Auditor-General Report: City saves R500 million for service delivery

The City of Johannesburg‘s Integrated Annual Report, including the findings of the Auditor General for the 2016/17 financial year, was tabled in council on 31 January and revealed that austerity measures had saved the City R500 million.

The findings of the report are a reflection on how the City used its R56 billion budget for the 2016/17 financial year to deliver services to close to five million residents.

Executive Mayor Herman Mashaba said austerity measures focused on reducing self-promoting advertising, marketing, domestic and international travel, consulting and professional fees, and conferences and seminars to reduce spending.

“These savings continued into the 2017/18 financial year and will be redirected into critical service delivery areas such as maintenance of traffic lights and street lights, repairing potholes, informal settlement upgrading, and the capacitation of key City departments such as development planning and the valuations unit,” he said.

The report shows the City maintained an unqualified audit, with five entities receiving a clean audit, one more than last year.

But City Power remains in a financial predicament because it reportedly suffered cash flow problems as a result of a number of issues outside of its control, including a R314,5 million tax dispute.

“Despite being an area where improvements are still underway as at the financial year end, total revenue collection had increased by 4 per cent and the City had maintained its credit rating with Moodys,” Mashaba said.

He said the City also achieved 52 per cent of its Key Performance Indicators, as compared to 38 per cent in the previous year, also achieving a 2 per cent increase in customer satisfaction.

An extract from the Auditor General’s report reflects no significant change when compared to the previous two years.

It also said non-compliance with key legislation remains a major concern and the City is unlikely to improve its audit outcome if the root causes for material non-compliance are not addressed. The report also said additional unauthorised and irregular expenditure during the audit process were identified.

On this, Mashaba said the City still saw a decrease in unauthorised expenditure from R692 million in 2015/16 to R502 million in 2016/17.

“In addressing the increase in irregular, fruitless and wasteful expenditure, the AG recognised the fact that the City’s efforts to investigate corruption and maladministration, had played a key role in the increases recorded.

“This is substantiated by the increases noted in these issues being reported to the AG, as opposed to the historical trend of the AG identifying these matters during the audit.”

Looking to the coming financial year, Mashaba said the City would look to enhance its use of the capital expenditure budget, of which only 78 per cent was spent during the year under review.

Also read:

Report exposes irregular expenditure
No free water and other tariff increases in MMC Dagada’s first budget speech 

Chantelle Fourie

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