 1 November 2018.”



The following bodies are tasked with overseeing municipal finances:

  • Internal audit unit committee
  • External audit committee
  • Budget Steering Committee (chaired by Mayor Nomhle Gaga)
  • Finance, Administration, Monitoring and Evaluation Portfolio Committee (FAME)
  • Municipal Public Accounts Committee
  • Provincial Treasury
  • Auditor General


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