The Endumeni (Dundee) Local Municipality is grappling with an escalating challenge following the abrupt resignation of its Municipal Manager, Sithembiso Ntombela, on Friday, 30 May 2025. His departure is mired in allegations of fraud and corruption, a situation starkly illuminated by the Auditor-General of South Africa’s (AGSA) 2023/2024 Municipal Finance Management Act (MFMA) Report, which reveals profound deficiencies in the municipality’s financial governance.
According to reports, Ntombela’s resignation is tied to a controversial multi-million rand security tender awarded to a security company based in Newcastle, FBL Security Company.
He faces accusations of fraud and corruption in the tender’s allocation, which reportedly circumvented established bidding protocols by citing urgency.
Moreover, KwaZulu-Natal CoGTA MEC Thulasizwe Buthelezi issued a Section 106 report following a forensic investigation into the fraud and corruption allegations linked to the FBL appointment. The report prescribed specific remedial measures.
In March, MEC Buthelezi granted the municipality 21 days to act against implicated individuals, but the deadline lapsed without action.
Endumeni Speaker Andile Nsibande sought and received an extension, citing the council’s need for additional time to review the report.
Nevertheless, Ntombela’s exit coincides with the AGSA 2023/2024 MFMA Report, which exposes severe governance failures within Endumeni. The municipality has consistently received a “disclaimer of opinion” audit outcome from Auditor-General Tsakani Maluleke. This indicates that the AGSA could not secure sufficient evidence to form an opinion on the municipality’s financial statements due to incomplete or unreliable records.
A “disclaimer of opinion” in the AGSA’s report on Endumeni Local Municipality highlights critical failures across several key areas:
- Pervasive Breakdown in Financial Record-Keeping and Controls:
- Unsupported Expenditure: The report identifies expenditures lacking valid supporting documentation, such as invoices, receipts, or delivery notes, rendering verification of their legitimacy and accuracy impossible.
- Incomplete and Inaccurate Asset Register: Endumeni’s records fail to accurately account for municipal assets, including infrastructure, land, and equipment, with deficiencies in valuation, depreciation, and physical verification.
- Revenue Management Deficiencies: Flawed billing and collection processes have resulted in unreliable debtor records and substantial uncollected revenue, severely undermining the municipality’s financial viability.
- Unreconciled Accounts: Numerous critical financial accounts, including bank reconciliations, remain unreconciled, reflecting a lack of fundamental financial discipline.
- Widespread Non-Compliance with Legislation:
- Systemic Supply Chain Management (SCM) Irregularities: The report notes persistent non-compliance with SCM regulations, including:
- Irregular Expenditure: Funds expended in violation of the MFMA, SCM regulations, or other laws, such as contracts awarded without competitive bidding, payments for incomplete services, or transactions involving undeclared conflicts of interest. The FBL security tender exemplifies this issue.
- Unauthorised Expenditure: Spending undertaken without proper council approval or exceeding budgeted amounts.
- Fruitless and Wasteful Expenditure: Funds squandered due to negligence or poor planning, such as penalties for late payments or losses from expired materials.
- Failure to Implement Previous Audit Recommendations: The municipality has repeatedly failed to address issues raised in prior audits, signalling a lack of commitment to robust governance and accountability.
- Non-Compliance with GRAP (Generally Recognised Accounting Practice): The financial statements do not adhere to the prescribed accounting framework, compromising their reliability and transparency.
- Systemic Supply Chain Management (SCM) Irregularities: The report notes persistent non-compliance with SCM regulations, including:
- Critical Weaknesses in Governance and Oversight:
- Ineffective Internal Audit Function: The internal audit unit lacks the independence, capacity, or support needed to effectively identify and report control weaknesses.
- Dysfunctional Audit Committee: The audit committee, tasked with providing independent oversight, fails to execute its duties, resulting in inadequate accountability for financial misconduct.
- Absence of Consequence Management: The AGSA underscores the municipality’s failure to discipline officials responsible for financial mismanagement or non-compliance, fostering an environment where misconduct persists, as evidenced by the delay in addressing the MEC’s Section 106 report.
- Skills Deficiencies and Vacancies: High vacancy rates, particularly in critical roles such as the Chief Financial Officer (CFO) and other senior finance positions, severely hamper the municipality’s financial management capacity.
- Severe Financial Health and Sustainability Concerns:
- Going Concern Risk: The AGSA expresses significant doubt about Endumeni’s ability to continue as a “going concern,” suggesting that its liabilities may soon surpass its assets, potentially rendering it unable to meet financial obligations.
- Persistent Cash Flow Problems: Chronic cash shortages impede the municipality’s ability to pay creditors, deliver services, and maintain infrastructure.
- High Levels of Uncollectible Debt: A substantial portion of outstanding service delivery debt is deemed irrecoverable, further deteriorating the municipality’s financial position.
Furthermore, the crisis engulfing Endumeni Local Municipality demands urgent and decisive action to restore stability and public confidence. Implementing the remedial measures outlined in the Section 106 report, alongside addressing the AGSA’s findings, is critical to rebuilding financial integrity and governance. Strengthening oversight mechanisms, filling key vacancies, and enforcing accountability will be pivotal in halting the cycle of mismanagement and ensuring sustainable service delivery.
Looking ahead, Endumeni must prioritise transparent reforms and robust leadership to navigate its precarious financial state. Community engagement and collaboration with provincial authorities will now be essential to chart a path towards recovery, safeguarding the municipality’s ability to serve its residents effectively and regain trust in its institutions.
With the above in mind, what are your thoughts? Share your views in the comment section below.
*If you have any questions or information on the matter, you are encouraged to contact the office of the KwaZulu-Natal CoGTA MEC*
4 Responses
These corrupt officials must be charged and jailed.. we need to see politicians in prison. State needs to employ stricter punishment for these criminals.
There is a reason why most government officials act with impunity. The rot of corruption is higher and deeper. Our rates and taxes are funding a growing cabal of incompetent morally corrupt officials who disregard law and regulations governing municipalities. They are responsible for suffering of many poor communities because of misappropriation of funds.
The DA talks about clean governance but it fails to address the fact that it has 2 DA (Democratic Alliance) councillors in Endumeni Local Municipality, named Naresh Gopie & Saleem Abdul who sit on EXCO & MPAC chairperson which are oversight roles to curb & expose such blatant corruption bt these 2 scoundrels sit by & allow this corruption to persist whilst thy also benefit from elicit tenders & look the other way. The DA is complicit in the degeneration of Endumeni & the rife corruption.
Our Drmocracy has marked the failure of our people to lead with honesty.
Really it is appaling to note such high corruption in our era of administration.
The enemy keeps laughing at us for our failure to lead the country.
Come on fellow Black South Africans, lead with honesty. Why are you mismanaging our economy like this?
NOTE: Whatever you do will be a blessing to you but not to your children you feed with money stolen from the poor taxpayer, the widow and the poorest of the poor.
Really you can do it successfully now, for your benefit. But not for your offspring benefit.
You steal the economy now, you create more poverty in future. Your generation will hunger.
Please take heed of this warning.