For 10 months, Nelson Mandela Bay’s acting CFO, Jackson Ngcelwane, refused to sign his appointment letter as he was earning more in his previous post than the salary attached to the top finance boss job he had long been pursuing.
As a budget and financial accounting senior manager for budget and treasury, Ngcelwane was taking home R109,847 more per annum than the maximum package permitted for a category eight municipal CFO — despite holding a lower-ranking position.
As a senior director, Ngcelwane’s salary contradicts the R2.39m upper limit for the post stipulated in a May 2024 government gazette.
His appointment would also be permanent and not the usual five-year contract for executive directors.
There are 11 other officials in the budget and treasury department earning above the threshold.
The council was meant to consider a proposal to waive the prescribed remuneration limits to accommodate his new package.
However, by the time of publication, the report had yet to be tabled.
It is understood that Ngcelwane signed an appointment letter, but not a contract.
Ngcelwane wrote a letter in July outlining his grievances with the proposed salary.
A majority of the council voted in favour of his appointment during a January council meeting.
Co-operative governance MEC Zolile Williams confirmed compliance with the decision on March 24.
In a confidential report discussed behind closed doors, acting city manager Lonwabo Ngoqo said there had been engagement with Ngcelwane on the offer, with the latest being on July 7 and July 8.
Ngoqo said Ngcelwane had raised several issues with his remuneration package, including that he would take a financial knock if appointed at the regulated package.
“In essence, the incumbent’s total cost remuneration package in the position of senior director of budget and financial accounting is above the maximum notch of the total remuneration package of senior managers or executive directors reporting to the city manager,” Ngoqo’s report said.
The report said the offer had been accepted in principle.
The report notes that Ngcelwane’s current salary exceeds the upper limits set in the government gazette for municipal managers and those reporting directly to the city manager.
It cites clause 14(4) of Gazette 50737, which allows a council, in exceptional circumstances and with MEC consultation, to request a ministerial waiver of the prescribed requirements.
The report also refers to internal remuneration levels and benchmarks with Cape Town and Buffalo City when comparing senior management packages.
“The incumbent has been employed by the institution since 2012 at a managerial level, both as deputy director [July 2012] and in senior director [June 2016] and a direct report to the chief financial officer,” Ngoqo wrote.
“This equates to more than 13 years at a managerial level, and [he] has achieved a competent level and is compliant with minimum competency requirements as prescribed.
“The employee should not be worse off in relation to protection of salary or diminish professional status by legislative prescripts due to the change in employment.”
He said the city had a responsibility to attract and retain committed professionals.
In a July letter seen by The Herald, Ngcelwane said the municipality should bear in mind that he would be appointed permanently — unlike the previous CFO.
“The difficulty with the Section 56 salary package is that it is all-inclusive, meaning one must take care of pension fund, medical aid, a 13th cheque, car allowance, etc,” he wrote.
“As the appointment of a Section 57 employee permanently in our municipality is happening for the first time, I took the liberty of making inquiries with one municipality — the City of Cape Town — where it was confirmed that part of the total cost to company includes benefits such as pension fund and medical aid, in recognition of the permanent nature of the position,” he said.
Ngcelwane said he was willing to accept the mid-to-maximum range of the gazetted upper limits, noting his 13 years of service in the municipality.
“I recommend that the employer continues contributing towards the pension fund, long service bonus, 13th cheque and car allowance, until retirement,” he wrote.
“I recommend that the employer releases or settles the leave days available as at the date of contracting, when the new contract kicks in.”
Budget and treasury political head Khanya Ngqisha said he supported the move because he was happy with Ngcelwane’s performance.
“So far, I’m happy,” Ngqisha said.
“He’s not a perfect human being, but I can say so far, there’s no reason not to support him.
“I mean, the financial health of the municipality, as you know, the National Treasury has rated us as having a sound financial health, and it’s due mainly to his leadership and what he does.
“This is what happens when you’ve been around long in the municipality. Your salary scale goes up because there are these increments and so on.
“So, obviously, it does not make sense for someone to go to a higher position that earns less than what he was earning before.”
For the 2023/2024 financial year, the city suffered a setback in its audit opinion outcome, after achieving an unqualified opinion for the first time in 12 years in the 2022/2023 financial year.
Part of the 2023/2024 findings were several material misstatements in the financial statement submitted.
Ngcelwane took over during the last quarter of the 2023/2024 financial year, following former CFO Selwyn Thys’s resignation.
Currently, the metro has been battling to write off its unauthorised, irregular, fruitless and wasteful expenditure (UIFW), which is sitting at R24bn.
The city is facing threats from the National Treasury to withhold its equitable share tranche for December over its failure to address the UIFW.
During the meeting, the council wrote off R1.8bn.
The Herald
