# Joburg’s R3bn wasteful spending revealed in auditor-general’s report

- Link: https://dearsouthafrica.co.za/2020/03/10/joburgs-r3bn-wasteful-spending-revealed-in-auditor-generals-report/
- Published: 2020-03-10T13:16:01+02:00
- Author: dearSA

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Johannesburg – A massive R3.5billion in unauthorised, irregular, fruitless and wasteful
expenditure has highlighted the alleged dire state of Joburg’s finances.

The auditor-general revealed that Joburg’s wasteful and irregular expenditure worsened
by R758million in the 2018/19 reporting period, compared to the previous year.

The city has also been flagged for not paying its creditors within 30 days, which
is a repeat offence that the auditor-general has highlighted in his previous report,
including that there was a lack of competitive bidding processes for Joburg contracts.

The auditor-general revealed that goods with the value below and above R200000 were
procured without inviting competitive bidders, in line with supply chain regulations.

The finding by the auditor-general appears to corroborate what Joburg mayor Geoff
Makhubo alleged about the dire state of the city’s finances.

At a briefing last month, about two months after he succeeded Herman Mashaba as 
mayor, Makhubo claimed the city was on the brink of financial ruin and blamed the
DA-led coalition government for the situation.

Makhubo formed an ANC-led coalition government in December, following the resignation
of Mashaba from his mayoral position and the DA.

“We can confirm with certainty that the DA-led administration in the City of Johannesburg
has brought the city to near financial collapse and created an environment where
maladministration bordering on fraud and corruption has thrived,” Makhubo said at
the time.

Mashaba, however, slammed these claims, saying Makhubo had been predicting collapse
since August 2016, when the DA took over Joburg.

“Contrary to these allegations, the pre-audit financial statements for the 2018/
19 financial year reflected a significant improvement in the City’s financial health
and liquidity, with its closing cash balance increasing from R2.2billion at the 
end of 2017/18, to R5.3billion by the close of 2018/19,” Mashaba said.

But alleged maladministration was also revealed by the auditor-general, where a 
supposed lack of consequences and repercussions for bad financial management in 
the city was highlighted.

Joburg spokesperson Nthatisi Modingoane acknowledged that the city was not paying
all its creditors within 30 days, but said that it was remedying this anomaly.

“The City of Johannesburg currently pays 90% of its creditors within 30 days. There
are several reasons for non or delayed payment, which include queries and disputes
with suppliers on the delivery of goods and services; incorrect invoices; and incomplete
documentation for payment processing.

“The city is actively alert to the impact of non or delayed payment on creditors–
specifically small and medium enterprises – and is continuously looking at improving
all its supply chain management processes,” Modingoane said.

“The city is implementing several remedial actions. These include the re-implementation
of a system to streamline processes – making them more effective and efficient.

“This will be coupled with city-wide training of finance staff on the improved payment
systems.”

On the action to be taken to stop wasteful spending, Modingoane said: “The city 
has already implemented consequence management through investigations and enquiry
of fruitless expenditure.

“Where individuals are found guilty, disciplinary action is implemented – including
the recovery of monies deemed irregular, fruitless and wasteful expenditure.”

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**The Star**