The cash-strapped Enoch Mgijima municipality’s decision to buy a luxury vehicle for the mayor at a cost of more than R1.2m has come back to haunt it.
The price of Madoda Papiyana’s BMW X3 — bought in February — was R500,000 above the National Treasury’s prescribed upper limit of R700,000 for mayoral vehicles.
Part of the amount will now be declared as unauthorised expenditure by the municipality and the transaction will be referred to the council’s finance watchdog, the municipal public accounts committee (Mpac) for investigation.
The municipality had long maintained that it acted within the confines of the law in buying the mayoral vehicle.
The U-turn, which was revealed in the Bhisho legislature by the Eastern Cape co-operative governance department’s administration boss, Vuyo Mlokoti, has not gone down well with DA MPLs.
The party wrote to provincial treasury and co-operative governance political bosses this week, demanding urgent intervention and consequence management for the municipal officials and politicians involved in the decision.
DA MPL Chantel King has written to finance MEC Mlungisi Mvoko and his counterpart at co-operative governance, Zolile Williams, describing the purchase of Papiyana’s vehicle as reckless expenditure and a clear violation of National Treasury regulations.
King said in her letter, dated November 17, that the purchase also contravened the prescripts of the Municipal Finance Management Act.
“On June 26, the Cogta MEC formally requested reasons from the municipality for incurring the expenditure.
“The municipality responded on July 2, arguing that the Treasury cost limit, set in 2019, had not been adjusted for inflation and therefore justified exceeding it.
“This reasoning is incorrect and ignores the fundamental principle that Treasury frameworks remain legally binding until formally amended,” King said.
In terms of the law, it is the auditor-general who has the final authority to ultimately declare a transaction either authorised or unauthorised and sponsor recommendations.
— Pheello Oliphant, Cogta MEC Zolile Williams' spokesperson
During a co-operative governance portfolio committee meeting in the legislature last week, King said, MPLs were informed about plans to declare part of the expenditure as unauthorised and the decision to refer it to Mpac for investigation.
“However, this disclosure alone does not resolve the breach nor protect the public purse from further abuse
“This reckless expenditure is especially concerning given that Enoch Mgijima is currently under a national financial recovery plan due to its precarious financial position, including an outstanding R1.6bn debt to Eskom.
“In this context, approving the purchase of a luxury vehicle is fiscally irresponsible and threatens the integrity of the financial recovery plan itself,” King told Mvoko and Williams.
She requested the MECs to ensure full consequence management, “including determining liability and initiating recovery of the unauthorised expenditure from the responsible officials and office bearers”, and for the matter to be referred to the auditor-general, “for assessment of a material irregularity and to trigger binding legal remedial action”.
Mvoko’s spokesperson, Pumelele Godongwana, confirmed on Wednesday that the MEC had received King’s correspondence, saying he had referred the matter to co-operative governance “as a relevant authority for municipalities”.
Enoch Mgijima municipal spokesperson Lonwabo Kowa confirmed that the item had been tabled in council “through the Section 52(d) report as irregular expenditure”.
He said the purchase “will definitely be investigated by Mpac”, but could not provide timeslines for the completion of the probe.
Kowa said the municipality “cannot foretell what actions will be taken after the report from Mpac has been issued”.
He said the municipality’s annual financial statements would be finalised on November 30.
In July, it was reported that the purchase of the mayor’s vehicle would be investigated by both the provincial co-operative governance department and the office of public protector Kholeka Gcaleka.
EFF councillor Luthando Amos had written to Gcaleka’s office on May 28, calling for a full investigation
Gcaleka’s office could not be reached for comment on Wednesday, but Kowa said questions by co-operative governance and the public protector were received and responded to.
Williams’ spokesperson, Pheello Oliphant, confirmed that the expenditure, above the prescribed norm, had been reported as unauthorised expenditure in the municipality’s Section 52(d) report.
A Section 52(d) report is a quarterly financial and performance report that a mayor submits to council, and which details the municipality’s financial state of affairs and the implementation of its budget.
“In terms of the law, it is the auditor-general who has the final authority to ultimately declare a transaction either authorised or unauthorised and sponsor recommendations.
“In summary, the report Cogta received from the municipality stated that the purchase of the mayoral vehicle for R1.2m was not excessive, because the price threshold was outdated as it was based on the 2019 threshold, which had not been revised since then,” Oliphant said.
Amos could not be reached for comment on Wednesday.
Daily Dispatch
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