Public Protector Finds Maladministration:
Mangaung Local Municipality
24 November 2003
The Public Protector has released his report on an
investigation into allegations of impropriety in connection with
the sale of a property to an employee by the Mangaung Local
Municipality. The investigation followed complaints received
regarding the sale, at a substantial discount, of an immovable
property of the Mangaung Municipality to an employee.
It was alleged that the transaction was irregular as the erf in
question had been reserved for a parsonage and that in the event
of its being disposed of, it was to be sold at a public auction.
The process followed to sell it to the employee, whilst other
applications had also been submitted to the Municipality, as well
as the price it was sold for, were also questioned.
The investigation revealed that this particular erf had been
reserved as a parsonage for the adjacent property that was zoned
for a church. However, the reservation had been a gesture of
goodwill and no restrictive conditions were registered against the
title deed of the erf. When the 'church erf' was later sold, there
was no longer any reason for the erf to be reserved for a
parsonage.
Several applications were received to purchase the erf,
including that of Mr Silwana, an employee of the Municipality. His
application received preference in terms of the practice of 'first
come first served' which was applied by the Municipality at the
time. These applications were attended to at a low level in the
administration and the Office of the Executive Director: Finance
advised that the erf be sold at a public auction. However, neither
this advice, nor the fact that there were several applications,
was submitted to the City Manager and the Executive Mayor when Mr
Silwana's application was recommended for approval.
A one third rebate on the selling price of the property was
granted to Mr Silwana after he had applied for it, on the basis
that development costs of the erf could be high. The granting of
the rebate was further motivated by regarding it as an incentive
to the employee, comparing it to a rebate granted to a church
organisation and regarding it as a way of attracting investment
and improving the racial mix in the particular residential area.
The following key findings were made:
- The procedure and the process followed to recommend to the
Executive Mayor that the erf be sold to Mr Silwana contained
serious elements of maladministration;
- The maladministration was the result of a lack of a proper
policy regarding the administration of applications to purchase
immovable property from the Municipality;
- The determining of the selling price merely on the basis of
the municipal valuation of the property did not seem to be a
proper practice.
- The rebate granted to Mr Silwana on the selling price was
not properly motivated and justified;
- The lack of a proper policy regarding the granting of
rebates to employees gave rise to the ad hoc and discretionary
approach to the application for a rebate by Mr Silwana;
- The maladministration in the process of the sale to Mr
Silwana and the granting and acceptance of a one third rebate on
the selling price, created the perception that the sale of the
erf was manipulated in favour of an employee, to the detriment
of other interested members of the Mangaung community. The
perception compromised the integrity and credibility of the
Municipality.
- Although there clearly existed a perception of wrongdoing,
no willful intent on the part of any official, including Mr
Silwana, and the Executive Mayor, to manipulate the sale of the
erf to Mr Silwana, could be found;
- The contract between Mr Silwana and the Municipality appears
to be a valid deed of alienation. However, the manner in which
it was concluded and its contents in respect of the selling
price cannot be condoned;
- It would be in the interests of accountability, transparency
and proper governance that the selling price of the property be
renegotiated between the Executive Mayor and Mr Silwana with a
view to rectifying the perceptions of impropriety.
The Public Protector recommended that:
- The Executive Mayor of the Mangaung Municipality, in
consultation with the City Manager, take urgent steps to:
- Expedite the development of the policy in respect of the
administration of applications to purchase immovable property
of the Municipality. The policy should include measures to
ensure that the City Manager and the Executive Mayor are
properly informed of all the relevant details pertaining to
the property applied for, including a proper valuation of the
price that it could be sold for on the open market, as well as
of all the applications received up to the date of the
submission of a recommendation in respect thereof;
- Develop a policy regarding the granting of rebates on the
selling price of immovable property of the Municipality. The
policy should also address the granting of rebates to
employees; and
- Submit the policies referred to above to the Municipal
Council for consideration and approval, by virtue of the
provisions of paragraph 1.2 (a)(xxiv) of the Delegation of
Powers Policy of the Municipality, approved by the Council on
12 September 2002.
- The Executive Mayor, in consultation with the City Manager,
re-negotiate the selling price of the property with Mr Silwana
in order to rectify the perceptions of impropriety that were
created by the granting of the rebate and to ensure that the
credibility and integrity of the Municipality be sustained.
- The Member of the Executive Council for Local Government and
Housing of the Free State Provincial Government monitor the
implementation of the recommendations referred to above in
compliance with the provisions of section 155(6) of the
Constitution, 1996 and section 105 of the Local Government:
Municipal Systems Act, 2000.
Enquiries: Nicolette Teichmann
Tel: (012) 322 1190
Cell: 082 333 5624
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