After investigations, Mkhwebane found Bothman’s complaint to be substantiated, namely that the municipality has failed to pay his monthly contributions to the Cape Joint Pension Fund, Letsatsi Finance, Avbob and Old Mutual, from June 2018. The municipality has, however, been making deductions from his salary. 

The report by Mkhwebane details that the municipality took a decision to stop deductions per stop orders from employees’ salaries in July 2018, however the deductions weren’t stopped and they failed to be paid it to the beneficiaries. On 17 July 2019, over R7400 was refunded to Bothman for all the deductions that were not paid over to Letsatsi Finance. A further payment of over R8800 was made on 25 July 2019 for the same failure of not paying Bothman’s contributions to Letsatsi Finance. In the regard of Old Mutual and AVBOB, the last deduction was on 25 May 2018 and no other deductions were made further for the two beneficiaries.  

From the evidence obtained during the investigation, Mkhwebane has come across a letter that detailed that the municipality is a participating employer in the Consolidated Retirement Fund for Local Government (Fund), and they have been in arrears with the payment contributions of employees from October 2018. By the end of June 2019, the outstanding amount was R3 222 081, 44. 

“Carlo Subban, on behalf of the fund, stated they were in the process of instituting legal proceedings against the municipality for the other outstanding amounts,” read the report.

The Municipal Manager, Floyd Leeuw, stated during his preliminary investigation that he discovered the municipality did not comply with the Division of Revenue Act and therefore, R6,4 million was offset from the municipality’s equitable share and returned to the National Revenue Fund. The Provincial Treasury was duly informed of the findings, which meant that the municipality would have R6,5 million less for the 2018/19 financial year. 

“The joint pension fund had not been paid despite the fact that there were opportunities to do so during the transfer of the equitable share to reduce the arrears. We have also paid up to date all those who have retired, were dismissed or are about to retire,” stated Leeuw in the report.

The report also details a copy of a letter from the National Treasury, dated 30 November 2018, which was the approval to Leeuw’s request on 19 November 2018 for the repayment of R6.6 million of unspent grants for the 2017/18 financial year.

The former acting CFO, Samentha Mahonie, explained when she began in her position on 15 March 2018, the municipality had a bank balance of R1 046 645, grants included, however, according to financial reports, the balance should have been R9 418 367.89. The outstanding creditors, as reported to the National and Provincial Treasury, amounted to R10 094 387 and debtors to over R60 037 736. Two days after she started work, R9,6 million was reported to be owed to the conditional grants, which had been used for operational expenses.

According to the evidence obtained during the investigation, the municipality still owes the Pension Fund R4 million towards outstanding employees’ pension contributions.

OFM News/Corn Koteli