KOMANI, EASTERN CAPE — Serious questions have been raised regarding alleged irregular pension payouts at the Enoch Mgijima Local Municipality in Komani, where nine employees are implicated in a scandal involving approximately R13 million. The controversy centers on claims that these staff members received early retirement benefits from the South African Local Authorities Pension Fund while continuing to work for the municipality and collect full salaries during the 2022/2023 and 2023/2024 financial years.
According to reports, the nine implicated individuals all belong to the municipality’s human resources department, specifically handling pension fund withdrawals for employees. Seven of the employees allegedly benefited from the early retirement payouts, while the remaining two are accused of facilitating and authorizing the paperwork that released the funds. Municipal officials state that this internal positioning allowed the group to collaborate and fake resignations without the knowledge of the accounting officer, effectively bypassing internal control systems.
The irregularities were brought to light after the South African Municipal Workers’ Union (SAMWU) flagged that the municipality was still paying premiums for employees who had supposedly withdrawn their early pension funds. Malibongwe Xhelisilo, SAMWU regional chairperson in the Chris Hani region, emphasized that while the employees did withdraw the funds, the situation points to a much larger systemic failure.
Xhelisilo raised critical questions about how these individuals were re-entered into the payroll system despite pension fund rules, noting that both the employees and the employer bear responsibility. He stressed the necessity of a fair and thorough investigation, pointing out that while the municipal council discussed dismissals on May 7, workers must still be afforded a fair process and the opportunity to present their side. Xhelisilo warned that the financial impact of such systemic loopholes could cost the municipality millions over the years.
In response to the unfolding scandal, Enoch Mgijima Municipal Manager Apiwe Mkhangelwa confirmed that drawing a pension while simultaneously drawing a salary from the same entity is “absolutely illegal.” Mkhangelwa stated that the municipality immediately initiated disciplinary processes once the matter was flagged by governance committees and the Auditor-General.
Mkhangelwa provided an update on the consequence management efforts, revealing that four of the implicated employees have already been dismissed following recent disciplinary verdicts. Hearings for three other employees are scheduled for the last week of August and the first week of September. The final two employees, who allegedly facilitated the fraudulent paperwork, have been suspended pending the final outcome of their cases.
Addressing concerns about systemic vulnerabilities, Mkhangelwa explained that the consequence management currently underway serves as a reinforced internal control. He noted that the fraud required collaboration spanning from the clerk level up to management, but affirmed that the municipality is committed to renewing its governance posture. When pressed on whether the municipality intends to recover the lost funds, Mkhangelwa gave a definitive confirmation that steps are being taken to recuperate the monies.
Law enforcement has also intervened. The provincial spokesperson for the Hawks in the Eastern Cape confirmed that investigations into the alleged fraud and corruption are currently underway and at an initial stage. Authorities are focusing on how the municipal systems were manipulated to allow these employees to lapse their retirement statuses while remaining active on the payroll.
The municipality has assured the public that all matters raised by oversight bodies are being addressed decisively to restore effective service delivery and accountability.