5.1 The main thrust of issues identified by the PEC to intervene in the administrative affairs of the Nala Local Municipality related to the failure to comply with Municipal Systems Act by submitting section 46 reports for two consecutive years; failure to adopt and submit the annual performance reports for 2005/06, 2006/07 and 2007/08; failure to develop and adopt a Performance Management Framework to regulate staff performance; absence of performance agreement between the Mayor and the Municipal Manager; failure to formally approve the performance management system, failure to co- ordinate Integrated Development Planning (IDP) processes and appoint the IDP manager and the inability to spend Municipal Infrastructure Grant (MIG) funds. The overall financial management of the Municipality is in disarray, given the inability of the Auditor-General to access documentation for audit purposes.