Twenty-eight female guards were unfairly dismissed by a security company because the client‚ Metrora.
The PAC said yesterday their action was informed by the municipality's annual dismal performance.
The municipality received a disclaimer from the Auditor-General for the 11th year since it was formed in 2000.
"The performance of this municipality shows that there is a sense of incompetence among its managers. We therefore call on the premier to put the municipality under administration or replace the municipal manager, the chief financial officer and manager in the supply chain management," said PAC provincial spokesman Aubrey Ngwatle.
Ngwatle said the decision was taken at the party's strategic meeting in Polokwane on Saturday.
The province has 30 municipalities, with only two - Fetakgomo local municipality and Waterberg district municipality - having received a clean audit.
Municipality spokesman Willy Mosoma yesterday said it had already fired manager Samson Makunyane, chief financial officer Thandiwe Lengwati and human resources manager Magomarela Hlakudi a fortnight ago for being unable to provide good leadership. The council has appointed Mapula Mokoko as the new manager.