The Committee was briefed by the Department of Water Affairs (DWA) on budget and actual expenditure for the period ended 31 December 2012. Due to time constraint and the length of the presentation, the DWA presented only few programmes, namely administration, water sector management, water infrastructure, and regional implementation and support programme.
The DWA presentation focused on budget and actual expenditure per programme, as well as budget and actual expenditure per economic classification. The Department's total variance was 50% and expenditure was 50%. The DWA programmes included administration, water sector management, regional implementation and support, water sector regulation, and international water cooperation. A breakdown of the budget was given. Under expenditure had occurred because of vacant posts and resulting delays in the procurement of office furniture and equipment. Various delays in municipalities had contributed to under expenditure on infrastructure.
The Department reported the consolidated Departmental expenditure per programme and economic classification, indicating voted funds, earmarked funds, and percentage spent. The breakdown of expenditure outcomes as of 31 December 2012 was summarised. The DWA explained actions taken to deal with challenges, and those actions included collaboration with provinces, restructuring of the Department, establishment of the Committee, capacity building, and improvement of service delivery to places that had service delivery protests.
Members were unsatisfied with the presentation as they found it confusing and hard to understand. As a result, it was not easy for them to interrogate the presentation and discuss it with DWA officials. The Department was asked to leave so that Members could discuss the presentation and provide the Department with feedback on what needed to be improved. Members emphasised that a serious workshop with the Department was needed.
Briefing by the Department of Water Affairs on Third Quarter Expenditure Performance
Ms Nthabiseng Fundakubi, Chief Financial Officer (CFO), Department of Water Affairs (DWA), said that the presentation was a breakdown of the Department's budget and expenditure per programme and economic classification. Expenditure outcomes as of 31 December 2012 was summarised. Programmes as well as their budget, expenditure, variance and percentage spent were described. The Department's total variance was 50% and expenditure was 50%. The consolidated Departmental expenditure per programmes and per economic classification was described, indicating the voted funds, earmarked funds, total expenditure and the percentage spent. The DWA programmes included the following: administration, water sector management, water infrastructure management, regional implementation and support water sector regulation, and international water cooperation. Ms Fundakubi said that each programme had its own budget, voted funds, earmarked funds, sub-programmes, economic classification and percentage spent.
Ms Thandeka Mbassa, Deputy Director-General, DWA, reported that the under expenditure on this programme was due to vacant posts. The Occupational Specific Dispensation (OSD) technician posts had not been filled because suitable candidates were not found. As a result, funds allocated for the procurement of office furniture and equipment could not be spent.
Various delays in municipalities had contributed to under expenditure on infrastructure. These had included prolonged procurement processes, the appointment of professional service providers, legal disputes between municipalities and contractors, service delivery protests, constructions of projects progressed slowly due to floods, and municipal institutional challenges. Hydro equipments had been ordered abroad which affected the expenditure for machinery and equipment. These machines were expected to be delivered and processed in the fourth quarter.
An amount of R20.8 million in respect of Harties Water Quality had been committed and it was expected that invoices would be processed in the third and fourth quarter of the financial year. There had been delays in land expropriation and approval of Water License after verification in Mpumalanga. Water service projects had received invoices which amount to over R186 million, and it was expected that they would be paid in January 2012. These projects were implemented by Water Trading Entity on behalf of Main Account and based on the projected expenditure for the entire and projects plans, and it was anticipated that R620 million would be fully used. The DWA reported that the delays for processing of invoices were due to change in payment process as a result of appointment of the programme manager. The expenditure was expected to increase in the coming months.
Ms Zandile Mathe, Acting Deputy Director-General: Infrastructure, DWA, summarised expenditure for augmentation funded projects as of 31 December 2012. The DWA was involved in the following projects: Olifants River Water Resources Development Project (phase 2A); De Hoop Dam; Olifants River Water Resources Development Project Bulk Distribution System (sub phases 2C and 2D); Great Lethaba Water Project (phase 1); Tzaneen dam and Nwamitwa dam; Dam Safety Rehabilitation Programme (the DWA did not do very well in that programme); Raising of Clanwilliam dam, and Mokolo Crocodile Water Augmentation Project (phase 1).
Other projects that the Department was involved with included Development Raising of Hazelmere dam, Great Lethaba Water Project Distribution (Mopani dam), and other potential new projects such as an enterprise resource planning (ERP) system upgrade, National Water Resources Infrastructure (NWRI) support, and financial management. The budget, actual budget, percentage spent, original budget, adjusted budget, and adjustments were described (see attached documents for more details).
Mr Balzer, Acting Director-General, DWA, said that the Department had taken some actions to overcome the challenges. Those actions included collaboration with provinces, establishment of a committee, improvement of service delivery at places where protests took place, capacity building, and reorganisation of the Department for better functioning. So far, the DWA had signed Memorandums of Understanding (MoUs) with provinces, and it had begun working with KwaZulu Natal and Mpumalanga provinces.
Ms G Mashigo (ANC) said that the presentation was too confusing. She wanted clarity on the working together between national, provincial and regional bodies.
The Chairperson was concerned that National Treasury was not working together with the Department of Water Affairs, and about challenges around money transfers from the DWA to the entity.
Ms L Yengeni (ANC) also felt the presentation was unclear. Money that was budgeted for projects had been moved to other projects, which was confusing. She suggested that there should be a workshop with the DWA very soon.
Mr G Snell (ANC) noted that was difficult to challenge the presentation as it was not clear, and the layout was not understandable. He asked the Department whether it was comfortable with the layout of the presentation.
Dr S Van Dyk (DA) agreed that the presentation was confusing and said that the Committee was most interested in figures, clear information, and progress. He suggested that the Committee should identify issues that were confusing and ask the Department to come back with clear, detailed reports on those issues.
Due to time constraints and the dissatisfaction from Members, the Chairperson suggested that the Department leave and Members stay behind and have a caucus meeting about the presentation. The Committee would inform the Department about the outcomes. Then the Committee would invite the Department to present again.
The meeting was adjourned.
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