KOMANI, EASTERN CAPE — A major financial scandal has engulfed the Enoch Mgijima Local Municipality in Komani, with authorities investigating approximately R13 million in irregular pension payouts. The controversy involves nine human resources employees who allegedly fraudulently claimed early retirement benefits from the South African Local Authorities Pension Fund while continuing to draw full municipal salaries during the 2022/2023 and 2023/2024 financial years.
According to municipal leadership, the implicated staff members were uniquely positioned to exploit systemic vulnerabilities. All nine individuals worked within the HR department, managing pension fund withdrawals for the broader workforce. Investigators allege that seven of these employees successfully processed their own early retirement payouts, while the remaining two orchestrated and authorized the fraudulent documentation. By colluding across various levels—from clerks to management—the group reportedly fabricated resignations without the accounting officer’s knowledge, allowing them to remain active on the payroll even as the municipality continued paying their pension premiums.
The scheme unraveled when the South African Municipal Workers’ Union (SAMWU) noticed the anomaly of ongoing premium payments for employees who had ostensibly withdrawn their funds. Malibongwe Xhelisilo, SAMWU’s regional chairperson for the Chris Hani region, acknowledged that the workers accessed their pension funds but argued the incident exposes a profound systemic breakdown. Xhelisilo questioned how the individuals were reinstated into the payroll system in violation of fund regulations, emphasizing that both the employer and the employees share accountability. While noting that the municipal council had already discussed dismissal procedures on May 7, he insisted that a fair, transparent investigation is critical to ensure workers are given a proper opportunity to respond before final judgments are made. He further warned that such administrative loopholes could drain millions from the municipality over time.
Municipal Manager Apiwe Mkhangelwa condemned the actions, stating unequivocally that simultaneously drawing a pension and a salary from the same employer is “absolutely illegal.” Mkhangelwa confirmed that swift consequence management was triggered immediately after governance committees and the Auditor-General flagged the discrepancies. Detailing the progress of the internal disciplinary hearings, Mkhangelwa revealed that four of the accused employees have already been dismissed. Disciplinary hearings for three additional staff members are slated for the final week of August and the first week of September. The remaining two employees, who facilitated the illicit paperwork, have been suspended pending the conclusion of their respective cases.
Addressing concerns about how such a breach could occur, Mkhangelwa emphasized that the ongoing disciplinary actions are a foundational step in overhauling the municipality’s internal controls. He acknowledged that the fraud required coordinated effort but reiterated the institution’s commitment to self-renewal and strict adherence to governance standards. When directly questioned about financial restitution, Mkhangelwa confirmed that the municipality is actively pursuing the recuperation of the misappropriated funds.
The matter has also escalated to law enforcement. The provincial spokesperson for the Hawks in the Eastern Cape verified that a criminal investigation into fraud and corruption has been opened. The probe is currently in its initial phases, with detectives focusing on how the perpetrators manipulated municipal systems to bypass retirement protocols while maintaining their employment status.
Municipal officials have assured the public that all matters raised by oversight bodies are being addressed decisively to restore effective service delivery and institutional accountability.
