Today, the tabling of the Auditor-General’s (AG) consolidated general report on the 2015-16 municipal audit outcomes confirms years of rampant maladministration witnessed under the previous ANC-led government.
Under the previous administration’s leadership, the AG found that the City’s financial performance had remained stagnant, scoring an unqualified opinion with findings due to a number of control deficiencies relating to record management and processing, reporting and reconciliation of transactions.
Added to this, so called corrective measures taken by the previous administration failed to address root causes of previous deficiencies highlighted by the AG, resulting in repeat findings on, among others, material misstatements in the financial statements, non-compliance with legislation, including supply chain management prescripts, and inadequate performance reporting.
Sadly, two of the City’s entities, Pikitup and Johannesburg Roads Agency, could not sustain the clean audits achieved in the 2014-15 year and regressed to an unqualified opinion with findings in the 2015-16 year of review.
The audit outcomes illustrate poor attention to financial management practices under the previous government. This was also manifest in the failure to adequately investigate cases of unauthorised, irregular and fruitless and wasteful expenditure over years.
This left the City’s Council unable to assess whether or not the identified expenditure could effectively be recovered.
These findings affirm this administration’s commitment to building a competent, trustworthy, and professional civil service that puts the interests of the City’s residents first.
Since taking office, we have worked hard to begin the process of improving the City’s performance on financial management and reporting. To date the City has:
- capacitated our Compliance Unit (Screening Committee) which scrutinizes all supply chain management contracts and ensures compliance;
- introduced an open tender system to promote transparency and fairness in the awarding of tenders; and
- Capacitated the City’s Group Forensic Investigations Unit which will scrutinise cases in desperate need of investigation within the City.
Though the work of improving the City’s performance on financial management and reporting is still in its early days, we are already seeing signs of positive results:
- The City has begun to see a steady improvement in the resolution of previously reported AG audit findings. Since May 2017, audit findings verified as resolved have reached almost 59%; and
- There has been marked improvement in the resolution of reported internal audit findings which currently sit at almost 58% as at end of May 2017.
In order to ensure that we run a clean administration, the AG has stressed the importance of ensuring that reported cases of maladministration are investigated and where necessary consequence management measures are effected.
The City’s Group Forensic Investigations Unit currently has a total of 1089 investigations before it. To date, 209 disciplinary cases have been opened resulting in 109 suspensions. The City has also opened 132 criminal cases with the South African Police Services (SAPS) resulting in 42 arrests to date.
With these reported improvements, I am confident that the City is on track to ensuring that we run a clean administration with maintained good governance practices across all our departments and entities.