Independent Newspapers
Durban’s former city manager Michael Sutcliffe. Photo: Nqobile Mbonambi
Durban – Several senior eThekwini Municipality employees pocketed more than R20 million in “market allowances” over three years, but no documented proof existed to justify how these amounts had been derived.
Market allowances are special payments made to highly skilled staff to prevent them from being poached.
The full version of the Manase report, released by the Department of Co-operative Governance this week, said that these “market allowances documents” were undated and unsigned.
“The origin of certain resolutions of the executive committee, relating to the awarding of market allowances, could not be positively identified,” the report said.
Former city manager Michael Sutcliffe, who was himself paid a R1.1m market allowance over three years, motivated in council documents, that these allowances should be paid to recruit and retain employees with scarce skills.
On Wednesday, Sutcliffe told The Mercury that Manase investigators never came back to him to request information or documents.
“I am rejecting these things outright. I would have had to sign off on any market allowances and there were proper approval processes and documents available to substantiate this,” he said.
Investigators claim one such document titled: List of Senior Management to Provide Retention:
* Was undated.
* Had no amounts listed.
* Had no explanation indicating how managers’ performance scores were given
.
A confidential council document, dated November 2008, and annexed to the Manase report, said that the city had requested the auditing firm, Deloitte, review the city’s senior management and executive salaries against private sector remuneration and had found that they lagged behind.
It was decided that market allowances should be paid, instead of pensionable increases, according to the range that was approved by the executive committee.
This apparently saved the city R67.9m.
The benefits were that the allowances could be reviewed annually, were not permanent and did not impact on pension payments.
In the same correspondence, Sutcliffe said that retaining senior management was not easy.
“We believe that the market allowances paid are fair and have saved significant resources,” he said.
The investigators found no evidence to suggest Sutcliffe acted irregularly or beyond council mandate but they recommended that a policy be developed to deal with all aspects of the contracts in future.
The investigators also recommended that no further market/scarce skills allowances be paid until the council had approved the appropriate policies.
Sutcliffe said on Wednesday that, contrary to what the report said, there was a broad scarce skills policy. But, for executive management, there needed to be an independent committee to review their remuneration.
“At the time, the city was dealing with a lot of professionals such as engineers and architects being poached and that is the context in which the market allowances came about,” he said.
The scarce skills allowances policy matter is yet to be resolved and has been an “outstanding matter” on the municipal’s exco agenda for a year.
City spokesman Thabo Mofokeng said the human resources and governance cluster had been given until next month to finalise a report on the allowances. It could not be established whether the municipality had stopped allowance payments until a policy had been approved.
* The allowances above R500 000 paid between July 2008 and June 2011:
AJ Dold R596 638.44
AM Peters R689 532.48
FB Stevens R538 538.04
NA Macleod R799 155.36
S Harilal R506 605.68
RL Gooden R512 730.72
J Parkin R506 605.68
MO Sutcliffe R1 145 022.12
D Naidoo R 630 299.52
JM Ellingson R 528 553.80
K Aswanth-Kumar R 727 026.48
RS Maphumulo R 650 951.64
The Mercury
