A forensic report into one of the municipalities that invested millions of rand of public money into the collapsed VBS Mutual Bank has recommended that the municipal manager be suspended for three months without pay.

But the municipality has rejected the findings.

The sanction comes after Ephraim Mogale municipal manager Monica Mathebela pleaded guilty to three of five charges, including misconduct for contravening sections of the Municipal Financial Management Act (MFMA), during a disciplinary hearing.

She has been on suspension with full pay since December.

According to the 39-page report compiled by Advocate Jimmy Hlongwane, who chaired the hearings, the investigators further recommended that Mathebela be ordered to attend short courses in "management, investment and finance in order to sharpen her management skills, particularly in investment".

The Marble Hall municipality had invested R82m into VBS.

"Mathebela negligently failed to ensure that the municipality didn't deposit money with an institution that is not registered as a bank in terms of the Bank Act. As an accounting officer, she failed to enforce compliance with section 7 of the MFMA ... wilfully failing to exercise oversight in regard to compliance by the accounting officer when the investment was made," reads Hlongwane's report.

"The question is, why should Mathebela be punished for gross financial misconduct committed by [the] chief financial officer?

"She was misled by someone skilled, a person who could have advised her correctly before she authorised the investment transaction.

"I took into account that she pleaded guilty, showed remorse and didn't prolong the disciplinary hearing unnecessarily," he said. Mathebela referred Sowetan to the municipality for comment.

However, acting municipal manager Makoko Lekola said: "The report was tabled in council last week. The council resolved that it will take the report for review [at the Labour Court]"

Premier Stan Mathabatha's spokesperson Kenny Mathivha said the remedial action for suspension without pay was not lenient.

"Three months suspension without pay is [a] huge punishment because those officials will not have access to their luxury as they used to.

"However, the premier's office met with the Hawks last week to get an update on their investigations, which are under way," he said.

Hawks spokesperson Brig Hangwani Mulaudzi confirmed the investigations were still under way. DA councillor Flip Jacobs said a three-month suspension without pay would be a slap on the wrist.

"The report clearly implies that the former mayor (Bela Kupa) instructed the former CFO (Kgabo Ramosidi) to invest money in VBS. The municipal manager was the person who ultimately signed off on this investment as she is the accounting officer," he said.

Kupa resigned while Ramosidi was dismissed.