Joburg 2015/16 Financial Statement: DA Discovers R3.4bn Irregular Expenditure


The DA mayor for the city of Johannesburg has revealed a shocking report about billions of rand squandered by the city’s past administration in an unreported irregular expenditure found in Joburg’s 2015/16 financial Statement

The city’s past administration under the ruling African national Congress, has since lost its hold of the city in the August 2016 municipal elections, being heavily criticized by the Democratic Alliance who claim to be on a mission to wipe out corruption condoned by the ANC in the past years.

According to the report, the DA’s Herman Mashaba was shocked by Joburg’s 2015/16 financial Statement which states that the City, under the ANC administration, incurred a staggering R3.4billion of previously unreported irregular expenditure, with R700 million in the last financial year alone.

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The party made the shocking claims on Thursday after tabling the auditor general’s 2015/16 annual financial statements. Mashaba’s administration blamed the bleak financial status on the previous administration, saying it manifested high level of lack of attention to financial management practices.

This, according to mayor Herman Mashaba, resulted in a failure to adequately investigate cases of unauthorised, irregular, fruitless and wasteful expenditure.

“This is very disappointing and annoying” Mashaba reiterated as he pointed that his greatest concern was that most of the concerns raised by Auditor-General Kimi Makwetu had not been investigated internally by the city. That, he said, was “a major infringement of the law”.

About 80% of the wasteful expenditures disclosed in the annual financial statements was yet to be investigated, but it was revealed that the total balance of unauthorised expenditure reached R3.4bn, with R692m being incurred in the 2015/16 financial year.

About R18.4m worth of contracts reportedly went to three government officials and two Joburg staffers and Mashaba revealed that close families of seven officials unduly benefited from contracts worth R4m. Just more than 50% of these awarded contracts were not declared.

This report comes after reports that the city’s ombudsman’s office incurred irregular expenditure barely a year after being established.

The Joburg’s 2015/16 financial Statement released last week states that in the 2015/16 financial year, the office had R9.9 million in irregular expenditure, according to an unaudited annual financial statement (AFS).

The report also has it that the city irregularly awarded three contracts to information, communication and technology companies when the office was being set-up. The companies including Dimension Data, EOH and Yeo Technologies, were appointed through regulation Section 36 of the supply chain management policy.

While Dimension Data and Yeo Technologies were awarded R3.9m and R5.1m contracts respectively, to set up ICT infrastructure for the new office “and its business operations”, EOH received R792 800 to set up infrastructure cabling for the office.

Read Also: Over 100 Joburg Officials To Be Arrested On Corruption Charges

Meanwhile, the city’s recently appointed anti-corruption unit head, General Shadrack Sibiya, has been tasked with investigating the cases.

The auditor-general Makwetu had, however, criticised the city for lax contract management even as his report allegedly found that the contract performance and monitoring of six contracts, amounting to R51.4m, were insufficient.