Scopa heard that the City of Johannesburg has had challenges on issues of financial health and for a number of years had challenges where there was not enough funds to maintain infrastructure and make investment for new infrastructure.
THE Office of the Auditor-General said on Wednesday that the City of Johannesburg (CoJ), which has either been on an upward trajectory or regressed in recent years, was currently stagnant in terms of audit outcomes.
Auditor General South Africa’s business unit leader in Gauteng Dumisani Cebekhulu said their office was not seeing an improvement on audit processes.
Cebekhulu said from a culture shift point of view, they acknowledged the areas of focus are on the financial health of the city.
“We have noted for a number of years that the City has had challenges on issues of financial health. This is one matter we are elevating to the committee.
“This talks to how the CoJ as a metro has for a number of years struggled with issues of collection of debt, revenue and dealing with compliance-related matters,” he said.
Cebekhulu was briefing the standing committee on the audit outcomes of the CoJ in Parliament.
Scopa was to be briefed about the audit outcomes of the City of Tshwane, Buffalo City Metro and the Alfred Nzo District Municipality.
The Special Investigating Unit was to make a presentation on investigations it conducted in the CoJ and Tshwane.
Cebekhulu said the City has continued for a number of years to have challenges with infrastructure.
This related to the city being without enough funds to maintain infrastructure and there being no investment for new infrastructure.
“This then creates challenges when it comes to actual service delivery,” he said.
“We noted challenges due to poor collection as it relate to some of the key entities, the Joburg water and Joburg City Power, which are revenue generating entities. This affected the overall health status of the city.”
Cebekhulu told the MPs that the CoJ and its 12 entities obtained an unqualified audit with findings.
Only the Joburg Market and Joburg Theatre obtained a clean audit opinion from the Auditor-General in the 2023-24 financial year.
“This positions the city well in terms of these to see how other entities can learn the best practices from these two entities.”
Cebekhulu also said they had shared with the CoJ management that the city should strengthen its internal control processes, and should relook at its service delivery model.
“We don’t have a specific view on how the city should be structured.”
Cebekhulu also noted that the city continued to struggled with irregular expenditure.
The closing balance on irregular expenditure has increased from R8.8 billion recorded in 2019-20 to R11.1 billion in the 2022-23 financial year.
Of the total amount, 58% had not been dealt with, only 42% was written off and zero was recovered or condoned.
This was blamed on the lack of proper disciplines and compliance monitoring by management within the supply chain unit, improper delegation of power in entering contracts and compliance not monitored to identify and prevent instances of procurement processes not followed.
Cebekhulu added that CoJ continued to have a challenge as it related to internal control.
“It is city that has huge irregular expenditure and non-compliance issue. It is a city that is having serious challenges with regards to infrastructure
“It limits or affects the city as it relates to fulfilment of its mandate to provide services to the residents.”
mayibongwe.maqhina@inl.co.za