Johannesburg City Power has revealed that fraudulent activities within the entity have led to massive financial losses, with fifteen employees now facing disciplinary action over their alleged involvement in a multimillion-rand fraud scheme.
The revelations come after the Auditor General (AG) released a scathing report, highlighting poor internal controls within the power utility. These weaknesses have resulted in billions of rands in irregular expenditure, raising concerns about mismanagement and corruption.
Fraudulent Invoicing and Contractor Misconduct
Following the AG’s findings, City Power launched an internal investigation into the entity’s financial losses. The probe uncovered fraudulent activities involving contractors and employees who allegedly colluded to defraud the power utility.
Johannesburg City Power
- Some contractors were found to have submitted fraudulent, duplicate, and inflated invoices.
- This resulted in millions being lost to corrupt financial practices.
- Payments to these contractors have since been frozen as City Power conducts a detailed audit of its financial dealings.
City Power spokesperson Isaac Mangena confirmed the findings, stating that the company was taking firm action against those implicated.
“We are also cooperating with law enforcement agencies to ensure that criminal elements are dealt with swiftly.”
City Power Employees Implicated
While contractors played a role, City Power has also discovered that internal collusion between its own employees and service providers contributed significantly to the financial misconduct.
- Fifteen City Power workers are currently facing disciplinary hearings over their alleged involvement in the fraud scheme.
- The employees are accused of facilitating and approving the fraudulent invoices, effectively enabling the corruption to continue unchecked.
- This internal corruption and collusion are also being blamed for widespread infrastructure theft, which has further crippled the power utility.
Mangena emphasized that City Power will not tolerate corruption and will pursue further legal action if necessary.
“The utility will not hesitate to take further legal action against any individual or any of our employees found implicated in corrupt activities.”
Irregular Expenditure and Systemic Failures
The Auditor General’s report painted a bleak picture of City Power’s financial health, attributing its massive irregular expenditure to weak internal financial controls.
- The entity has reportedly lost billions due to poor oversight and financial mismanagement.
- Fraudulent activities have exacerbated City Power’s financial struggles, making it difficult to maintain critical infrastructure and provide stable electricity supply.
Impact on Johannesburg Residents
The financial mismanagement and fraud at City Power have direct consequences for Johannesburg residents.
- Delayed infrastructure projects: Money lost to fraud could have been used to improve electricity infrastructure, preventing frequent outages.
- Increased electricity tariffs: Financial losses may lead to higher electricity costs for consumers as City Power tries to recover lost funds.
- Longer power restoration times: Theft and fraud have led to resource shortages, making it harder for City Power to repair damaged infrastructure quickly.
City Power’s Next Steps
To prevent further corruption, City Power is implementing stricter financial controls, including:
- Suspending all payments to contractors under investigation.
- Enhancing oversight on financial transactions.
- Strengthening internal monitoring to detect fraudulent activity.
- Working closely with law enforcement agencies to ensure those responsible are held accountable.
Conclusion
The massive fraud scandal at City Power highlights serious governance failures within Johannesburg’s electricity supply system.
While the entity has promised tough action against corrupt employees and contractors, the long-term solution requires stronger financial controls and greater transparency to prevent further losses.
For now, residents will have to wait and see whether these interventions will be enough to restore financial stability and improve service delivery.