Durban - eThekwini Municipality’s controversial billing system, which was installed at a cost of more than R1 billion, faces the chop as it is not compatible with some of the “financial control tools” that are to be implemented by the City.
The Revenue Management System (RMS), which was implemented in 2016, was a source of endless problems for ratepayers who complained of inflated bills.
The system also came with a price tag of more than R1bn after costs had ballooned from an initial amount of about R150 million.
It emerged during a special executive committee meeting yesterday that the city could soon begin the search for a new billing system, a move that took opposition party councillors by surprise.
They said the municipality had spent a fortune on RMS and that there was no guarantee that the new system would be better.
The councillors were told during the briefing that the RMS system was not compatible with the Municipal Regulations on Standard Chart of Account (mSCOA).
The mSCOA project has been spearheaded by the National Treasury with the aim of improving financial reporting across local governments. It was initiated to address concerns around inconsistencies in local government financial processes, irregular reporting, and poor data integration. It enforces accounting standards, including for the collection of financial data.
The municipality has to table a roadmap for the introduction of the system ahead of its implementation by December 2024.
Officials with an understanding of the project said it was more cost-effective to go out and source a new system that could be configured to comply with mSCOA than to spend more money trying to fix a system that was already nearing the end of its lifespan.
A report tabled by the City on the matter, which highlighted an extract from the MFMA (Municipal Finance Management Act) circular on mSCOA requirements, said systems of financial management and internal controls must as a minimum comply with explicit business requirements as contained in the mSCOA regulations.
These included that it must provide for the hosting of mSCOA and associated details, must have access to hardware that is sufficient to run the required software solutions, and must provide a full seamless integration between the core financial system representing a general ledger and any third-party systems.
“Municipalities are required to evaluate the functionality of the current system against the business processes and technicalities stipulated in the circular.”
It said any financial management system and internal control, as a minimum, must comply with seven main business and process components. These are general ledger, billing, supply chain management, asset management, inventory and stores, budgeting and planning, and human resource and payroll.
Robert Dlamini, the chief information officer of eThekwini Municipality, told councillors that the RMS was not compatible with the mSCOA system and it would be too expensive to reconfigure the RMS to comply with this system.
The councillors, who estimated that the RMS had cost more than R1bn, demanded to know the actual figure spent on RMS to date.
Dlamini said he would compile a report detailing the costs related to the development and maintenance of the system.
He warned that failure to provide the National Treasury with a roadmap on mSCOA could result in the municipality losing its grants. The City has already been warned by the National Treasury that its progress in this respect is too slow.
DA councillor Yogis Govender said based on the explanation given by municipal officials, it looked like the municipality needed a new system.
Govender said RMS was a headache because it produced erroneous billing and inflated bills which led to protracted disputes and payments being made under duress by ratepayers.
“The RMS, which was initiated in 2016, has left many ratepayers fuming over the years, after they were slapped with inflated utility bills.”
IFP councillor Mdu Nkosi said: “That report says they want to get rid of RMS. That system has cost ratepayers a fortune, but is failing them. I asked them how much they had spent on it so far and they are avoiding that question.
“To this day, we have not fully migrated to the RMS system. Whatever system they plan to implement next, have they tested it to ensure it will not be another waste of taxpayers’ money?” asked Nkosi, adding that the IFP was reluctant to support the project.
Ish Prahladh, of the Reservoir Hills Ratepayers’ Association, said it would be good riddance if the system was done away with, saying it had not worked from the start.
“The whole system has been pathetic. There are people who have been paying R1 500 for some of their services, but now get a bill of R13 000.”
He said the billing problems were worsened by staff who were untrained or not interested in doing their jobs, and who introduced errors. “They need to bring in a system that has been tried and tested,” said Prahladh.