The City of Johannesburg council has resolved to recover or write-off R75.2bn in unauthorised, irregular, fruitless and wasteful (UIFW) expenditure, despite protests from the opposition. .
The expenditure was investigated by the council's municipal public accounts committee (MPAC) and a motivation was brought in terms of the municipal budget and reporting regulations recommending this decision.
EFF committee member Sepetlele Raseruthe tabled the motivation, saying the expenditure covers various departments and ranges from the 2012/2013 to 2021/2022 financial years
“According to the municipal budget and reporting regulations, once a council committee has investigated the recoverability of UIFW expenditure the committee must submit a motivation to council explaining its recommendation regarding the recoverability of the expenditure.”
The committee convened on November 9 2023 and April 18 2024, agreeing to recommend to council that some expenditure be recovered, while some be certified irrecoverable and written off.
The report, which TimesLIVE has seen, said: “The committee received 23 investigative reports. Of the reports, the committee agreed with the recommendations of 18: to recommend that R62,890,075.29 of irregular expenditure and R1,855,046,000.00 of unauthorised expenditure be certified irrecoverable and written off and R10,465,710.10 of fruitless and wasteful expenditure be recovered from the service provider who didn't exercise due care. These amounts include irregular, fruitless or unauthorised expenditure for the various City of Johannesburg metropolitan municipality departments.”
Raseruthe said he was encouraged that the report recommended the recovery of more than R350m in fruitless and wasteful expenditure, which includes office space paid for and never used.
“Recovering this fruitless expenditure is crucial to maintaining the financial integrity and accountability of the municipality to its citizens. Implementing these recommended measures will not only rectify the issue but also strengthen our financial management practices.”
The committee vowed to ensure the executive would take prompt steps to recover fruitless expenditure from responsible parties.
ActionSA councillor and MPAC member Larah-Ann Green, however, said this situation was unacceptable.
“As councillors in the committee, we sit for days on end going through line item by line item. Decisionmakers are invited and questioned, write-offs are advised. The core then presents pretty presentations and remedial action. Yet here we are back at square one with my committee members saying the same thing.
“This cannot be acceptable. It is bizarre that we are requesting recoverability in 2024 for a service rendered in the 2009/2010 financial year. That is 14 years ago. As a council and committee, we need to do better,” she said.
ACDP councillor Ronald Harris recalled auditor-general Tsakani Maluleke's report on local government audit outcomes as an urgent call for performance, accountability, transparency and institutional integrity in local government.
“The council is being asked to consent to the write-offs of large amounts of money related to irregular expenditure, unauthorised expenditure and fruitless and wasteful expenditure. The amounts are horrific. Two law firms will gain R96m from our actions. Two software companies will make a profit of R14m at the expense of residents. This is unconceivable and immoral,” he said.
The metro is struggling to maintain its infrastructure, resolve water and electricity challenges because of budgetary constraints. Yet we are asked to approve these huge write-offs
— Ronald Harris, ACDP councillor
Harris said there would be serious consequences if the reports was rubber stamped.
The metro would suffer serious financial loss and it was distressing to see the “feet-dragging” from debtors in a position to invoke prescription as provided for.
“The metro is struggling to maintain its infrastructure, resolve water and electricity challenges because of budgetary constraints. Yet we are asked to approve these huge write-offs. There is no information on whether disciplinary action has been instituted against officials responsible for this financial delinquency.
“The lack of information on consequence management, including the laying of criminal charges, makes it more difficult to be complicit in this mismanagement. The action we are asked to take will erode the little trust we have in the public body and will leave offending officials relatively unscathed and at liberty to repeat this mismanagement at will.”
His party rejected the motion.
The ANC's Masindi Mmbengwa said most of the implicated officials will leave the city or the companies will shut their doors and the money won't be recovered.
“We must recover this money. It has been a norm whereby we talk and not act. The City of Joburg must be a no-go area for those that harbour corrupt minds. We are urging, even if it takes us to use the Special Investigating Unit, let us start seeing people's properties which are the proceeds of these evil collections attached. We want to start seeing money that has been ill-gained recovered by attaching their pension and properties. People must go to jail.”
Finance MMC Margaret Arnold acknowledged the input, saying the city would have raked up R5bn in collections by month end.
“As the MMC, my main aim is to focus on financial stability as well as ensuring we spend ratepayer money properly. I assure you that, through council, we will have internal controls in place to strengthen processes. After vigorous processes that will follow, I will ask this house to support the recommendations in the report.”
The motion was approved.
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