The City of Johannesburg is concerned about the manner in which certain reports are put to the public on the issue of its municipal-owned entity, City Parks (JCP), which is tantamount to casting aspersions and doubt about the prudence with which the municipality handles its public affairs.

It is important to clarify that actions of the City of Johannesburg (CoJ) on the City Parks issue relate to a process within the City Parks Board of Directors, with whom the fiduciary responsibilities of JCP are entrusted. The Board could not reach consensus on how the issue presented to it should be handled.

Ordinarily, if a board does not agree or find consensus on an issue, as covered in its articles of association, the matter would be put to a vote. However, the contentious matter cannot be left to in limbo due to inadequate consensus.

The City does not have space for any impropriety from its staff. Matters alleged to fall into such a category have to be investigated in accordance with the provisions of the Municipal Finance Management Act (MFMA). This process is undertaken to ensure that a conclusive outcome is reached on any matter at hand.

When such a process is still underway, it is important that evidence and related documents be handled in a confidential manner. This a standard approach at all organizations including government and private enterprise. It is therefore unfortunate that an internal report on an ongoing investigation at City Parks was unofficially passed on to the media before the conclusion of a proper due process. This may have been prejudicial to certain individuals.

The facts of the matter are:

• In 2009 the City Manager received a number of anonymous complaints about certain practices and management style of running the City Parks business.
• In accordance with the MFMA the City Manager instituted an investigation, first through the internal Audit and Risk Department, which confirmed that there might be merit in some of the allegations. A thorough investigation was then commissioned and undertaken by a reputable forensic audit company Edward Nathan Sonnebergs (ENS). The company concluded that there were several areas of improper conduct in the running of the business.
• Accordingly, and in terms of the governance protocols between the city and the company, the ENS Report was referred to the Board of Directors for appropriate attention, noting the veracity of the allegations therein.
• The board assigned the matter to its Audit Committee.  The latter felt that another investigation was needed to verify the allegations. At the same time, another report was generated by representatives of management addressing in the main, some of the allegations in the ENS report. It is important to emphasize that the weight of all these reports had to be balanced by the Board after which a clear resolution of the matter should have been crafted. As best as we can tell, that did not happen.
• The subsequent report was provided to the City Parks audit committee and eventually to the Board. The Board, as the primary authority over administrative matters in the company, was unable to come to a definitive conclusion on what to do with any of the findings. Ultimately, the matter was referred to the City manager with a request to have the matter closed.

Earlier last week, we issued a statement that there was a need to engage the Board on how the matter had been handled and to consult further on the matter. The City of Johannesburg, as the sole shareholder, decided that there was a need to do the following:

1. That an experienced labour lawyer, Mr. Charles Beckenstrater from the firm Moodie and Robertson, to be instructed to assess the investigation reports with a view to advise and make recommendations to the City on the following:

1.1 Whether the Managing Director of JCP or any other manager or official at City JCP should be charged with misconduct

1.2 If so, what the charges should be and to draw up the charges

1.3 If the investigation reports do not justify the bringing of charges, the reasons for that conclusion

1.4 Whether the conduct of the Board and the Chairperson of the Board in particular in dealing with the investigation and directives from the shareholder were inappropriate.

2. It is intended that the attorney should provide an independent assessment of the existing investigations, which may include interviewing key individuals to clarify certain points, but does not constitute a disciplinary hearing in itself. The objective of this assessment is to make recommendations to the City on the way forward.  The Terms of Reference of the assessment will be clarified and finalized in consultation with the attorney.

3. All relevant documentation was delivered to the attorney on Friday 19 February and further discussions took place during the course of Monday, 22 February with a view to determine the estimated duration of the assessment.  

4. The City therefore invites any person or structure that believes they can enhance this process to make representations directly to the verification lawyers. It is advisable to present such information in person rather than through anonymous documentation. Beckenstrater can be reached at 7th floor UCS Building 209 Smith Street Braamfontein.

In the meantime, the City of Johannesburg resolved on Thursday 18 February that the Chairperson of the Board Griffith Zabala and the MD Luther Williamson will be asked to recuse themselves from their responsibilities at JCP to facilitate the verification exercise and not allow the risk of possible interference or lack of co-operation to impede the objective outcomes envisaged.

At this stage, no disciplinary measure is being taken and the city's approach will be guided by the evaluation from the newly appointed independent law firm indicated above). It is important to get the process right rather than rush through recklessly as the results could adversely and unfairly place a number of careers at stake.

The perception that the City has not acted on the report(s) is distorting the reality that the governance protocols that require Board of Directors, entrusted with the fiduciary responsibilities for the company, to be given the space and latitude to act accordingly. Whatever the views of the City, it has always been necessary to allow the Board to take control of the business processes of the company.

The City's process complies with management principles and cannot be scuppered by demands that are not adequately substantiated.

At this juncture, the City has made no pronouncement on the veracity of any of the allegations - save to take them through the independent verification process. While this may sound like a perpetual investigation, it is important to unpack why the Board of Directors was unable to conclude the matter satisfactorily. The independent lawyers will provide the City with an objective assessment.

Statement issued by Public Liaison Department on Behalf of Mavela AV Dlamini, City Manager, City of Johannesburg, February 24 2010

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