The City of Johannesburg (COJ) has received its second consecutive qualified audit from the auditor-general (AG) and says this is largely attributable to its billing crisis.
Project Phakama, which saw the city move its various billing platforms onto a SAP system to provide a single view of its 1.3 million accountholders, at a cost of more than R580 million, has been a headache for many residents, who have complained of grossly over-inflated bills, inaccurate meter readings, illegal disconnections and a lack of service from the city's call centre.
The AG's report said the qualification was due to a poor revenue management system; lack of consistency with regards to records used for billing customers; R1.2 billion in losses due to the billing crisis; R410 million in irregular expenditure; and severe losses at entities reporting to the city.
Identifying gaps
At the release of the 2010/11 financial year report yesterday, city manager Trevor Fowler said, along with the global economic downturn, the billing issue resulted in a negative impact on budgets and revenue since the revenue collection ratio of 88% was below the annual target of 92%.
“A number of technical glitches were experienced with the introduction of the new billing system, which impacted on customer service. During the current financial year, the new administration introduced a roadmap for revenue and billing enhancement.”
Third qualification?
The Democratic Alliance (DA) says this second qualified report is a confirmation of the deteriorating state that SA's biggest economic hub is in.
In a statement released yesterday, DA shadow MMC for finance in Johannesburg, councillor Patrick Atkinson, and DA municipal public accounts spokesperson, councillor John Mendelsohn, said the audit report states that R4 billion of rates billings and R15 billion of services billings are qualified as either not being verifiable, accurate, complete or even existing. “This is a startling proportion figure when one considers that the total billed revenue for the year was R28 billion.”
“It is critical that the situation is turned around in the shortest possible time. The city will have to address all of the administrative and IT weaknesses, which led to this qualification, and unless it can do so by 30 June 2012, the end of the current financial year, Johannesburg may find itself receiving a third qualified audit.”
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