Parliament, Thursday 5 October 2017 – The Portfolio Committee on Water and Sanitation has resolved to invite the Special Investigating Unit (SIU) to give an update on the investigation into tender processes within the Department of Water and Sanitation.
The decision to invite the SIU was necessitated by the findings by the Auditor that the inability to follow Supply Chain Management systems in implementing some projects led to the qualified audit opinion by the department and the Water Trading Entity (WTE). The Committee has reiterated its strongly held view that adherence to governance standards is necessary if taxpayers are to get their money’s worth.
The Committee remains disappointed that the department and the WTE continue to highlight the low debt recovery from municipalities and water boards as a challenge. This is a longstanding matter that should have been resolved through intergovernmental relations initiatives.
The Committee is further concerned that the department incurred a net loss of R89m, an overdraft of R194m and unauthorised expenditure of R406m during the year ended 31 March 2017. Furthermore, the R2.186bn overdraft facility by the WTE is a matter of concern that has placed significant pressure of the entity’s ability to continue as a going concern and this must be addressed as a matter of urgency.
The lack of proper planning, project management and lack of systems within the department was highlighted by the Committee as a matter of concern that had a ripple budgetary effect over succeeding financial years. The financial pressures caused by accruals and receivables on the budget of the department also remain matters of concern.
The expenditure of voted funds vis-à-vis the achievement of targets was also an area of concern for the Committee. Overall the department spent 99.7% of the budget but has only achieved 53% of the targets. While the Committee understands the cost escalation pressures especially when dealing with large infrastructure development projects, it is of the view that the difference between budgeted funds and achieved targets is unacceptable.
The Committee has also raised its reservation in relations to spending in programme 3 (Water Infrastructure Development) within the department. While spending within the programme was at 99.6%, the department achieved on 28% of targets. The vagueness of projects which the money was spent on was also a matter of concern that the Committee highlighted.
The expenditure incurred by the department for the war on leaks programme was also highlighted as an area of apprehension, especially considering that the programme was not planned and budgeted for.
As a result of concerns raised, the Committee has instructed the department to provide a detailed report of the expenditure within the war on leaks programme. Furthermore, the department is to provide a detailed report on the spending in programme 3 within the department.
ISSUED BY PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON WATER AND SANITATION, MR MLUNGISI JOHNSON
Media enquiries or interviews with the Chairperson please contact:
Name: Mr Malatswa Molepo (Mr)
Parliamentary Communication Services
Tel: 021 403 8438
Cell: 081 512 7920
E-mail: mmolepo@parliament.gov.za
Arrange a tour