Delays in finalising disciplinary hearings of senior managers will cost municipalities

This article discusses the process of enforcing consequence management against senior managers alleged to have committed financial misconduct, as well as the consequences for not enforcing discipline within the prescribed timeframes.

What is consequence management?

Consequence management refers to the ‘processes and controls that should be in place at a municipality to ensure that it consistently and timeously complies with legislated responsibilities’ (Auditor General: 2025: 93). These processes and controls are put in place to detect transgressions, implement corrective measures for wrongdoing, and where necessary, impose penalties against wrongdoers (National Treasury: 2022: 9). The legislative framework applicable to local government guides the municipal council and the accounting officer on what consequences ought to follow when wrongdoing takes place within municipalities. Consequence management aims to achieve two objectives: (a) to enforce accountability for wrongdoing; and (b) to deter others from behaving in a like-minded manner and disregard legislation. Therefore, consequence management strengthens the institutional environment of, and reduces adverse consequences to, municipalities’ governance processes and service delivery outcomes.

The challenge of consequence management in municipalities

The Auditor General has consistently cited the lack of consequence management in municipalities as impeding municipalities from improving their financial performance and service delivery outcomes. According to the Auditor General, municipal managers and other senior management officials "face limited consequences when they underperform" (Auditor General: 2025: 50). This challenge stems from the culture of non-compliance with key legislation to enforce consequence management. During the 2023/24 financial period, 206 municipalities (83 per cent) did not comply with legislation in general, while 132 municipalities (53 per cent) did not comply with legislation on consequence management (Auditor General: 2025: 9). Non-compliance with legislation on consequence management, in turn, contributes to either no, poor or delayed responses to investigating allegations of misconduct, including financial misconduct. In such a climate, the misconduct and concomitant financial losses and resource wastage are likely to persist, ultimately contributing to increased irregular expenditure and adverse service delivery outcomes.

The process of holding senior managers accountable for allegations of financial misconduct

A senior manager commits an act of financial misconduct if he or she deliberately or negligently fails to execute a delegated duty, contravenes or fails to comply with a condition of the delegated power or duty, makes an unauthorised, irregular, or fruitless and wasteful expenditure or provides incorrect or misleading information to the accounting officer (section 171(3)(a) – (d) of the Local Government: Municipal Finance Management Act 56 of 2003).

If an allegation of financial misconduct is raised against the accounting officer, chief financial officer, senior manager or any other municipal official, the municipality must launch an investigation, unless those allegations are frivolous, vexatious, speculative or obviously unfounded. If the investigation warrants such a step, then disciplinary proceedings should follow after the investigation is finalised (section 171(4)(a)-(b) of the MFMA).

The purpose of the disciplinary proceedings is fundamentally to implement corrective measures and not to punish the wrongdoer (Reg 3(1)(a) of the Local Government: Disciplinary Regulations for Senior Managers, 2010). The municipal manager (i.e., the accounting officer) is responsible for the financial administration of a municipality and must for this purpose take all reasonable steps to ensure that disciplinary, or when appropriate criminal proceedings, are instituted against any official of the municipality who has, among other things, allegedly committed an act of financial misconduct (section 62(1)(e) of the MFMA). To this end, the municipal manager must table a report with the allegations of financial misconduct against a senior manager in the council within 7 (seven) days after receipt thereof.

To ensure fairness, disciplinary proceedings cannot commence without a full investigation, unless exceptional circumstances warrant departure from this rule (Reg 3(4) of the Local Government: Disciplinary Regulations for Senior Managers, 2010). If the council is satisfied that there is reasonable cause, the council must, within 7 days, appoint an independent investigator to investigate the allegation. The investigator must submit a report, along with his or her recommendations, to the municipal manager within 30 days. A special sitting should be convened within 7 days after receipt for consideration by the council (Reg 5(5) of the Local Government: Disciplinary Regulations for Senior Managers, 2010). After considering the report, the municipal council is obliged to adopt a resolution to initiate disciplinary proceedings against the senior manager. When this happens, the senior manager will generally be subjected to a precautionary suspended on full pay, to avoid any interference with the investigation.

Such resolution should indicate whether the alleged misconduct is deemed serious or not and authorise the municipal manager to, among other things, appoint an independent and external presiding officer and officer to lead evidence (Reg 5(7) of the Local Government: Disciplinary Regulations for Senior Managers, 2010). Allegations of financial misconduct are deemed as serious misconduct. Thus, in such instances, the officer leading evidence must, within 30 days of his or her appointment, formulate and serve the charge sheet containing the allegations of financial misconduct, together with a notice of the disciplinary hearing, to the senior manager.

Thus, the Local Government: Disciplinary Regulations for Senior Managers, 2010 afford municipalities approximately 81 days to consider the allegation, launch an investigation, consider the findings, initiate disciplinary proceedings and effect service of the notice of disciplinary hearing and charge sheet on the senior manager.

The timeframes for finalising disciplinary hearings of senior managers

In terms of Reg 10(1) of the Local Government: Disciplinary Regulations for Senior Managers, 2010, the disciplinary hearing must commence within 3 months of adopting the resolution to initiate the disciplinary proceedings; and on a date not less than 7 and not more than 10 days from the date of service of the notice and charge sheet on the senior manager. Regulation 3(3) of the Local Government: Disciplinary Regulations for Senior Managers, 2010 demands that disciplinary hearings be conducted within the shortest possible time. The officer leading evidence commences the disciplinary hearing by reading out the charges to the senior manager.

Thus, disciplinary proceedings, including the disciplinary hearing, are ordinarily expected to be finalised within 5 months. This is to ensure that there is finality in the proceedings and to minimise to bring stability in the municipal administration either by ensuring that innocent individuals return to office as soon as reasonably possible or to avoid leadership vacuums in their positions for indefinite periods.

The consequences of delays in finalising disciplinary hearings of senior managers

Protracted disciplinary hearings can adversely impact the nature of the proceedings: witnesses’ memory may wane over time; employees may have moved on and found alternative employment; and the municipality will incur additional financial losses due to extended periods of officials being suspended on full-pay. Importantly, protracted disciplinary hearings may have the effect of rendering the disciplinary process procedurally unfair, constituting a ground for the suspension to be lifted, alternatively, set aside by a court. This happened in Tshabalala v Moqhaka Local Municipality and Another.

In this case, Ms Tshabalala, the former municipal manager, was suspended pending an investigation into alleged misconduct regarding financial mismanagement. According to Regulation 6(6)(a) of the Local Government: Disciplinary Regulations for Senior Managers, 2010 (the Regulations), if a senior manager is suspended, a disciplinary hearing must commence within three months after the date of suspension, failing which the suspension will automatically lapse. Ms Tshabalala was, however, served with a notice to attend a disciplinary hearing, along with the charge sheet, on the final day of the three-month suspension period. After the three month-period passed, Ms Tshabalala returned to work, contending that her suspension had lapsed. The crux of the issue related to whether the disciplinary hearing could take place after the three-month suspension period. She approached the Labour Court, arguing that continuation of her suspension beyond the three-month period was in breach of her employment contract, as well as the Regulations. The Labour Court had to determine when the disciplinary hearing commenced and found that the disciplinary hearing commenced upon the service of the disciplinary charges and the notice of the disciplinary hearing.

However, on appeal, the Labour Appeal Court overturned the Labour Court’s decision, finding that "[w]hile disciplinary proceedings in a broad sense may commence with the service of a charge sheet, the Regulations contain an internal definition of the point at which a disciplinary hearing commences… Regulation 6 provides that if a senior employer is suspended, the disciplinary hearing must commence within 3 months of the date of suspension" (at para 6). Therefore, the Labour Appeal Court held that the disciplinary hearing did not take place within 3 months of the date of her suspension, leading to the lapsing of her suspension. The Court ordered for her to be reinstated with immediate effect, and that the municipality pay the costs of the application.

Conclusion

Effective consequence management is necessary to cultivate a culture of developmental government, ethical leadership and sound financial management in municipalities. Disciplining municipal employees for misconduct or non-compliance with key legislation is an essential condition to promote consequence management and deter wrongdoing in municipalities. The discussion in this article highlights that municipalities are, in turn, also obliged to adhere to legislation and regulations when they seek to discipline municipal employees. The Local Government: Disciplinary Regulations for Senior Managers, 2010 imposes an obligations on municipal councils to attend to disciplinary hearings as soon as possible but within 3 months after the date of suspending a senior manager. Exceeding this timeframe will result in initial resources and investigative efforts being wasted, as municipal councils will be debarred by Regulation 6(6)(b) from extending it, affording the affected municipal employee the remedy of being reinstated. To this end, municipalities will be forced to continue to continue to employ municipal employees who may be alleged of serious having committed serious financial misconduct. Therefore, to avoid this risk, municipal councils should adopt and adhere to clear standard operating plans that will enable them to conduct and finalise disciplinary hearings within the prescribed timeframes.

By Jennica Beukes, Doctoral Researcher

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