Latest news with #R120bn
The Citizen
24-07-2025
- Business
- The Citizen
Auditor-General's war on waste and corruption yields R4.5bn
But it's a war that is far from won. A good outcome, but Auditor-General Tsakani Maluleke seems exasperated at the lack of accountability among those charged with spending public money. Image: Brand South Africa Auditor-General (AG) Tsakani Maluleke says R4.5 billion has been recovered over the last five years after being flagged as irregular. Some of this came from the recovery of part of the R700 million awarded by the Energy and Water Sector Education and Training Authority (Seta) for training programmes where little to no value was delivered, and in violation of National Treasury rules which require evidence of services rendered before payment. The R4.5 billion recovery over five years may seem like chump change given the magnitude of the problem confronting the AG. Its latest report on local government identifies R8.74 billion lost in 285 municipalities as a result of non-compliance with the law and suspected fraud. Speaking at a Centre for Development and Enterprise (CDE) presentation, Maluleke seemed exasperated at the lack of accountability among those charged with spending public money. 'I've been here at AG for 13 years and we've looked at this from every direction and concluded we have to look at governance. ALSO READ: Government overspent or wasted R49 billion since 2019, says Auditor General 'Basic management disciplines are not in place,' she said. Asked what improvements she observes, Maluleke pointed to the reduction in the number of disclaimers in AG audit opinions – down from 28 to 14 – and the not-insubstantial R4.5 billion recovery in funds. The recovery operations were fortified by changes in the law in 2019 that gave the AG expanded powers to demand action and accountability for material irregularities. These include payments for goods and services not received or of poor quality, penalties imposed on municipalities for non-payment of Eskom and water board bills, and revenue lost due to unbilled accounts or unrecovered debts. The AGSA's expanded powers allow it to issue stronger recommendations and refer cases to bodies like the Hawks or the Special Investigating Unit for disciplinary action. ALSO READ: 'Culture of lack of accountability': Government departments, SOEs rack up R120bn in irregular expenditure No easy task The perception of auditing as a safe and sedentary occupation was shattered by the recent murder of Ekurhuleni's senior auditor, Mpho Mafole. Mafole, a former Auditor-General South Africa (AGSA) staffer, was investigating R2 billion in missing funds when he was gunned down. 'We're under threat of violence every day,' said Maluleke. 'We must get to the bottom of who did what and why. Our thoughts are with his family.' With 4 000 staff, including 900 chartered accountants, the AG's office conducts over 1 000 audits annually across all public institutions, as mandated by Chapter 9 of the Constitution. These audits assess the credibility of financial statements, performance against objectives, compliance with the rule of law, and systemic issues in governance. The reports are intended for citizens, parliamentarians, ministers and departmental management, backed by actionable advice to improve operations. AGSA is one of the country's most respected institutions, having gained public trust by naming and shaming those involved in squandering or looting funds. Its independence is constitutionally guaranteed, making it one of only two global audit bodies with full autonomy, according to the World Bank. ALSO READ: Decisive intervention needed for municipal performance — BLSA Municipalities still an issue Municipalities, however, remain a weak link, with mayors, municipal councils and executive teams failing in their oversight duties. This extends to the provincial level, where many of the responsible leaders don't even bother to read the AG reports. 'When councils are unstable, performance suffers, budgets go unfunded, and infrastructure crumbles,' said Maluleke. Many municipalities misallocate grant funds to pay debts, like last year's Eskom bills, or hire underperforming staff instead of maintaining critical services such as water and electricity. This creates a vicious cycle: economic strain reduces ratepayer payments, squeezing municipal cash flow and crowding out essential infrastructure spending. Operation Vulindlela, set up by President Cyril Ramaphosa to reform the economy as a trigger for growth, shows spending on salaries in SA's cities increased 84% between 2010 and 2014, while property rates and service charges have virtually doubled over the same period. Of the eight metros in SA, only Cape Town achieved a clean audit, meaning it has credible financials and no significant non-compliance. Three metros received unqualified audits, but four – including Johannesburg – failed to present reliable financial statements. ALSO READ: SIU finds no corruption in City of Joburg but Auditor-General has concerns City of Joburg Joburg's deterioration at the hands of squabbling councillors is visible to the eye but preceding this was a steady weakening in its institutional capacity, marked by poor project management and irregular spending – including the award of R972 million in tenders to family members linked city officials and councillors for the extension of the BRT/Rea Vaya bus system in 2023. This was flagged by the AG for its potential conflicts of interest, though she says there is no law that specifically prohibits the award of tenders to close family members or business associates. The real question was whether the City of Joburg failed in its oversight duties. 'Joburg has high levels of irregular spending and does not seem to be getting [it] under control. The [city] council, speaker and mayor don't seem to be decisive,' she said. Maluleke attributes this to poor financial management, noting that municipalities often lack basic disciplines like matching budgets to performance goals. Operation Vulindlela's latest report (July 2025) echoes this, advocating for financial reforms to stabilise municipalities through better revenue collection and governance. High salary costs exacerbate the problem, with some municipalities prioritising personnel over infrastructure, a trend Maluleke links to weak councils fostering a culture of impunity. ALSO READ: Eastern Cape local municipality is the worst run – Auditor General Some bright spots It's not all doom and gloom. Midvaal in Gauteng, with clean audits for over a decade, exemplifies strong stewardship, maintaining quality roads and services. Maluleke's audit staff complain of speeding tickets because the roads in Midvaal are in such good order. The municipality's responsiveness is what sets it apart, said Maluleke, contrasting this with poorly run municipalities where living conditions deteriorate. The 2024 Public Procurement Act aims to close loopholes using technology for better oversight, but Maluleke cautions that no legislation works if rules are flouted without consequence. She advocates for stronger codes of conduct, skilled leadership, and internal controls to enforce accountability. AGSA has come under political attack from different quarters but remains steadfast, protected by rigorous, evidence-based processes. Maluleke doesn't sign reports herself; a qualified team ensures objectivity. 'We should never tolerate [audit] disclaimers,' she said. By referring cases to investigative bodies and pushing for governance reforms, there is hope that the war against impunity and waste will eventually win the day. But we're still a long way from that. This article was republished from Moneyweb. Read the original here.
The Citizen
08-07-2025
- Politics
- The Citizen
Allegations against Mchunu echo Selebi scandal
With suspensions, commissions, and political shielding on the table, will Mkhwanazi meet the same fate as Vusi Pikoli? Towards the end of former president Thabo Mbeki's rule, explosive allegations were made against then national police commissioner Jackie Selebi. Selebi was not only a top ruling party member, but the former United Nations ambassador was also at the time president of Interpol, the international crime fighting organisation. When the head of the National Prosecuting Authority, Vusi Pikoli, attempted to effect arrest and search warrants against Selebi, it resulted in his own suspension and later firing. On Sunday, KwaZulu-Natal provincial police commissioner Lieutenant-General Nhlanhla Mkhwanazi made similarly explosive allegations of possible criminal conduct by sitting Minister of Police Senzo Mchunu and head of this country's detectives, Shadrack Sibiya. Mkhwanazi made the public allegations that much like Selebi back in the day, the top politician and cop have direct relationships with bosses of crime syndicates who have been linked to drug cartels and assassinations. Selebi was temporarily shielded from arrest by the immediate suspension of Pikoli by Mbeki, whom, it was alleged, was a close friend and confidant of the police commissioner. It is widely accepted that President Cyril Ramaphosa owes his first term as president to, among others, Mchunu and former deputy president David Mabuza who died last week. And the question uppermost in everyone's mind is: will Ramaphosa follow in Mbeki's footsteps to first shield his political ally Mchunu and, second and most importantly, put in motion steps that might result in the end of the career of Mkhwanazi? It is not every day that a provincial police commissioner alleges that his political principal has been caught out in a lie to parliament about being an associate of an alleged crime syndicate boss. The easiest way to make all these unsavoury allegations go away is to get rid of the one making the allegations, by either removing them from their position or, as is common in mafia movies, make him an offer he cannot refuse – resign or be killed. ALSO READ: 'Police are the chief criminal syndicate': Saps R120bn budget criticised by MPs The third option, a favoured method in this country's law enforcement, is to suspend and charge him with trumped-up violations of the police's code of conduct. The president's way of shielding those close to him politically is to 'apply his mind' to matters. It will not shock anyone if he institutes a commission of inquiry into Mkhwanazi's allegations, while Mchunu and Sibiya continue in their jobs and Mkhwanazi is sidelined. Mkhwanazi's allegations, if not proven untrue in an official manner, will confirm that the descent of this country into a mafia state is in full swing. It is known that kidnappings have now become an accepted daily occurrence. The recent assassination of financial forensic investigator in the Ekurhuleni metropolitan municipality showed that the murder of Babita Deokaran under similar circumstances was not the first, nor the last. These crimes will continue because those in charge protect the criminals. There are calls for Mkhwanazi to follow 'the proper' police channels and not act 'rogue'. Those people must ask Pikoli what following the proper channels did for him and his career. Mchunu and Sibiya can easily refute the allegations made by Mkhwanazi under oath. And if they prove him to be a loose cannon who is out to destroy their careers, he will pay the price. But people deserve to know that this country is not being run by criminals with a badge. NOW READ: 'We don't want him to be a pop star': Allegations by KZN police commissioner Mkhwanazi sparks uproar
Zawya
05-03-2025
- Business
- Zawya
South Africa: Discovery's financial results reveal a 34% surge in earnings, showcasing global growth
Discovery today released its interim financial results for the six months ending 31 December 2024, highlighting strong performance and sustained growth. Group chief executive officer Adrian Gore attributed the success to strategic investments in global expansion and new ventures, particularly Discovery Bank, which achieved monthly profitability in December ahead of schedule. With its two key composites—Vitality and Discovery South Africa—well-positioned for scaled organic growth, the Group is entering a new phase of focused execution. 'Following the emergence from a period of sustained investment, we have seen a strong performance, which is expected to result in further growth in profit from operations in 2025, exceeding our medium-term ambition of 15% to 20%, driven, in particular, by a second-half recovery in the UK," Gore said. The period delivered growth in normalised operating profit, up 27% to R7,020m, headline earnings, up 34% to R4,267m and normalised headline earnings, up 34% to R4,350m. The Group's embedded value increased to R120bn and the positive contribution from experience variances over the period reflected the competitive dynamics of the Group's Shared-value Insurance model. The key financial highlights include: Discovery South Africa: Normalised operating profit increased 27% to R5,520m as the composite focused on driving quality new business at appropriate margins, with new business increasing 6%, excluding the prior period take-on of the Sasolmed closed medical scheme. Discovery Bank: Delivered a 42% increase in total revenues and has now achieved monthly operational profitability with continued excellent performance across all key metrics. It is well positioned to leverage its scale, data and capabilities to drive growth across the composite. Discovery Health: The administrator of Discovery Health Medical Scheme and 18 closed medical schemes delivered robust earnings growth, while continuing strategic investments in technology, innovation, artificial intelligence, and personalised healthcare. New business increased 9%, excluding the Sasolmed closed medical scheme take-on in the prior period (decreased 31%, including Sasolmed). Discovery Life: Delivered strong earnings and cash generation, supported by positive claims experience, while maintaining its market-leading retail market share and new business margins. Group life new business, which tends to be volatile, declined over the period. Discovery Invest: Delivered significant earnings growth, benefitting from strong market performance and some one-off gains for the period. Discovery Insure: Delivered an excellent recovery in operating margin, and also benefited from benign weather conditions. Vitality: The composite's normalised operating profit increased by 27% to R1,500m, and new business API increased 8%. VitalityHealth: Operating profit increased 15% to £25.9m (14% to R599m). The business has successfully actioned price adjustments over the past 18 months to mitigate increased private medical insurance utilisation, with the strong retention of in-force business resulting in a 16% increase in earned premiums. VitalityLife: Operating profit increased by 8% to £14.1m (8% to R327m). The business utilised its advanced price optimisation to deliver a 19% increase in new business Annualised Premium Income of high quality (39% excluding automatic contribution increases), despite a stagnant UK market. Vitality Network: Operating profit increased by 20% to US$18.9m (15% to R339m), as margins increased from 31% to 35%. Membership grew by 26% to 6.2 million, demonstrating the global relevance of the Shared-value Insurance model. The Group's share of Ping An Health Insurance's after-tax operating profit increased by 23% to R424m, following strong gains from Chinese bond and equity market movements in the period and continued operating delivery. Within VHI Other, Vitality USA acquired WellSpark, further progressing its expansion from its traditional focus on the employee wellness market towards the significantly larger addressable market of integrated digital health and care. Amplify Health successfully deployed nine health tech solutions across multiple Asia-pacific markets. Gore highlighted that Discovery's growth strategy is based on the efficacy, repeatability, and scalability of its model through organic growth and global partnerships. The Group's strong performance demonstrates the effective deployment of the model and its applicability across the different industries and markets. Driving sustainable growth The model's evolution to hyper-personalisation, leveraging the Group's data and technology assets, will continue to improve key value drivers. The Vitality AI platform and its capabilities will allow greater and more precise understanding of people's health risks and determine the exact actions to improve health outcomes, quantifying the impact on health and mortality. Gore further emphasised that the Group demonstrated continued financial resilience and remains well positioned to manage potential volatility in the current macro-environment. He said the two powerful and focused composites – Discovery South Africa and Vitality – and the strong platforms in each, are resulting in growth in earnings, cash generation, and return on equity, as well as lower leverage. In line with this, the Group has declared its interim ordinary dividends for the period at 87 cents per share, consistent with the growth in normalised headline earnings. All rights reserved. © 2022. 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