The bankrupt Madibeng Local Municipality, with its headquarters in Brits, spent more than R7-million on two consulting companies in an effort to restore the local authority to financial stability.
It hired Johannesburg-based City Square to assist with its financial management, including tax collection and also hired attorneys Ranamane Phungo Incorporated to provide the legal assistance.
According to various municipal officials, trade union representatives and competing service providers, the office of the Minister for Co-Operative Governance and Traditional Affairs, Sicelo Shiceka effectively “imposed” these companies on the municipality.
Shiceka’s spokesman Vuyelwa Qinga has denied these allegations.
Municipal officials claim that the tender for work done by City Square was not advertised and when the contract reached its expiry date is was simply extended. Interestingly City Square and Ranamane Phungo share directors and office telephone numbers.
Madibeng has been the focus of widespread service delivery protests and rates boycotts in the past and some residents have chosen to pay the money they owe in rates and services into a separate trust account.
Madibeng has been placed under administration after the Auditor-General condemned its financial management, lack of accountability and its poor service delivery.
The council is currently conducting an audit of all service providers appointed by it to see if the scope of work and be limited or the contracts suspended. City Square is still providing a range of financial services to the municipality.
The local authority is said to be in dire financial straits, cannot afford to buy photocopy paper, has no detergents to clean the offices and the entire council building is without toilet paper.
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