LOBAMBA – The Pigg's Peak Town Council has instituted legal action against some former employees who were found to have unlawfully benefited financially from council funds.
This follows findings made by Auditor General Timothy Matsebula in his Compliance Audit Report for the Financial Year Ended March 31, 2024, which highlighted several irregular payments and unauthorised benefits within the municipality.
One of the issues raised by the auditor general concerned a former chief executive officer (CEO), who was paid entertainment allowances amounting to E6 747.26 without any proof that the expenditure had been incurred in connection with the council's business or the promotion of its services.
Furthermore, the AG noted that on November 1, 2023, the former CEO was reimbursed E1 186 in entertainment expenses, exceeding the maximum monthly limit of E1 000 stipulated in the contract of employment.
Matsebula said he drew the attention of the controlling officer to Clause 17.1 of the CEO's contract of employment, which provides that the council shall reimburse the CEO for reasonable and justifiable entertainment expenses incurred in connection with council business and the promotion of its services, subject to a maximum of E1 000 per month.
He warned the control officer that there was a risk that the CEO could be reimbursed for entertainment expenditure that was unrelated to the council's business or the promotion of its services.
During the municipality's appearance before the Public Accounts Committee (PAC) on Thursday, members were informed that internal controls had since been introduced requiring the CEO or town clerk to provide an attendance register and other supporting documentation as proof that entertainment expenditure was directly related to council business.
The committee was also told that the council had developed a financial policy and procedures manual to guide the CEO and town clerk on how such expenditure should be accounted for in future.
"The council has served the former CEO with court summons to recover the expenditure quoted in the query," the PAC was told.
In another audit query, the PAC sought feedback regarding the AG's finding that the council had made unauthorised payments for private security services for members of management and the then mayor.
According to the audit report, from November 1, 2022, the council paid for private security services for certain members of management without the necessary authority. By the time of the audit, the total amount paid stood at E610 992.86.
Matsebula warned that paying for private security on behalf of management could create an unnecessary precedent, with future office bearers potentially demanding similar benefits.
He further cautioned that service delivery could be adversely affected because funds intended for development were instead being used for the personal benefit of individuals.
Providing an update to the PAC, council officials said letters of demand had been issued to the beneficiaries, requiring them either to refund the unauthorised benefits or enter payment arrangements.
However, the committee heard that no payments had been received and none of the beneficiaries had come forward to making payment arrangements.
Council officials said they had intensified engagements with the former beneficiaries while also seeking legal opinion on the best approach to recover the money. The municipality is also consulting the Ministry of Housing and Urban Development on how the matter can be resolved, particularly as the beneficiaries are no longer employed by the council.
Another issue discussed before the PAC related to the overpayment of daily subsistence allowances to officers and councillors who travelled to Botswana to attend a conference.
According to the AG's report, two officers and two councillors were paid daily subsistence allowances at a rate of US$250 per day instead of the US$200 prescribed under Government Circular No. 6 of 2010.
As a result of the inflated rate, the council incurred an additional cost of E33 660.
The PAC was informed that the officers had undertaken to repay the unduly paid subsistence allowances through instalments and had each already made down payments of E1 000 towards settling the outstanding amounts.
Principal Secretary in the Ministry of Housing and Urban Development Dr Simon Zwane.