uMshwathi Local Municipality in KwaZulu-Natal appointed Ayanda Vilakazi as its Chief Financial Officer (CFO) in August 2026, despite internal reports linking her (in her prior finance role) to a suspected scheme involving the diversion of more than R4 million in municipal funds since 2024.

The story was reported in detail by the Sunday Times (TimesLIVE) around 10–11 October 2026, with earlier coverage of the underlying fraud probe by EWN at the end of September 2026.

Background on the alleged theft

uMshwathi is a Category B local municipality in the uMgungundlovu District (KZN Midlands), covering areas including New Hanover, Wartburg, Dalton and surrounding rural villages. It has a relatively modest annual budget (around R300 million in recent reporting).

Standard Bank (the municipality’s banker since 2024) flagged potentially fraudulent transactions in July 2026. These involved payments (ranging from about R5,000 to R300,000 each) that appeared to be directed to legitimate creditors—most notably Eskom—but were sent to mismatched external bank accounts. Similar activity is believed to date back further (including the prior banking relationship with FNB).

An internal review by then-acting CFO Thenjiwe Mkhulisa found that many of the flagged payments lacked supporting documentation, could not be traced properly in the municipal financial system, and used fictitious accounting entries to mask discrepancies between the books and actual bank movements. The municipality has traced more than R4 million in total (EWN reported a figure of around R4.3 million potentially involved once a full forensic probe is complete). Police (SAPS commercial crime unit) are investigating payments to at least 10 accounts; one belonged to a municipal employee who resigned after the probe began. A former employee, Vishal Ramdhany, is named in reports as having initiated many of the payments before resigning.

The municipality reported the matter to SAPS, the Auditor-General, National Treasury and Cogta, and council approved an independent forensic investigation. Municipal manager Ralph Mafezwe Khanyile has publicly stressed that the municipality uncovered and reported the issues itself and is committed to accountability.

The CFO appointment and controversy

On the same day in early August 2026 that council received the internal report on the suspected fraud (and possible insider involvement), it voted to promote Vilakazi—an internal finance-unit candidate—to the permanent CFO post. Screening reports submitted to the provincial Cogta department for ratification did not disclose the fraud allegations or investigation.

Vilakazi is linked in internal records and the Sunday Times reporting to the scheme because, in her previous role, she is said to have authorised payments without proper supporting documents to incorrect account numbers and, as the senior official responsible for reconciliations, allegedly helped conceal the discrepancies through fictitious entries.

KZN Cogta MEC Thulasizwe Buthelezi has written a strongly worded letter seeking to reverse the appointment. He cited serious procedural defects, breaches of statutory recruitment timelines (shortlisting, interviews and competency assessments all delayed beyond the prescribed windows under the local government senior managers regulations), and the imprudence of appointing an internal candidate from the finance department while a forensic investigation into fraud/corruption in that department was underway. Cogta’s head of department separately directed the municipality to restart the recruitment process and request an external seconded acting CFO. As of the Sunday Times reporting, Vilakazi remained in the post; the mayor (Mandla Zondi) described related matters as “sub judice” and the municipal manager declined detailed comment on the provincial correspondence.

Broader context and status

This fits a wider pattern of financial-control weaknesses and irregular expenditure challenges faced by many South African municipalities, particularly smaller ones. The municipality maintains it acted promptly once red flags appeared and that neither the internal nor police investigations had formally identified suspects at the time of the appointment decision. Vilakazi and Mkhulisa did not respond to media queries in the Sunday Times report; Ramdhany declined to engage when contacted.

As of the latest detailed reporting (mid-October 2026), the police investigation, forensic probe, and provincial efforts to reverse or regularise the CFO appointment were ongoing. No formal charges against Vilakazi had been publicly confirmed in the coverage.