The curious case of the municipal CFO with many lives
In a little municipality not so far away there was an accountant. He was given a cushy job and, less than 10 days into it, he signed off on payments of more than R2-million to companies that never provided the services they were paid for.
He was then banned from working in a municipality. But, instead of serving his ban, he landed a job in another municipality in the same position a very short time afterward.
This is not a fairy tale.
Four years ago, the Amajuba District Municipality in KwaZulu-Natal fired its acting chief financial officer, Khulekani Thusi, for failing to ensure proper procurement processes were followed when he and the municipal manager signed off on payments to dubious companies that didn’t even render the services.
The municipal manager resigned and Thusi was found guilty of contravening the supply chain management policies and the Municipal Finance Management Act.
According to Thusi’s appeal records, filed at the South African Local Government Bargaining Council in KwaZulu-Natal, he did not answer questions at the initial hearing held by the municipality. Only when he was dismissed did he begin to defend himself.
His defence was unsuccessful. If regulations were followed, he should have served a ban of between five to 10 years before he would be allowed to be re-employed by any municipality. This is clearly set out in the Local Government Municipal Systems Act.
It seems that Thusi has been blessed, because he was employed at the recently established Big Five Hlabisa Local Municipality, born from the merger between the Big Five False Bay and Hlabisa local municipalities on August 3 2016.
The mayor of the Big Five Hlabisa Local Municipality, Velenkosini Hlabisa, threw his weight behind Thusi, telling the Mail & Guardian that the fact that this story had come to light at this time was concerning.
He said the story had emerged now because the municipality is in the process of appointing a chief financial officer and Thusi had been one of the applicants.
“It is a painful thing when people want positions — willy-nilly they do whatever it takes to pay and destroy others to satisfy their desires,” Hlabisa said. “Issues got raised in the corridors and eventually by the department [of co-operative governance and traditional affairs], which had approved his acting as the chief financial officer in the past.”
He said Thusi’s verification was done with Amajuba municipality and no record of dismissal was disclosed to the then Hlabisa municipality. Hlabisa argued that Thusi acting in the chief financial officer position wasn’t the same as being employed in the position, hence the mayor doesn’t believe that any regulations were subverted.
Back in 2011 Thusi was promoted to acting chief financial officer at the Amajuba municipality. According to the arbitration award document, he was hired on February 17 and signed off on the payments to three service providers 10 days later.
“A company search was done in relation to the three service providers … Central Route Medeia [sic] Trading was deregistered on July 16 2010. Hallelluyah Entertainment was deregistered on February 24 2011. Payment was made to it on February 25,” read the documents.
A third company, Lindinhlanhla Enterprise, was also paid.
But it gets even more bizarre. All three companies were to provide accommodation, dinner and breakfast for five days for a regional sports competition that would be held in December.
“When the municipality tried to confirm the bookings [...] they could not find said service providers. [It] had to make other arrangements for the accommodation, which amounted to a cost of approximately R300 000,” reads the report.
“The applicant’s [Thusi’s] main defence was that he was not involved in the initial procurement of these services and it was not his duty to have checked that everything was in order. The municipal manager had approved the invoices and he basically instructed to pay.”
The municipality suffered a loss of R2 006 759 for services not provided.
The report said that any reasonable person would have realised that there was something wrong with the payments.
For now Thusi keeps on working as though R2-million never disappeared.