Four years after the City of Johannesburg denied it had a billing crisis - despite thousands of complaints - and then said it was rectifying the situation, problems persist and it is now spending even more on its SAP system.
This was revealed in the city's latest annual report, released last week, for the year to June 2014, which noted it is "continuing efforts to normalise and improve our revenue collection" in line with the Joburg 2040 Strategy. It notes revenue collection has finally improved to a level where it is collecting 94% of all bills.
The city claims significant progress in "eliminating billing issues" and says it is now in an "improved state of responsiveness to billing issues" due to its open days and revenue step change programme, which led to "a marked improvement in the resolution of queries".
Yet, the auditor-general (AG) has found consumer debts are increasingly being impaired, with R15.5 billion written off in the 2014 year, compared with R14.4 billion in 2013. The AG's report says this accounts for 76% of all consumer debts.
A daily battle
Democratic Alliance (DA) councillor Victor Penning says these write-offs are as a result of the ongoing billing crisis, which leads to the city's write-offs growing by between 3% and 6% monthly. He argues the city's 94% revenue collection is not an accurate figure, because this is the amount it collects after write-offs and does not show the entire picture.
The seemingly never-ending billing crisis is thanks to post-implementation issues with the R580 billion Project Phakama - a move to put all disparate departments on one SAP platform - which led to 80 000 complaints about grossly-inflated readings and inaccurate bills.
Penning says the severity of the crisis has passed, but continues to persist as he spends his "life" dealing with incorrect bills that take at least a year to resolve. He cites bill inaccuracies that amount to hundreds of thousands of rands, and points to inaccurate data as the root cause of many problems.
The situation is exacerbated by the fact that many residents are not getting bills because the city chose to move to e-delivery through MMS, a project it initiated towards the end of 2013. Penning says this shift means many people are not getting bills because they cannot view them, and then have to guess how much should be paid, and cannot deal with erroneous statements immediately.
More software spending
The billing crisis by date
June 2010: Phakama goes live and thousands complain of issues with overbilling.
January 2011: Then mayor Amos Masondo denies there is a crisis as a low percentage of people are affected.
June 2011: The city claims it has sorted the inherent problems with its billing systems, and resolved the billing crisis.
August 2012: Promises the final handful of queries caused by the billing system will be resolved.
January 2013: The city receives a third qualified audit because it cannot provide accurate revenue figures.
September 2013: MMS bills go live.
January 2014: The city finally gets an unqualified audit.
January 2015: The city writes off R15.5 billion.
In a bid to fix deficiencies and resolve the "billing crisis hangover", the city is now upgrading its current SAP system, which Penning says is not delivering the needed outcome. "It's just another R500 million or so, don't worry about it," he quips.
The city's annual report notes it approved its new ICT strategy during 2014, which is a bid to turn it into a smart city, improve broadband capacity, and upgrade its SAP system. DA councillor John Mendelsohn explains the upgrade is needed because the current system is unable to adequately collect and extract dashboard data, which means the city cannot go back to the source and determine what is broken.
According to its remedial plan - to address AG-highlighted deficiencies - it will upgrade the current SAP version to SAP ECC6, which it says will take care of the AG's findings on the SAP strategic monitoring tool/ performance monitoring tool, which includes "collation and storing of performance information".
Mendelsohn says the city is facing a "long slog ahead" thanks to a "toxic mix" of a culture of non-payment in SA, a fear bills are wrong, and a consumers' belief that they can get away with non-payment because of inadequate systems.
The city did not immediately respond to a request for comment.
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