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Integrated Annual Report 2015/2016

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Integrated Annual Report 2015/2016 ‘Turning Challenges into Opportunities’ Contents About this report ____________________________________________________________________ 2 Executive Mayor’s Foreword ___________________________________________________________ 4 Statement by City Manager ___________________________________________________________ 6 Executive summary __________________________________________________________________ 8 Overview of City of Johannesburg _____________________________________________________ 12 Governance, compliance and risk management __________________________________________ 24 Stakeholder engagement ___________________________________________________________ 39 Service Delivery Performance _____________________________________________________ 40 Organisational Development Performance __________________________________________ 121 Group Chief Financial Officer’s Report _____________________________________________135 Auditor General’s Report ___________________________________________________________ 309 Corrective Action Taken / To Be Taken to Resolve Auditor General Findings_________________318 Report of the Group Audit Committee _________________________________________________ 325 1 About this report Statutory annual repor�ng process The Municipal Finance Management Act (MFMA), the Municipal Systems Act (Section 46) and National Treasury’s MFMA Annual Report Circular 63 require the City of Johannesburg (also referenced as “the City” or “CoJ”) and its municipal entities to prepare an annual report for each financial year covering both financial and non-financial performance. The report is informed by guidelines provided by the International Integrated Reporting Council (IIRC) and also considers the reporting priorities outlined in the King Code of Governance for South Africa (2009) (King III). This report is structured as follows; • About the Integrated Report; • Chapter 1: Executive Mayor’s Foreword and Executive Summary • Chapter 2: Governance • Chapter 3: Service delivery performance • Chapter 4: Organisational development performance • Chapter 5: Financial performance • Chapter 6: Auditor-General Audit Findings • Appendices This Integrated Annual Report covers the period 1 July 2015 to 30 June 2016 Referencing content online The CoJ 2015/16 Integrated Annual Report is available at www.joburg.org.za and where applicable in this report, detailed information is referenced on the City’s website. Scope and boundary of the Integrated Report The boundary of this report is limited to performance reporting as it relates to the City of Johannesburg during the 2015/16 financial year. Where applicable, the boundary extends to reporting on performance by Municipal Entities (MEs) that facilitate service delivery on behalf of the City, and as mandated by the City. The City Integrated Report was approved by Council in March 2017 for the period 1 July 2015 to 30 June 2016. Repor�ng philosophy and Alignment to leading prac�ce frameworks CoJ subscribes to Integrated Annual Reporting. As such, the report aims to reflect its commitment to a measured and integrated approach to its strategy and operational practices; as well as the reporting of its economic, social and environmental impacts. Through the use of an integrated reporting format, and application of globally recognized governance and sustainability reporting frameworks, this report aims to offer stakeholders a clear view of how CoJ strategy, governance, performance and prospects – in the context of its external environment – leads to the creation of value over the short, medium and long term. Key features of this report Key features of this year’s report include: • Illustrating how CoJ derives “material issues” and how they inform the City’s strategy. 2 • Introducing a diagrammatic representation of CoJ’s sustainability-driven business model to demonstrate the visible links between strategy and sustainability priorities. • Harnessing the principle of ‘materiality’ to inform report content. • Linking, as far as possible, CoJ’s material risks to strategy and material issues, as well as providing mitigation activities to manage risk exposure. • Presenting a high-level diagrammatic representation of the linkages between the company’s business model, operational structure, strategic objectives, capital inputs and business outcomes to demonstrate the connectivity between strategy, operations and performance; • Using icons as a navigation feature of this report and to reference online resources on the company’s website. Feedback CoJ aims to establish and maintain constructive and informed relationships with its stakeholders. Accordingly, please direct any feedback on this report to [email protected] Assurance The integrity of the integrated annual report is overseen by the City’s independent oversight committees (Group Performance Audit Committee and Group Audit Committee). The CoJ Council through its Municipal Public Accounts Committee also considered this report as part of Council’s oversight process between February and March 2017. The Auditor General (South Africa) audited the city’s reported financial and non-financial performance. The report has also been made available to all City stakeholders. Approval of the Integrated Report The Council of the City of Johannesburg acknowledges its responsibility to ensure the integrity of the 20115/16 Integrated Annual Report. Council confirms having collectively reviewed the content of the Report and agree that it addresses issues that are material and that it provides a fair representation of the integrated performance of the City for the period 1 July 2015 to 30 June 2016. Contact City of Johannesburg 1st Floor, A Block P.O. Box 1049 Metropolitan Centre Johannesburg 158 Loveday Street South Africa Braamfontein 2000 Telephone number : Tel: +27(0) 11 407 7356 Fax : +27 (0) 11 403 7372 Website : www.joburg.org.za 3 Executive Mayor’s Foreword Introduction In August 2016, residents of Johannesburg gave a coalition of parties under the leadership of the Democratic Alliance a mandate to lead the City for the next five years. It is a mandate that we have accepted and therefore I am very pleased to present the Integrated Annual Report of the City of Johannesburg for 2015/16. This annual report represents a financial year under the previous administration in the City. It represents the baseline against which the new administration will measure its improvements in the lives of the residents of the City. Past performance We have inherited a City that has excelled in certain areas but is still faced with many challenges. Despite the City’s efforts to create jobs, unemployment in the City still lies around 31% while youth unemployment is close to 40%. Over the past five-year term, the ranks of the unemployed swelled by 190 000 people. The City has much to do in respect of its revenue collection in order to fund its mandate of delivering change. With the City close to its prescribed debt ceiling, more revenue needs to be raised through improvements in efficiencies. Massive capital investment is required to address a ten-year, R170billion backlog in infrastructure, essential to enabling a growing economy. The pace of service delivery in the City remains far below the expectation of its communities. Complicated and inefficient governance decision-making processes, impact on the rollout of service delivery. The City's backlog stands at 300 000 with an annual rollout of housing that is inadequate. Future Outlook Looking ahead we have put together a Mayoral Committee capable of delivering on the mandate of the coalition government. It is composed of men and women committed to improving the lives of the residents of Johannesburg. Together we will re-organise the City to ensure it works, and when Johannesburg works South Africa will work. Our approach is about getting the basics right in the City, because the role of local government has to be delivering services, stopping corruption and achieving the enabling environment that creates jobs. this requires us to get the basics right. We have appointed the new City manager, Dr. Ndivhoniswani Lukhwareni, a seasoned local government administrator who is capable of helping us drive the new strategic priorities over the next five years. A crack team of investigators is being set up, ably led by Shadrack Sibiya, with the sole purpose of pursuing cases of fraud and corruption within the City. Council is set to approve policy that will allow for the very first open tender system in the City of Johannesburg, which will pave the way towards transparency and openness. We are currently finalising the City's first open housing list which will allow applicants to know where they stand on the housing list, provide them with the peace of mind knowing that the list cannot be manipulated. We have a mandate to lead the City for the next five years. The over-arching approach has to be about achieving a minimum of 5% economic growth which creates jobs in our City, liberating the nearly 900 000 unemployed people in the City. Our focus in the following years will be on; • Improving decision making and service delivery through re-absorption of municipal entities into the core and decentralising service delivery into the regions; • Addressing the R170 billion infrastructure backlog with the help of the private sector that has balance sheets capable of investing about R20 billion a year; • Improving the maintenance of our existing infrastructure to acceptable levels; • Regeneration of the Inner City
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