A municipal official has been suspended in connection with the R2 billion shortfall.
The mayor of the City of Ekurhuleni has explained how R2 billion went missing from the municipality’s accounts.
On Wednesday, Mayor Nkosindiphile Xhakaza briefed the media about the controversial missing funds.
“When this administration took office, we inherited a substantial and complex challenge within our energy meter management, a historical revenue shortfall amounting to approximately R2.1 billion,” said Xhakaza.
What happened?
He stated that the shortfall was a result of mismanagement, stemming from inaccuracies and gaps in the meter reading and billing system.
He said this occurred because of the abrupt takeover of the function by the ICT department.
“We did not shy away from this problem. We confronted it head-on.
“We immediately implemented a comprehensive, three-pronged turnaround strategy focused on: integrity, accountability and recovery,” he said.
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Integrity of the billing process
Xhakaza said the city is now focusing on correcting the integrity of the billing system.
“Through significant investment in our systems, and returning the function to its parent department, our automated meter reading accuracy now stands at an impressive 97%, compared to the 84% when the function was taken over by ICT.
“It means residents can have confidence that their meters are being read correctly, billed accurately and fairly for the services they use,” he said.
Accountability
Xhakaza said the city had also suspended its chief information officer (CIO) as part of consequence management.
“We instituted decisive consequence management, which resulted in the suspension of the CIO, and there is currently an ongoing disciplinary hearing taking place,” he said.
Recovery of money
Xhakaza said the city is working hard to recover most of these missing funds.
He said the city has also launched a back-billing programme to ensure accountability and to recover the funds rightfully owed to the city.
“We are turning these bills into collected revenue that can be ploughed back into service delivery. So far, we have collected over R365 million from these historical accounts.
“Out of a total identified value of approximately R2.1 billion, we have – to date – successfully billed nearly R1.4 billion.
“There is a further R761 million that is in the process of being billed, following the necessary dispute and agreement period.”
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Xhakaza said the city will ensure that the city never faces such a huge shortfall again.
“Council approved a detailed Performance Improvement Action Plan for our Energy Services this past June.
“This is a forward-looking plan that includes developing a new service delivery agreement, reviewing the organisational structure for greater efficiency, and working with National Treasury to implement a new financial model for metro trading business units,” he said.
Mysterious death of Ekurhuleni auditor
Xhakaza’s update on the missing funds comes after Mpho Mafole, one of the auditors tasked with investigating the matter, was killed.
Police have arrested one man in connection with the murder.
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