Riyaz Patel
The Portfolio Committee on Cooperative Governance and Traditional Affairs (CoGTA) is continuing it’s Limpopo tour to gather first hand accounts of the chaotic state of municipalities which have invested in the Venda Mutual Bank (VBS), as well as those that have received repeated disclaimer audit opinions.
Inside Politic previously reported that municipalities that invested hundreds of millions into the VBS Mutual Bank are now ‘technically insolvent’ and some have had to postpone service delivery projects because they are broke.
Last week, the Committee summoned the Mopani, Vhembe, Collins Chabane, Greater Giyani and Makhado municipalities to hearings in Giyani and Thohoyandou.
Committee chairperson Faith Muthambi was emphatic that the hearings would lead to actions against those implicated in the saga dubbed ‘The Great Bank Heist,‘ saying they are working with law enforcement agencies.
Among some of the shocking revelations, Muthambi heard, was how Makhado Municipality – which lost R62mn after investing R155mn in VBS – spent millions on consultants to prepare financial statements which were later found to be inadequate by the Auditor General.
Muthambi probed why Collins Chabane municipal officials took documents authorising the investment of funds into VBS to be signed by a sick municipal manager who was bedridden when there was someone acting in that capacity in the municipality.
Officials told the Committee they invested R120mn into VBS on 23 October 2017, and expected to earn interest of R4mn. The Collins Chabane Municipality lost its entire investment, however.
The Auditor General of South Africa (AGSA)‘s consolidated general report on the local government audit outcomes financial year 2017/2018 further revealed that 16 municipalities invested money with VBS Mutual Bank in the 2016-17 and 2017-18 financial years.
“The bulk of the losses, 72 percent, involved investments made by eight municipalities in Limpopo: Makhado, Greater Giyani, Collins Chabane, Elias Motsoaledi, Vhembe District, Ephraim Mogale, Fetakgomo Tubatse and Lepelle-Nkumpi,” said the AG Kimi Makwetu.
Following engagements with municipalities, the Committee is scheduled to hold public meetings with stakeholders including traditional leaders, ward councillors, civic organisations and ratepayers’ associations to get first-hand experiences on the impact of the investments on overall service delivery.
“The objective of these interactions are to ascertain the impact of the investments on those municipalities, amounts invested, amounts recovered and what consequence management actions have been taken against relevant officials involved and the impact on the municipalities capacity to deliver services,” a CoGTA statement said.
