Tag: finances

Auditor-general calls Joburg’s bluff

The auditor-general’s office has called Johannesburg’s bluff. The City of Johannesburg gave a glowing account of the metro’s financial health, claiming increased capital expenditure and improved revenue, but it was a lie.

The office uncovered huge revenue losses, corruption, flawed procurement processes and weak internal controls – leaving city manager Trevor Fowler with no place to hide.

The city lost over R851-million on unauthorised water consumption. A further R308-million was lost due to “non-technical problems”.

The city lost R1.5-billion due to unauthorised electricity consumption and a further R742-million as a result of ” non-technical” causes.

Furthermore, several big power users – including luxury car dealerships, shopping centres and a hotel – have been implicated in an electricity meter-rigging scam.

The A-G’s report said Johannesburg was R15.4-billion in arrears.

Previously, Fowler had said the city’ s total revenue had increased by 13% to R39-billion, while its surplus had increased by 21% to R4.2-billion.

Chief financial officer Reginald Boqo also claimed that the city was on top of its billing problems.

He said of the R28-billion that was billed, R26-billion was collected.

The municipal public accounts committee found numerous causes of concern and berated the city’s internal audit committee for failing to identify and curb breaches in the protocol for the awarding of contracts.

Floyd Rikhotso, an audit manager at the auditor-general’s office, said the council would have to make several adjustments before the city could receive an unqualified audit.

Task team to deal with SABC’s financial mess

SABC465_3dA task team has been established to sort out the financial problems at the SABC, Communications Minister Yunus Carrim said on Tuesday.

“We have decided to set up a high-level team made up of the SABC, the department of communications, National Treasury, and the auditor general of South Africa to set a firm foundation for financial stability of the public broadcaster,” Carrim said in a statement.

“The team will ensure that all the challenges emanating out of the government guarantee targets are addressed within reasonable means and that the SABC is appropriately skilled at the right levels.”

This was a resolution informed by the progress made by the joint task team (JTT) set up two weeks ago between the department and the SABC.

Carrim and his deputy Stella Ndabeni-Abrahams met the SABC board and management on Tuesday to take forward issues discussed at a meeting on July 17.

In April, President Jacob Zuma approved the interim board, which was installed after the resignations of most of the previous board’s members in March, and its eventual dissolution by Parliament.

Their departure came after a reported clash between previous chairman Ben Ngubane and the board about the tenure of previous acting chief operating officer Hlaudi Motsoeneng.

At the meeting earlier this month, Carrim said the board and management had agreed to settle problems relating to digital migration and to urgently fill senior management posts.

Carrim said Tuesday’s meeting also took note of the progress made on Digital Terrestrial Television (DTT) readiness.

The JTT would continue to work to ensure the launch of DTT.

The SABC would launch a 24-hour news channel on August 1.

Carrim said a degree of consensus had been reached about the launch and how to deal with the outstanding finances, and legal and other aspects of the launch.

“South Africans need to have access to a constant stream of news, information and entertainment.

“The SABC has a responsibility to ensure that,” he said.

SABC board chairwoman Ellen Tshabalala said the national broadcaster was using the launch to fine-tune its readiness for the DTT launch.

“I am satisfied with the progress made in addressing the issues at the SABC.

“We remain committed to playing our full role in turning the SABC around,” she said. – sapa

Public works department in financial disarray

Financial chaos continues to dog the public works department, according to the Auditor General (AG).

This resulted in AG Terence Nombembe giving the department another disclaimer for the 2011/12 financial year — one of the worst audit opinions possible.

Nombembe said he could not rely on information provided by the department about, among other things, how many properties it owned and leased to sister departments and other state entities, and the accuracy of irregular, fruitless and wasteful expenditure.

“I was unable to obtain sufficient appropriate audit evidence to satisfy myself as to the completeness of irregular expenditure relating to the current year stated at R171,127,000 (2011: R1,396,000).”

The department’s financial statements indicated there was over R69 million in fruitless and wasteful expenditure.

Nombembe said he could not rely on this figure either, as the department did not have a system in place to identify this type of spending.

The lease problems at the department continued.

“I was unable to obtain sufficient appropriate audit evidence for operating lease expenditure transactions with an estimated value of R48,513,867,” said Nombembe.

Action against department officials accused of wrongdoing was lacking in various instances.

“Investigations have not been conducted into all allegations of financial misconduct committed by officials, as required by treasury regulations.”

As a result of this failure, disciplinary steps were also not taken against officials suspected of such conduct.

On the supply chain management side, the department was faring poorly by contravening treasury regulations and procuring goods and services of a transaction value higher than R500,000.

Nombembe took aim at officials who played a part in awarding relatives, friends, partners or associates lucrative public works contracts

Some of these officials had not been sanctioned for fraud and corruption.

The department’s leadership was criticised for not holding officials accountable for their actions.

“Instability in key leadership positions had a negative impact in providing effective leadership in the department.”

There have been various changes and turnaround plans in the department in the past few years.

Public works has had three ministers at its helm in the past two years following Cabinet reshuffles by President Jacob Zuma. – Sapa