The City of Cape Town’s strategic Integrated Development Plan (which ratepayers pay for) for the next five years is based on five interrelated pillars, the second of which is the “Safe City”.
The Safety and Security Directorate is made up of Metro Police/Law Enforcement and Traffic Services/ Fire and Emergency/Disaster Risk Management and the Public Emergency Call Centre.
They issue fines of ZAR912mln a year (page 154 of the 2016/2017 budget) the majority of which are traffic related fines.
Imagine all the fixed cameras, much talked about average speed cameras, mobile vehicles with officers and cameras, the man hours completed processing and issuing fines, the systems employed to generate and send the fines, the man hours spent maintaining the cameras and so on.
Imagine how much all that costs in terms of both capital expenditure outlay AND operating expenditure to maintain and operate the equipment.
Imagine on top of all of those costs, that the City writes off 740mln of the 912mln it issues in terms of fines – an 81% bad debt recovery.
This amount (740mln) represents a staggering 44% of the ENTIRE operating annual budget for the Safety and Security Directorate.
Imagine that this has been happening for the last 5 years at least and according to the latest budget, it is forecast to last another 2 years – see page 154 of the budget.
Imagine how demoralising it must be for the Safety and Security staff and MEC who are battling away with budget cost cutting, lack of vehicles and lack of manpower to do their jobs’ knowing that their bosses (MAYCO) write off 81% of their income from fines.
Imagine how demoralising it is for people who do actually pay their fines to know that if they simply just threw them in the bin, the City will write them off. Yet if you don’t pay your rates bill for 3 months you are issued with a letter of demand? Ratepayers face increases EVERY year and are forced to accept this unbelievable waste?
Ratepayers have to fund their own Law Enforcement cars and provide volunteer Law Enforcement Officers to man them – fact. Metro Police are hardly ever seen in the neighbourhoods, the same goes for traffic services. And besides which, if they do issue fines, we now know what happens to them! 740 million per year could mean an additional 500 cars at 350k each amounting to 175mln and then 4 staff (shift basis) per car at 200k each per annum amounts to 400mln – total 575mln with 165mln “change” for operational expenses (330k p/a per car).
An additional 500 patrol cars to combat crime – imagine that.
When questioned, we are advised by the City that it is an not an administrative action in terms of collecting fines – it is a matter for the Courts, the Department of Justice specifically.
When questioned further and pressed as to why not insist on administrative justice, we are advised that they have “recently” been asking a lot more questions and “miraculously” they are starting to see results. The City advised they have also been setting up and paying for magistrates courts to handle the backlog.
Really. Why only recently? Is it because they have recently “changed” their accounting policy (page 21 pf the budget) which records revenue at face value (the value of the fine) and not just recording the value of what is actually collected. How misleading is this? This is itself a dubious explanation – revenue should always be recorded at face value and then if any needs to be written off, then it is written off under expenditure. Otherwise, as the case has been for the City for last decade, one is able to hide figures. If anyone bills 1mln out in sales but only records what is actually collected, say 100k, then it looks like I billed 100k and received 100k – a 100% recovery. If I record the 1mln and then only collect 100k, then all sorts of internal audit alarm bells go off – 10% recovery – or 19% in the case of the City. It is very basic tenant of financial accounting – any accountant who only recorded what was collected from sales would very soon be fired in the private sector for gross incompetence and pursued through his professional body.
Fines are one thing, but what else is hiding in the detailed numbers? For instance, the yearly continued underspend on their Capital Budget. The City will advise they are spending 85-90% of their capital spend (2014=80%) which may sound good but when you add to a value to the unspent 10% it comes to 600mln (six hundred million a year).
It does make you wonder how Ratings Afrika then announce that the City is the “best financially managed metro” – IOL 20 April 2016. What did they have to say about the accounting treatment?
How can this waste be happening when we face unprecedented levels of crime? Why is it not being exposed?
I recommend that they introduce the “Pillar of Wastage” which records just how much is being wasted and which is published in their annual “good news” budget report.”