The Minister was unable to brief the Committee due to a matter he had to attend to at short notice.
The Committee was briefed by Ms Matlakala Motloung, Acting Director General of the Department of Water and Sanitation, as well as by the Mr T Shabangu and Mr S Kheledi, of the Auditor General’s office, around Vote 38 and the outcomes of the audit that was carried out. Discussion was mostly based on the need to develop better performance monitoring and measuring tools to ensure that projects (programmes) are efficiently conducted and completed. The goal was to be able to use performance measuring markers or tools that are easy to understand and can be used to track progress throughout the implementation period.
The Department of Water and Sanitation (DWS) briefed the Committee, followed by presentations by representatives from Auditor General’s office.
AGSA noted an improvement on the Department side with regard to the preparation of the APP compared to the previous years. On the whole improvements were headed in the right direction and that there was light at the end of tunnel with regard to expectations being gradually met. The need to use Smart principles was reiterated.
It was emphasised that moving away from percentages would in effect allow the opportunity to come up with a new agreed upon method or process of measurement.
The meeting was postponed until the relevant authorities could be contacted, in particular the Minister.
Apologies had been received from the Minister who was unable to brief the Committee due to a matter he had to attend to at short notice.
AGSA review of the 2015/16 APP for the Department of Water and Sanitation
Mr Tshepo Shabangu, AGSA, said there was an improvement on the Department side with regard to the preparation of the APP compared to the previous years. There were a lot of issues with regard to the way they choose their targets and the performance indicators. He highlighted the key points, which included the PFMA Audit Outcomes for 2013/14 in summary format.
Mr Shabangu discussed very briefly the outcomes of previous audits whilst highlighting slight improvements between each year. He then went on to the main business of the day, which focused on the results of the 2015/16 review of the APP. The first issue he raised was in reference Programme 3, specifically to the performance indicator number 29, which had a definition, not found satisfactory in terms of being well defined. They could have done better in defining the indicator but that was an issue that could be fixed. Second he spoke about two issues with Programme 4, the first of which was the indicator PPI-47 and the second was PPI-49. For PPI-47 there was a problem understanding what the department meant by the ‘water-related project’ that the farmers were being assisted with and for PPI-49, what the Department meant by ‘adequate sanitation services’ in the APP. He reiterated that these concerns could be rectified and that it was not a train smash, making reference to how the Department has been cooperating. Programme 5 had no issues highlighted with regard to indicators in the 2015/16 APP.
Mr Shabangu then moved on to Vote 38 and said a comparison had been made between the 2014/15 APP review and the 2015/16 APP review of the findings. There were more findings in the 2014/15 APP than in the current one hence there was an improvement with regard to the manner in which the Department undertook preparations for the APP. There were no issues with the targets that the Department set for the 2015/16 APP. In the 2014/15-year the targets were not specific and measurable marking an improvement from the previous year.
Mr Shabangu concluded that the improvements were headed in the right direction and that there was light at the end of tunnel with regard to expectations being gradually met.
Water Trading Entity
Mr Stephen Theledi (AGSA) said it was important to note that they were talking based on a version that was submitted but had to be reviewed so that the department could actually go back and consider whether they would make adjustments or non-adjustments and that it could happen that he would refer to the version that had since been changed. It was primarily the intention of the peer review that the Department or entity could, prior to finalising or solidifying the APP target, assess whether those targets were considered as meeting the Smart criteria or not. At the end of the year it was audited to see two things: firstly, did the targets make sense, and were the indicators well defined and reading properly? At that time there was not much the department could do about it because it would have already been finalised and approved and therefore a document in use. So all that they could really do is to report those issues even they were not well defined and did not meet the Smart criteria. This is the reason why the peer review always happens earlier so that before finalising the APP the department can correct some of the issues.
When looking at the Water Trading, which began on page 12 of the main document, there were issues on the definitions of the indicators. The main concern was when construction projects were measured on percentages, which were quite problematic because they were more of an engineer’s assessment of the specific issue. Two different engineers could easily come up with different percentages for the same target purely because there was not a well-defined process of how they should come up with the percentages. A second problematic issue was that of providing supporting evidence against those targets when the measurements are in percentages. This is why there was a huge block on the well definition of these things because when measuring the dipsticks become different and too subjective to each individual. This was a concern on Programme 3, infrastructure development, where WTE had a huge footprint. AGSA did not have a problem with the bid for the Programme 5 activities that WTE had a footprint on. He made reference to the comparisons where the Department was fair in their use of percentages, which was a big problem in the previous years. On the revised APP there was a move away from these percentages because of this problem. These percentages had to be measured against things like Smart criteria – whether it’s specific or measurable and so forth - which caused serious challenges for AGSA and also for the department. Moving away from percentages would be an improvement.
The Chairperson said the challenge would be that AGSA was likely to be talking equally to the Department. The issues raised by the office of the Auditor General were quite straightforward and the intention was for Members to be empowered as they prepare for discussions with the Department.
Mr D Mnguni (ANC) was happy to know that the Department was moving in the right direction as far the Auditor General’s report indicated. He asked if there was any measurement by the Department to show the percentage in this current period? Were there any agreements with the Department? He also addressed the issue of context that was not well defined by asking if there had been an agreed timeframe in which the targets should be met.
Mr Shabangu (AGSA) responded that this question accurately outlined the major challenge they faced because the percentage method lacked a well-defined standard measure or process. There simply wasn’t a standard checklist that would assist in assessing what made up the percentage and how AGSA came to it.
He gave an example of how two engineers would have been asked to come up with a percentage and they would formulate different answers. That was why the percentage system had to be done away with. He suggested instead that there be an agreed upon measuring or standardised process which could be used to easily assess progress. In terms of the well definition of the timeline, AGSA communicated the issues to the department earlier so that they could fix them prior to finalising the APP. Hence in the current APP there were instances where percentages were no longer used.
Ms Motloung, Acting Director-General: DWS welcomed the comments and inputs from the AG reiterating the need to use Smart principles. She said it was always difficult to measure percentages unless there were pre-determined objectives to measure them against. Therefore, they have tried to move away from percentages. She also said that she liked that there was opportunity to change the APP and that when it came the idea was to move towards a measurable Smart principle. This would certainly help measure the actual work produced with the targets set.
Mr Mnguni (ANC) asked what the balance between the actual work done and the records given to the Auditor General was. He wanted to know if they had developed a mechanism to change the measuring of the actual work done because every time the work was not completed.
Mr Shabangu (AGSA) responded that they physically went to the location to assess what has been done and sourced an expert to assess this, which is where the percentages come from. Disagreements developed when you hired two different experts and they each come up with their own percentages based on their preferred methods. Management will have their own percentage outcome whilst the outsourced expert has his/her own. He then reiterated once more that moving away from the percentages would in effect allow the opportunity to come up with a new agreed upon method or process of measurement.
Mr T Makondo (ANC) asked how often AGSA checked actual work against the expenditure of the Department. He followed that up by asking how often a clean audit was conducted.
Ms Z Balindlela (DA) said that it was a good thing that they were moving away from the percentages but that not all projects were affected. She asked how these projects would be redressed.
Ms H Kekana (ANC) asked how the old AG would be supporting the department in this regard.
Ms Zandile Mathe (DWS) said that they had been trying this year to move away from percentages and that they would be engaging the office of the AG to work out a process that would be effective in the monitoring of the construction of the dam since it is supposed to be giving water to people. She said government had developed a new toolkit that all departments tried to follow. The idea is that whilst you’re building the dam you should start planning how you will get the water to the people, how you will get it to the farmer and thus it’s a bigger framework. She said this also shows how we are configured as the structure that delivers water. This would not happen overnight but they would try to move with speed to ensure these things happen to due timeframes.
Mr Shabangu responded to the question on actual work and expenditure. There could be a number of reasons why there are clean reports but poor service delivery. Reports are not always entirely truthful or accurate. He gave an example of how the report details how a target was not achieved and that they could not fault that because it states the reality or truth. He said what then happens is that the auditors subsequently validate that non-achievement and that’s where the issues lie. In terms of looking at the actual work and the expenditure, a regularity audit happens throughout the year that is then extended into the financial usage. There are always challenges but there is also a need to always look at the context of the challenge.
Ms Balindlela said the department’s monitoring tools were inadequate and needed to be strengthened.
Ms Motloung said that she thought Ms Balindlela was talking about projects that have been abandoned and unfinished, and conceded that as a Department they have not had good performance and monitoring tools. Currently they were setting a performance-monitoring unit in the Department to ensure each and every project succeeds. The problem of not having a proper monitoring mechanism in place was the inability to monitor throughout the project period and thus at the end of the financial year money that was meant to be spent was not spent.
Ms Mathe agreed with AGSA that the Department had not been performance monitoring properly and the matter must be dealt with by the end of the year. The Department wanted to view the finer details of every single project to ensure that this issue starts being handled alongside the AG. On the projects that were delayed as per the APP, measures were put in place to make the project move in time with the implementation plan. There had been challenges with the budget but the licence at the quarry had been approved. The Department requested that they produce an acceleration plan to meet the targets. There were political reasons for delays in most of the projects where political heads do not agree on contractors for example. However, these issues were all being dealt with and none of the projects have been abandoned.
Mr Shabangu said that the delayed projects were tricky because even though they were delayed they should still have been reflected on the APP so that the committee could track and follow-up. He responded to Ms Kekana’s question concerning the outstanding number of debt saying it becomes a challenge. These types of issues were only checked in the financial statements at the end of the period. Because of this they could not assist beyond the measures they have already put in place to try collecting the outstanding figures.
The Chairperson asked if there was a department that would be expected to play an oversight role at a broader level. He was concerned with the performance information and wanted to know if contingencies were in place. How do we improve the lives of people on the ground?
Mr Kheledi agreed on these concerns, the Department would have to go back to the drawing board and work on these very challenges they have been facing.
The Chairperson thanked the delegations for their presentations as well as the Members for their time and participation. The meeting was postponed until the relevant authorities could be contacted, in particular the Minister.
The meeting was adjourned.