Admin
12 Mar, 2025
Mismanagement of City Power: R4.9 billion in irregular expenditure
Statement by Andile Jabavu, Gauteng Provincial Secretary of the United Democratic Movement The United Democratic Movement (UDM) in Gauteng is deeply concerned about the Auditor-General’s (AG) shocking findings on the City of Johannesburg's City Power, revealing a staggering loss of R2.8 billion in the 12 months ending 30 June 2024. Even more alarming, the entity incurred irregular expenditure exceeding R4.9 billion, raising serious questions about financial mismanagement, corruption and governance failures. City Power, a vital municipal entity responsible for electricity supply in Johannesburg, is teetering on the brink of collapse. The AG has warned of “material uncertainty” regarding its ability to continue operating, with its liabilities exceeding assets by R1.1 billion. These revelations come as residents endure frequent and prolonged power outages, exacerbating Johannesburg’s ongoing electricity crisis. Of particular concern is the R12 million advance payment allegedly made to a politically connected businessman, for a public lighting project, months before any work was done. Reports shows that internal City Power officials raised red flags, warning that this payment violated Treasury regulations under the Municipal Finance Management Act and the Public Finance Management Act. However, these concerns were allegedly overridden by a senior official who instructed subordinates to process the payment despite clear irregularities. Even more alarming, the businessman in question is allegedly linked to a known African National Congress benefactor, raising serious concerns about political interference. Transparency and accountability are non-negotiable, yet City Power’s response to these grave allegations have been vague, with promises of investigations that have so far produced no tangible results. Meanwhile, Johannesburg residents continue to endure worsening infrastructure and daily power failures. The UDM in Gauteng will not stand by while public funds are mismanaged at the expense of service delivery. We call on the City of Johannesburg and law enforcement authorities to act decisively in rooting out corruption and ensuring that those responsible for City Power’s financial collapse are held to account.
Admin
23 Jun, 2017
AG’s findings on local government audit remains cause for concern
Regarding the Auditor-general’s latest report on the local government audit, the United Democratic Movement (UDM) notes that there were only marginal improvements in local government audit results. We are however concerned that 14 municipalities lost their clean audit status, while only 9 cleaned up their acts. It simply means that good governance at local level, and effective municipal management, is moving in the wrong direction. It is heartening that the Auditor-general’s office, as a Chapter 9 institution, seems to be doing its job without fear or favour and does not shy away from fulfilling its Constitutional mandate. Statement issued by Mr Bongani Msomi – UDM Secretary General The UDM is on record regarding Government’s over-reliance on consultants and it is discouraging to hear that consultancy fees for financial reporting services increased to R838 million. The greatest worrying factors are that: 1) Municipalities spend more than they have, their current liabilities exceed current assets at year-end, debtors are not paying or delay payment, as well as late payment of creditors. 2) There has been no improvement on the perennial concerns of the Auditor-general about contracts awarded to employees, councillors, their families and other state officials. 3) Even though fruitless and wasteful expenditure is down 21%, irregular expenditure has increased by just over 50%, which the Auditor-general said was “the highest since we started tracking the values”. Given the yearly damning observations, the UDM doubts if councils and municipal administrations take the Auditor-general seriously. The Auditor-general is simply ignored and the powers-that-be go about their merry ways without caring about the implications of their looting of State coffers and failing management. There are no repercussions for failing municipal administrations, and the UDM believes it might be necessary to have an Auditor-general with teeth. The UDM also notes an interesting trend regarding fruitless, wasteful and irregular expenditure by the Government; in particular at local sphere. This trend is mostly expressed during a year of general elections (national, provincial and local) as well as in a year of the conferences of the African National Congress (ANC) and its Alliance Partners. This trend is manifested in this year’s report, with the year preceding being Municipal Elections. We will not be surprised to notice a spike in expenses when, this time next year, another report is issued after the conferences of the ANC and its Alliance partners. The UDM will consider investigating this trend to establish whether public monies are not being used to fund internal political party programmes. If this is the case, it will be proof of yet another thievery. It is easy to look at the figures presented by the Auditor-general as list of amounts, but one must never forget that there are billions of Rands involved each year, which should be spent on bettering the lives of South Africans and not lining the pockets of the few.
Admin
15 Apr, 2014
Department of Labour Compensation Fund: corruption and wasteful expenditure
To: The Public Protector – Ms Thuli Madonsela Copy: The President of the Republic – Mr Jacob Zuma The Auditor General – Mr Thembekile Makwethu From: The UDM President – Mr Bantu Holomisa, MP subject: Department of Labour Compensation Fund: corruption and wasteful expenditure Dear Ms Madonsela The above mentioned matter has reference. R2,5 billion Compensation Fund investments misuse The UDM understands that the main purpose of this fund is to compensate for occupational injuries and diseases. Reserved funds normally are invested with the public investment cooperation for unforeseen mass occupational injuries that might occur in future and to cater for increases on injury on duty, monthly pensions for employees and dependents. Payment of advances to private companies – R546 million There are serious allegations which fingers the Compensation Commissioner who has paid some companies in advance to the tune of R546 million. He is alleged to have undertaken a very risky action by paying advances to these companies without any invoices to reconcile the payments. Debtor’s book has increased: R3,3 billion in 2010 to 8,9 billion in 2013 The Compensation Commissioner appointed a debt collector by the name of NICS since 2010 that has already been paid about R160m. In contrast, the debtors’ book has increased from to R3.3billion in 2010 when they took over from internal staff to R8.9 billion in 2013. This is evidence that NICS is not effective at all but is collecting on the efforts made by internal staff by charging 10% of collection. The contract was deliberately manipulated and changed by the Compensation Commissioner to deviate from the initial tender specification whereby NICS was supposed to collect on older debts beyond 180 days. NICS collects on simpler cases to make quick cash while internal staff is also pursuing the same cases. The Commissioner has flatly refused the legal advice by the Senior Council that the contract should have been terminated on grounds of poor performance. We therefore appeal to your good office, President’s office and the Auditor General to speedily attend to this seemingly looting spree taking place at the Compensation Fund. As you will be reading this document, especially Mr President, you will find that the Minister of Labour Ms Mildred Oliphant is being accused of conflict of interest with the Accenture IT Company, where her close relative is a director. As a result of this apparent corrupt relationship, Accenture was procured to a closed tender and the Minister did not declare her relationship to Accenture. Kindly advise. Mr Bantu Holomisa, MP UDM President
