Joburg to tackle billing chaos with new system and tighter operations
• Finance boss’s job is on the line if he cannot clean up flawed and corrupt process
The City of Joburg Metropolitan Council was inaugurated in 2002, following an amalgamation of the 16 councils that governed SA’s largest city during apartheid.
While the political divisions were successfully dismantled, the city has battled to unify the billing systems of the previous administrations, setting in motion a crisis that bleeds R1.5m a day in rates and taxes.
The city has lost up to R5bn annually due to incorrect information in its monthly rates and services bills sent to residents.
Member of the mayoral committee (MMC) for finance Rabelani Dagada says this is due to the flawed implementation of billing systems when the metro was formed, incompetence in fixing the flaws and “severe distrust” by the public of their monthly accounts.
Joburg mayor Herman Mashaba has placed the entire finance department on terms: either resolve the issues or face the consequences. He is demanding regular feedback on the implementation of measures to fix the failures.
The consequences the department will suffer have not been specified but Dagada, who was rumoured to be in the firing line last week, says he is ready to fall on his sword if the problem cannot be solved.
At a restaurant at OR Tambo last week, flanked by his spokeswoman and adviser, Dagada presented his blueprint of a turnaround plan. “The amalgamation of the council, that’s where it started,” he said.
The next problem was the failure to implement a system application program codenamed Phakama. There was no proper clean-up of data when it was transferred to a new system, which caused technical issues with billing.
The municipality did not “conclusively” deal with initial issues and queries from customers, said Dagada. Instead, the billing problems were swept under the carpet.
“When you say to people disputing a bill ‘just pay for what you think is fair’, what happens to the rest of the amount owing?” he said. “People then go quiet and say everything’s fine. They will just pay what they think is fair. Then you find the noise goes quiet.”
Dagada said officials began making “estimates” of how much money was owed. This led to more negative perceptions of the billing system, which led to ratepayers questioning the credibility of the city and people declaring that officials were wrong about amounts owed.
Initially, there were high estimations and low coverage of actual readings. Dagada said no audits were conducted on water and electricity meters and there was no verification of disconnections or reconnections.
The data the city was using was of questionable integrity and some accounts could not be billed at all as dates appearing on them were years such as 2026. The finance team suspects that council officials were paid not to bill residents or found the problem so difficult to resolve that it was parked until later.
Dagada said when this was discovered, the ring-fencing of these bills stopped and people were sent accounts for services used. “The rot festered in the chaos,” he said.
The city has launched investigations into fraudulent changes following accurate meter readings, fraudulent billing reversals, fraudulent changes in tariff and rate categories, fraudulent credit balance transfers, fraudulent deletion of reading orders and fraudulent refunds. Three officials have been suspended for fraudulently changing meter readings, two senior officials resigned during the investigations and control measures have been implemented for the billing reversal process and refunds.
But the city is battling to clear a high number of disputes as residents continue to question the credibility of their bills.
As part of the solution, the city will audit properties, meters and customers. They are implementing new performance management systems of the finance staff, promising enforcement of consequence and the recruitment of skilled and qualified professionals.
The city believes the new, modern system application program in its revenue environment will help clean up the billing crisis.
The system has been installed in all departments dealing with finance. Previously, billing was not centralised in the finance department, with entities such as City Power, Pikitup and Joburg Water taking their own meter readings.
DAGADA SAID OFFICIALS BEGAN MAKING ‘ESTIMATES’ OF HOW MUCH MONEY WAS OWED THE CITY BELIEVES THE NEW SYSTEM IN ITS REVENUE ENVIRONMENT WILL HELP CLEAN UP THE BILLING CRISIS
“They provide the numbers to group finance,” Dagada said. “If those numbers are wrong, it means group finance will send out statements that are wrong. And there is nothing the MMC of finance can do because I don’t have the authority.”
A technical support service unit is being established and a tender is going out for assisting with technical support, such as meter readings and disconnections and reconnections.
Dagada said it was vital that consumers became involved in sorting out their accounts. He said he hoped residents would one day be able to send an SMS or log into e-services to submit their readings, with auditing taking place regularly to make sure the readings were correct.
“Now, we are taking accountability,” says Dagada, who is also taking control of the city’s information and communications division.
“If this cannot be done properly, the MMC of finance should be booted, because finance is under his umbrella.”