Citizens of Johnnesburg are paying for the city's misuse of public money. Photo: Delwyn Verasamy/M&G
This month, the City of Johannesburg was scheduled to deliberate on a submission that recommends to the council the certification of what they termed irrecoverable sums of R1.9 billion and R2.2 billion in irregular, unauthorised, fruitless and wasteful expenditure. In addition, they recommended that these two amounts be regularised by the council.
They attached a table that details the transgressions and the measures implemented to prevent future occurrences. What is concerning is how casually the authors of these submissions manage these matters. What does this mean for us, ratepayers of the City of Johannesburg?
These are billions in public funds spent outside the department’s approved supply-chain management policies, expenses incurred without authorisation by the council and expenses for which no value was derived.
We have been informed that some of these transgressions were a result of non-compliance with recordkeeping and failure to follow the approved procurement guidelines. One wonders if these were genuine mistakes or if they were done intentionally to avoid accountability. Regarding consequence management, the document indicates that some officials could not be held responsible because they had resigned at the time the audit findings were made.
This does not explain why the accounting officer did not apply section 32(6) of the Municipal Finance Management Act, which requires them to report such cases to the police. It is unclear how many of these transgressions have been referred to law-enforcement agencies over the seven-year period in question. Why was the document management system not improved, given that some of the failures in management were flagged as far back as the 2017-18 financial year and the same contraventions were identified in subsequent years?
The R2.2 billion in unauthorised expenditure was the council spending money it did not actually have. If this is not considered criminal, one might wonder what does qualify as financial crime. When someone overdraws on their personal account, they tap into an overdraft facility they have arranged with their financial institution. It is an interest-bearing loan that must be repaid. The council will, I guess, turn to the treasury for support — or will they raise these funds from ratepayers?
Recently, Minister of Finance Enoch Godongwana wrote to the mayor of Johannesburg, raising concerns about their finances, which underlines that the city’s situation has become critical. The implication of this is that citizens are being shortchanged on services they pay for monthly. It means they will continue to see poor maintenance of the city’s infrastructure, including water, electricity, roads and public spaces.
The irregular expenditures were never subject to value-for-money testing mechanisms. It might also mean the city was overcharged on most of those R1.9 billion expenditures.
Phumla Williams is a member of the Ahmed Kathrada Foundation board.