Mayoral Grants-in-Aid: Serious Concerns

Dear Members,

Mayoral Grants-in-Aid: Serious Questions About R2.8 Million of Your Money

While studying the last Bitou Annual Report we noticed the Mayoral Grants-in-Aid fund had doubled from R1.4 million to R2.8 million. Red flags popped up when we recognized repeated recipient names and that led to our investigating the matter further.

To do so, we PAIAd the relevant information for 9 of the 27 recipients and uncovered a series of serious red flags that demand answers. Per the fund policy, recipients are required to have registration certificates, specified financial documents and follow-up reporting.

What the investigation has found:

• Recipients that appear to be unregistered or deregistered;
• “Ghost” entities for which required financial documentation cannot be produced;
• Contracts containing legal deficiencies, including unsigned and/or undated agreements;
• Documents setting out performance obligations are missing.
• Identical contract wording across multiple recipients erroneously refering to an unknown entity;
• Obvious discrepancies between application dates, agreement dates and bank-account opening dates;
• Material deviations from Council’s policy including recipients who had already received substantial donations, raising questions about the basis on which Bitou approved additional funding;
• Indications that an office bearer of Council and her family were beneficiaries.
• No documents were produced to show how the money was spent by the beneficiaries, nor if the funds were spent correctly, indicating a failure by the administration to manage the fund.

Deviations and non-compliance on the scale revealed so far require in-depth forensic investigation.

A troubling history

This is not the first time the Grants-in-Aid Fund has raised concerns. It was previously examined in a Western Cape Government forensic investigation into Bitou in 2018.

Very importantly, there is evidence that money has not been accounted for as required by the MFMA resulting in potential serious breaches of the MFMA.

Given that history, the continued appearance of serious irregularities raises an obvious question:

What was done to correct the problems identified previously?

There is no point in relying on Province to do the investigation because neither Province nor Council held anybody to account nor recovered any of the embezzled money so we will be handing our investigation report and documents to the Hawks and Public Protector for appropriate investigation.

Ratepayers deserve answers

R2.8 million is not discretionary private money. It belongs to the residents and ratepayers of Bitou.

They are entitled to know where it went, why it was paid, who authorised it, what was received in return and whether every payment complied with the law and municipal policy.

This is ratepayers’ money. We intend to follow every rand — and insist that those responsible account for it.

Kind regards,
Tony Blignaut

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