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The troubled Free State municipality of Nala has received a lot of attention since the beginning of 2013, with much of its dirty laundry – including fraud and corruption allegations and poor service delivery reports – being hung out in the last few weeks. Read our original article about this here.

In between a visit from the public protector, Thuli Madonsela, last week, the suspension of funds from the National Treasury in January and the subsequent withdrawal of that suspension early in February, the municipality has made promises through municipal manager Chris Mokomela that it will turn things around to meet recommendations made by the Treasury. Nala falls under the Lejweleputswa District Municipality.

News reports from the past two weeks point to a final countdown for the public officials who have stolen public money from the municipality. The MEC for co-operative governance and traditional affairs, Olly Mlamleli, briefed her department’s select committee in parliament on the findings of a forensic report by auditing firm KPMG into allegations of graft in Nala.

Although the findings of the report have not been tabled in council, and are therefore not in the public domain, the DA’s provincial leader, Patricia Kopane, took matters into her own hands last week. She laid charges against the officials and councillors fingered by the report to have taken R50-million in taxpayers’ money.

The suspension

The National Treasury suspended funding to Nala in September 2012 for not submitting its financial statements, as required by law, to the auditor-general, Terence Nombembe, over three financial year terms, among other transgressions. The last statements on record were from the 2008/09 financial year, and the municipality had also not billed residents for two years. It had also failed to implement recommendations made by Nombembe to help improve what he called “dysfunctional systems”.

A service delivery red flag was the use of the bucket system, which the government has been working to eradicate.

The Treasury had invoked Section 216(2) of the Constitution, which empowers it to cut funds to organs of state that “commit a serious or persistent breach of the measures prescribed to promote transparency, accountability and the effective financial management of the economy”.

The withdrawal

The tide turned for the municipality – which is home to the towns of Bothaville and Wesselsbron – at the end of January when its officials met representatives from the Treasury to explain its strategic plans to turn around the region and start generating revenue again. The Treasury officials saw progress in addressing its previous concerns, and the funds suspension was withdrawn.

According to the Treasury, members of the council have each signed a pledge to adhere to the conditions of the resolution. If it is found to not have complied with the department on any of its conditions, the suspension will be reinstated.

Nala had only received R82-million of its financial lifeline from the state out of the R203-million that was to be transferred over the financial year ending in March 2013.

The rot

One allegation of corruption, according to News24, which quoted Kopane, involved R1.4m for “cool drinks” paid to contractors who were meant to be upgrading residents’ toilets.

In 2010, the Treasury asked KPMG to investigate fraud and corruption allegations, and its findings led to the dismissal of former municipal manager David Shongwe. Several other senior officials were also implicated, along with councillors.

Another official, named by The New Age newspaper as Dibuseng Denny Mekgoe, has been sentenced to 15 years in prison for defrauding the municipality of over R60 000 in 2008. He did this through a transport scam to which he paid the amount, using a colleague’s computer that could print out cheques, the newspaper reported.

It also reported on an apparently irregular payment of R230 000 by former mayor Mpai Mogorosi for the erection of a security wall at her mother’s house, where she also believed to be living.

When contacted by Corruption Watch in January about the Treasury’s suspension of funds, current municipal manager Chris Mokomela said his team was looking forward to turning around the municipality. Several attempts to contact him for an update on the corruption incidents were unsuccessful.

Changes ahead

As part of the agreement between the municipality and the Treasury for the lifting of the funds suspension, Nala is expected to provide Finance Minister Pravin Gordhan with monthly progress reports as it improves its systems.

During her visit, Madonsela assessed whether or not progress had been made in implementing the recommendations that her office had made to Nala. According to The New Age, the public protector was unsatisfied with what she found, but the provincial government’s website painted a different picture, that of a pleased Madonsela. Her report is expected to be out in March.



The National Treasury has lifted its funds suspension over Nala, amid promises from town officials to get their financial house in order. Meanwhile, there have been conflicting reports on the public protector’s findings.
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