New Ekurhuleni finance boss vows to turn around the city’s fortunes

Former Ekurhuleni finance MMC, the EFF’s Nkululeko Dunga. (Photo: Gallo Images / OJ Koloti)

By Nonkululeko Njilo

28 Jul 2024

Ekurhuleni finance MMC Jongizizwe Dlabathi has declared zero tolerance for irregular expenditure, saying he plans to ensure the metro once again obtains a clean audit.

For the past year, Ekurhuleni has been on a downward trajectory, with its finances dwindling. In the 2021/22 financial year, it was one of only two metros in SA that received a clean audit outcome. A year later, it lost that status. New finance MMC Jongizizwe Dlabathi has vowed to turn the tide.

Dlabathi was appointed to the position on 6 July, having served as the council whip since 2016. Now he is in charge of the city’s R51.2-billion budget. He said work to get the metro back to its former glory had already begun.

“Irrespective of this regression with the recent audit, we have been doing relatively well to prevent instances of unauthorised, irregular and fruitless expenditure, to the extent that some of the historical expenditures that were incurred in a manner that contravened the supply chain management are being brought to council for different recommendations: whether to write off, whether to recover,” said Dlabathi.

ekurhuleni finance dunga Former Ekurhuleni finance MMC, the EFF’s Nkululeko Dunga. (Photo: Gallo Images / OJ Koloti)

Before his appointment, the position was held by the EFF’s Nkululeko Dunga, who was fired by Mayor Nkosindiphile Xhakaza due to “unforeseen misalignments”. Before Dunga’s axing, the Red Berets and ANC co-governed the metro, a relationship which later broke down and negatively affected service delivery.

During his maiden State of the City Address in April, Xhakaza raised alarm about finances not being aligned with the city’s priorities.

Last year, the Auditor-General flagged concerns about Ekurhuleni’s irregular expenditure of R516-million and noted the city’s weak internal mechanisms on contract, procurement and supply chain management.

Read more: Ekurhuleni mayor acknowledged financial woes, plans to ‘pull out all stops’ in service delivery drive

In June 2023, the ANC in the metro penned a letter to the party’s provincial leadership, asking it to reconsider the coalition with the EFF. It warned that the ANC risked losing its support base to the EFF if the coalition remained in place.

Liquidity concerns

Opposition parties in the Ekurhuleni council have expressed concern over the municipality’s liquidity amid ongoing financial and governance woes and called for the dissolution of the council.

Dlabathi, however, said cracks in the ANC-EFF relationship could not single-handedly be blamed for the loss of the clean audit outcome and collapse of service delivery.

“It’s quite difficult to apportion blame on politics completely because these are the transactions that are taking place at an administrative level.”

He said the ANC leadership should have taken a strong stance.

“You needed a tone from the leadership point of view that says, as an institution, we must approach and follow our [supply chain management] processes to the letter and declare intolerance to any transactions that are going to result in unauthorised and irregular expenditure.

“Furthermore, the leadership needed to continuously monitor the extent to which irregular expenditures or unauthorised expenditures had surfaced, and what was being done to nip them in the bud,” said Dlabathi.

Read more: Fact-Check — Did the EFF’s Ekurhuleni finance head achieve a clean audit?

Revenue collection

Three weeks into the job, Dlabathi said his priorities were financial recovery and improving revenue collection by fostering a culture of payment.

More than R26-billion is owed to the city and Dlabathi said it was crucial to manage debtors through an early warning system.

“This is so that the accounts do not become in arrears to the extent that the amounts grow unmanageable purely because we did not institute early warning systems.”

The metro was also considering setting aside some of its debtors’ interest and entering into a payment arrangement on the principal amount.

“As the ANC, we were at the forefront of proposing a 75% debt write-off as once-off relief. That is one area we are looking at — of course, subject to certain conditions,” he said.

The city was exploring other avenues for strengthening its revenue base, including exploiting strategic assets such as unused buildings that it owns.

“We will dispose of them to the market for repurposing and investment. [The city] will also give up strategic land parcels that it doesn’t have long-term plans for — but the private sector can invest in,” said Dlabathi.

The MMC said the city would give urgent attention to interim billing as many customers had raised concerns about incorrect billing, which resulted in the non-payment of services and protracted legal battles.

Credit control

Like the other Gauteng metros, Johannesburg and Tshwane, the metro will move to quickly implement credit control that targets errant debtors.

In Tshwane, a cut-off drive named #TshwaneYaTima (Tshwane switches off), was introduced in 2022.

Joburg introduced an exercise which saw the city’s metro police department tracking down residents defaulting on their municipal bills at roadblocks, workplaces and their homes.

Both initiatives were effective, although Johannesburg faced some backlash.

Read more: City of Tshwane’s unprecedented electricity cut-off spree may have been a lightbulb moment

Dlabathi said Ekurhuleni would now follow suit.

“It’s an action that we are now going to take, but we believe that in the order of priorities, there must be a culture that we are fostering for people to pay for their services.”

He said the relationship between the ANC and EFF was cordial, but not without challenges.

“Of course, any relationship will have its gaps, weaknesses and downfalls. Mechanisms are there now to try and address as and when there are issues that may have a potential threat to tamper with the coordinated way of governing.

“If we all play our part, we should be in a position to do much better and improve the audit outcome.” DM

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Liquidity concerns

Revenue collection

Credit control