Walter Platjie, the embattled manager of the IFP-controlled eDumbe municipality, has been suspended over charges of maladministration, corruption and fraud.
Platjie is accused of having overpaid himself R75000 over three months on top of his monthly salary of R28000. He has also been accused of awarding tenders to white friends who do not bid for the contracts.
Chief financial officer Johann Scott resigned before his contract ended while investigations were under way.
eDumbe mayor Soweto Mncube confirmed the probe.
"But I cannot comment further because the matter is still under investigation," he said.