SPEECH BY DENIS HUNT, DA SHADOW MAYORAL COMMITTEE MEMBER: INFRASTRUCTURE SERVICE AND ENVIRONMENT, ON ITEM 1 OF THE NOVEMBER CITY OF JOHANNESBURG COUNCIL MEETING ON THE FIRST QUARTER REPORT ON EXPENDITURE ON THE CITY'S OPERATING BUDGET, NOVEMBER 25 2011

Madam speaker,

On this item, I refer to the section where it is reported on page 1.3 that Johannesburg Water is not up to scratch on collections because of billing problems by huge amounts. Madam Speaker this is a serious matter and is unsustainable. It refers to the underlying problem of collections attributable to the billing crisis. As we heard yesterday Mr Dumas set out a programme to resolve this crisis over 19 months. 

Were he to be dishing out the medicine he is inflicting on unwitting residents of the city, to the City as a whole, we would be cut-off in the first week and the City would close down! 19 months is frankly not good enough. Our previous mayor said the problem would be resolved by last Christmas. 

The section 79 committee has not been updated with this latest information in item 1 per se - - it suggests that there is a serious management problem in Johannesburg Water.  However we have seen at the last Section 79 meeting a section which was missing from the Auditor-Generals report presented to us here in June - - his comments on the entity Johannesburg Water - - was at long last tabled after much reminding.  The reason why this had been excluded was all too clear, and damning extracts were to say inter alia:

a) That the financial statements were not prepared in accordance with the applicable legislation, contrary to the requirements of the Municipal Finance Management Act and were subject to material amendments as a result;

b) No more than a qualified opinion could be made on the statements;

c) That the Accounting officer did not fully fulfil his duties and responsibilities to ensure that the financial statements were prepared . . . without amendments being necessary;

d) Insufficient leadership oversight to ensure that adequate systems were in place for revenue to be billed correctly;

e) An accrual amount of R84 858 416, for revenue not billed could not be substantiated.

f) An amount for revenue from cut-offs  of R178 474 000 could not be confirmed as a correct figure

g) Journal entries could not be verified

h) R603 000 000 in material losses on unaccounted for water were identified, etc

i) A number of other findings recording deficiencies  in reporting, taking corrective action, and controls

The accounting officer was at the meeting - - he is now the acting MD - - and left before the discussion was completed without apology.  We asked for that report to be tabled in the council - - where is it madam speaker?  The mayoral committee has had this information since June and even as early as February when the draft AG report was tabled. Why has no action been taken?

What is the solution Madam speaker? Whilst the situation at Johannesburg Water needs attention in respect of suitable management the solution to the Billing crisis has to be:

Make City Power and Johannesburg Water Responsible and Accountable for their collections and billing.  I have said on numerous occasions, in the Council, and in the section 79 committee "How can you hold a company accountable for its revenue when they have no control over the billing and collections." This is the crazy situation which prevails in our city, and is more than anything the reason behind the billing shambles. 

As it is now, accountability is split between the Revenue Department which did not submit reports on a regular basis to the J Water, and J Water itself which had to process the meter reading carried out by outsourced contracts which then had to be overseen by J Water and submitted to the Revenue Department. And the one cannot tell the other of errors so that they can be rectified. What a shambles. 

What would the DA do?  Revert the responsibility for billing and collections and customer relations back to the entities of City Power and Joburg Water and appoint suitable staff as a matter of urgency. 

I thank you

Issued by the DA Johannesburg, November 25 2011

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