Tshwane CFO challenges dismissal

Embattled City of Tshwane CFO Umar Banda’s urgent application asking the Pretoria High Court to set aside his dismissal and restore him to his position will be heard on Thursday (21 December).

At the centre of the dispute is the city’s audit outcome, which is normally only made public in January. According to an expert, it looks fairly certain that it will be qualified but it is not yet clear to what extent.

Banda has been accused of failing to ensure that the financial statements submitted to the auditor-general were compliant with the law, and misleading the city leadership into thinking they were.

The city has been suffering a severe liquidity crunch over the past year and was unable to pay Eskom on time every month for its bulk electricity purchases –despite a strict collections drive that saw government departments and businesses being disconnected for failing to pay their electricity bills.

Member of the mayoral committee Peter Sutton has stated that it may take three years to turn the city’s finances around.

Extension, suspension, dismissal 

This drama saw the Tshwane council on 24 November approving a third extension to Banda’s employment contract to 31 March 2023 – but instead of supplying him with an amendment to give effect to the resolution, city manager Johann Mettler served him with a suspension notice on 1 December.

This was withdrawn the next day and replaced with a notice of dismissal with immediate effect. The city did however offer to pay him for the rest of the month.

Banda has been in charge of the city purse since 2017 and his five-year contract ended on 30 June.

The council extended his contract for three months – twice. Each time he was provided with an addendum to his contract to give effect to the extension.

These extensions come to an end on 31 December. The council recently advertised the vacancy and Banda says he plans to apply. In the meantime the council approved the further extension to 31 March.

A mere seven days later Mettler served him with a notice of suspension, stating that he has brought the city into disrepute through his deliberate or negligent failure to submit compliant financial statements. Thereby, states the letter, he has perpetrated financial misconduct.

Banda says in his court papers the council failed to follow any disciplinary process and did not give him an opportunity to make representations before he was suspended. He was forbidden from entering any council property and had to hand in his laptop and access card. The next day, when the suspension was withdrawn and he was summarily dismissed, no further reasons were given.

He argues that the dismissal is unlawful because there is no lawful reason for it, no proper process was followed, and the council is unaware of it and in fact extended his contract to 31 March.

He says in his court papers that being dismissed for financial misconduct will have a devastating effect on his career. Municipal staff who are dismissed for financial misconduct are blacklisted and may not be employed in any municipality in South Africa for 10 years.

Ronald Oppelt, divisional head for labour relations management at the City of Tshwane, concedes in an answering affidavit on behalf of the city that the dismissal was unlawful, but says it makes little difference.

The city was going to pay him until 31 December when his contract runs out anyway.

According to Oppelt the further extension by the council was merely an authorisation – and once Mettler became aware of the non-compliance of the financial statements, the city decided not to implement the authorisation.

He argues that Banda has no oral or written agreement of employment beyond 31 December and any such extension would have been unlawful anyway. The council is prepared to pay him up to that date, but does not require Banda to come to the office.

Audit outcome

Leon Claassen, an analyst at Ratings Afrika, says non-compliant financial statements point to a qualified audit outcome.

The level of qualification is not yet clear. It may be a straight disqualification, or an adverse opinion, which is worse.

If the statements are so incomplete that Auditor-General Tsakani Maluleke cannot form an opinion, she may even issue a disclaimer.

Read: ‘No improvement’ in municipal management in 2021: Auditor-General [Jun 2022]