DWS audit action plan & outcome of contestation of audit findings; response to Limpopo oversight visit committee report

Water and Sanitation

21 February 2018
Chairperson: Mr M Johnson (ANC)
Share this page:

Meeting Summary

The purpose of the meeting was to discuss the responses to the findings of the Auditor-General and the contestations thereof by the Department of Water and Sanitation (DWS); outstanding issues from the last meeting between the Committee and the Department; and issues arising from the oversight visit to Limpopo.

The Chairperson cautioned that calling into question the work of constitutional institutions such as the office of the Auditor General, especially in public had the potential of undermining the Constitution itself. The department had been requested to prepare a report which would be presented to the Parliamentary Standing Committee on Appropriations and the report was duly handed over. The matter of the public contestations of the Auditor’s report could not be discussed as the Minister who made the public comments was not present at the meeting.

On the outstanding issues from the last meeting between the Committee and the Department, human resource management matters took centre stage, particularly the transfer of the former Director-General, Mr Mashitisho, and the suspension of the Deputy Director-General for Regulations and Compliance, Anil Singh. The former had been transferred to COGTA even though there were allegations of improper conduct. The Department did not take disciplinary measures but instead entered into a settlement which resulted in his transfer.

Members asked why the former Director General had been transferred instead of being disciplined. It emerged that in the Public Service Act, Ministers had no power to discipline erring officers as this power was vested in the President and this authority had not been delegated. There were calls by the Committee for this power to be delegated to the Ministers by the President so that they could effectively exercise their oversight roles in their respective ministries and discipline erring officials. The cases of the two officials could not be discussed as they were before the courts of law, but the Committee demanded to have access to the charge sheets as well as the terms of the settlement..

The performance of the Water Boards was discussed, and it was evident that most of them had challenges, particularly the Overberg Water Board which had not fulfilled the statutory requirements of presenting Annual Plans and budgets to Parliament. The Committee asked why this had been allowed to happen and a resolution was made to assist the Water Board by seconding staff from the Department to assist restore the financial systems which had collapsed.

The Department responded to the issues that emerged from the visit of the Committee to Limpopo. Particularly concerning was the fact that there were some parts of Limpopo that had insufficient or no water because some farms were diverting water from the rivers and streams and storing the water in dams. The Department was given one month to take measures that would ensure that this practice was stopped. The Department reported that the practice of diverting the water and storing it in dams was lawful and that there was a need to amend the Water Act. The Committee requested DWS to bring before it a draft bill to make amendments.

Meeting report

The Chairperson said both the Minister and Deputy Minister had sent in apologies stating that they were unable to attend due to other commitments. He reminded the Members that in case of sickness, it was important to get a doctor’s note and without it the apology would not be recognised. The purpose of the meeting was to discuss the responses to the findings of the Auditor-General and the contestations thereof by the Department of Water and Sanitation (DWS); outstanding issues from the last meeting between the Committee and the Department; and issues arising from the oversight visit to Limpopo. He urged respect of the Chapter 9 institutions and said contesting the findings of the AG in public was not right and that undermining institutions like the Office of the AG was undermining the Constitution itself. Acknowledging the apology, he said the Minister should have prioritised Parliament given the gravity of the issues relating to the AG. It would have been better for the Minister who had publicly contested the AG’s findings to respond to some of the matters at hand.

Mr L Basson (DA) said he agreed with the Chairperson adding that it would be wrong for the Committee to ask the Acting Director-General to comment on what the Minister had said because it was the latter who made the comments challenging the audit findings. However, the DG was at liberty to comment if he had information regarding the background to the Minister’s comments.

Acting DG, Mr Sifiso Mkhize, DWS, said it had never been the intention of the Department to undermine the Office of the AG and that he would make comments regarding the way forward. He disclosed that the Minister had a scheduled meeting with the AG in the evening at 6 O’clock to discuss the issues and that a formal response would be issued after the meeting.

The Chairperson, said that they would have to wait for feedback from that meeting when the Minister would come back to report to the Committee. He, therefore, proposed going straight into the outstanding issues from the last meeting beginning with the request that had been made by the Committee through a letter to the Department asking for information regarding the names and contractual agreements of all the staff members in the Ministry. It was also a follow up on the organogram that had been tabled by the Department. Names and contractual agreements of all the deputy director generals who did not form part of the formal structure were also requested.

Presentation by DG on Staff

Mr Mkhize said he would respond in line with the letter he received from the Committee dated 19 February 2018. He said they had provided all the names of the staff in both the offices of the Minister and the Deputy Minister. In the Minister’s office there are 11 people and details concerning their contractual agreements and locations had been included. The Minister has two offices, one in Cape Town and the second one in Pretoria. In the office of the Deputy Minister there are six posts and all the details had also been indicated. There are nine DDG’s in the department with their qualifications listed, as well as information regarding three who are in an acting capacity. He said he was the CFO but was acting as DG and acting in his position as CFO was Ms Rebecca Nkomo. On the matter concerning the charges levelled against Advocate Anil Singh who is the Deputy Director-General of Regulations, they had provided the charges. Concerning the charges against the Director General, Mr D Mashitisho, who had since left the Department, he had sought an opinion from legal services as to whether the charges could be discussed since they had a settlement with him and he was informed that he needed to get Mr Mashitisho’s consent. The charges were part of the settlement. He also submitted the Department’s report on deviations and expansions; accruals and commitments; and irregular, fruitless and wasteful expenditure for the 2016/17 financial year which would be submitted to the Standing Committee on Public Accounts (SCOPA) on 27 February 2018 at a public hearing. He also informed the Committee that the provincial heads of Limpopo and Mpumalanga, and the Chief Executive of Lepelle Northern Water, Mr P Legodi, were present at the meeting so that they could report on the oversight visit.

Discussion

Mr Basson asked what triggered the disciplinary inquiry into Advocate Singh because the dates indicated that it happened in April 2016 and he asked why he was not charged earlier. He also asked how letters were sent to the boards, whether it was through the DG, DDG or the Minister’s office.

Mr T Makondo (ANC) asked what recourse the Committee had if people appeared before it and did not tell the truth. He told the Chairperson that it may be an issue that could be taken up with the legal unit at Parliament if such a situation occurs. He disputed what the Acting DG said regarding the former DG and the alleged settlement as it did not make sense. He asked how an official who had been charged enter into a settlement and then be transferred to COGTA. He requested that the terms of the settlement be availed to the Committee so that they could look into it because it could not possibly be true. The information that the Acting DG was giving was a lie and that was why he requested the Chairperson to consult the legal department about a possible course of action to be taken. He further asked how many DGs the Department had in 2016. He believed that they had around 6 DDGs around that time and he wondered how the number had come to nine or 10. He asked which of those are new appointments. He was of the view that DDG’s headed branches of departments and he requested to be educated if that was not the case.

Mr D Mnguni (ANC) said he had been looking at the list of qualifications and he asked when it is right to state that a person has qualifications. He had observed that some members of staff were said to have qualifications before they completed their courses. About the charges levelled against Advocate Singh, said fraud was criminal deception intended to result in financial and personal gain. The charges against Advocate Singh included signing directives which he had no authority to do when he was acting. Elsewhere there was information that he could sign the directives since he was acting so there was conflicting information in the charges.

The Chairperson said there was need for guidance from the Department as to whether some cases were sub judice. It was fine for the Committee to be in possession of the charge sheets, but guidance was needed on which cases could be discussed without prejudicing the due court processes. However, information about the whereabouts of the former DG was an open issue but the reporting by the Department had been inconsistent by both the Minister and the Acting DG hence the question raised by Mr Mukondo.

Mr Mkhize disclosed that Advocate Singh’s case was before the labour court.

Mr J Mahlangu, Deputy Director-General: Corporate Services, DWS, said the matter of Advocate Singh arose out of an incident that happened in an office between the two of them which he was not at liberty to talk about. It was not just a question of giving illegal directives but there was something else that he did and there was a hearing that was taking place over the same as he had a right to defend himself and feedback would be given when the matter was settled. He suggested that the case be left to the presiding officer to decide. His suspension had already exceeded 60 days and he was expecting to return as that was agreed upon. The Department was looking for a suitable position for him that would not result in him interfering with the regulations personnel who are witnesses. On Mr Mashitisho, he said his situation was affected by a court case involving the DG for Home Affairs who instituted legal proceedings challenging his suspension. When the Public Service Act was amended, power was given to the President to deal with the conditions of service of heads of departments and the premiers were given the power to deal with the conditions of service of the provincial heads. Without delegation of that power by the President to Ministers, Ministers would be acting unlawfully if they exercised that power. The DG for Home Affairs took the Minister of Home Affairs to court and won his case. The President had not delegated his power to the Minister to suspend him. That is why the Minister of Water and Sanitation was advised against taking disciplinary action against the former DG and a settlement agreement was reached and that was how he was transferred to another department.

The Chairperson revealed that he had received correspondence from Advocate Singh requesting to come before the Committee as he had contested some of the charges that had been brought against him. Having consulted the legal department, it was decided that having another process in addition to the court case would be counterproductive. However, it was still appropriate for the Committee to receive the charge sheet in order to fully understand the situation without necessarily having to participate in the on-going judicial process. The Committee did not just want to see people being charged and then returning to their duties without understanding the issues and context. He also requested for all the charges involving the DDGs.

Mr Mkhize said he could make the charge sheets of all the DDGs available immediately after the meeting.

Mr Mukondo said Mr Mahlangu dealt with the issue in one part which was the settlement that was reached but he did not deal with the transgression that was committed by the former DG. Mr Mashitisho was still a government official and the settlement did not deal with the transgression. He asked whether the settlement included the transgression.

Mr Basson said it was crucial for the Committee to get access to the settlement because it could have financial implications for the Department. In addition, they needed to get access to the charge sheet because they did not know whether there was fraud involved. If there was fraud involved and then a decision was made to transfer him to another department then that would be a huge problem. For the Committee to get a bigger picture of the settlement it was important to know what the charges against him were. The charges would indicate exactly what the problems were and whether the settlement had dealt adequately with the problem.

Mr Mahlangu said when it was established that the Minister did not have the power to discipline the DG; it meant that all the charges emanating from the charge sheet would have been null and void if they were to go to court. The President did not authorise the charges. There was no money settlement in the agreement reached with the former DG. It was just a case of the withdrawal of the charges because of the technicality of the non-delegation of power to the Minister by the President.

Mr Basson responded that when it was discovered that there was a technicality, the charges should have been withdrawn and then a request should have been made to the President to draw up fresh charges and to take disciplinary action. It appeared as if the Department was hiding something and that the charges were not serious, and they just wanted to transfer the man to another department and in the process transferring the problem. He wanted to see the charge sheet and the settlement.

Mr Mukondo agreed with Mr Basson and said there was speculation that the former DG was being intimidated and there was no real case against him. Addressing Mr Mahlangu, he reminded him that he had been working for the government for a long time and he expected better from him. He challenged him that the process could be flawed, but that did not indicate that the substance of the case was irrelevant. It appeared that those who were claiming that Mr Mashitisho did nothing substantially wrong and that he was just being intimidated could be right. If there were real issues, then government has to pursue those issues as they could have financial implications for the Department.

The Chairperson said the Acting DG had indicated that the settlement terms and the charges were readily available. This matter would continue in the next meeting as an outstanding item which was unfortunate as the matter could have been resolved at this meeting. He said it would not help to continue discussing the issues in the absence of the settlement terms and the charge sheet.

Members agreed to defer the matter to the next meeting.

Mr Mnguni interjected saying his question on qualifications had not been answered.

Mr. Mkhize replied that it was when someone was awarded a certificate and not when someone had been admitted to do a course.

Mr Mnguni said registering for a course was not equivalent to completing a course. Information regarding courses being pursued by staff should not have been included on the qualifications as that did not count.

Ms D Manana (ANC) agreed with Mr Mnguni and advised that the Departments needed guidance on what sort of information should be included on qualifications. If a person only has a Matric that is what should be included and not incomplete courses.

Mr Basson said owhen advertisements are circulated they specify the required experience and qualifications. When the post of DG was advertised, it required someone with vast experience in the water sector. He said he asked the Minister where the DG that had been appointed got his experience and she replied that he was in management in local government and that did not meet the required criteria. It was crucial to know whether appointees were meeting the requirements because part of the reason why the Department was struggling was because the people that had been employed were not qualified. When you are a CFO it does not matter where you got experience because you will still be dealing with financial matters, but when you appoint someone to a technical position the person must have technical experience.

The Chairperson said the issue of qualifications would also be discussed at the next meeting.

Ms Manana agreed that the Department was having human resources management challenges and that they needed to be discussed at the next meeting.

Overberg Water Board

The Chairperson said there was a resolution at the last meeting that a legal opinion should be sought on Overberg Water Board and Advocate Jenkins had been invited to provide it

Advocate Frank Jenkins, Senior legal Adviser, Parliament, said he was going to look at what the Public Finance Management Act (PFMA) says and compare it to the practice. All the Members received the opinion beforehand. It says that when dealing with a government enterprise in schedule 3, where a Water Board appears, section 55 applied and it stated that the corporate plan and draft budget get submitted to the accounting officer from the accounting authority and then they are sent to the Provincial Treasury or National Treasury. In the case of a corporate plan or draft budget, there was no requirement for Parliament or a committee to approve it, but it may be necessary to look at the plan in the interest of oversight. The Money Bills Amendment Procedure Act showed that when you are doing your Budgetary Review and Recommendations Reports (BRRRs) you do the comparisons, and similarly when you are doing the budget approval. When it comes to the Annual Report of the Water Board, section 55 suggested that it was also submitted to Parliament, but through the Department. He said that he tried to get hold of someone at the Overberg Water Board to explain to him what the practice was because he found out that in 2009 they submitted separate Annual Reports to Parliament and there was a separate consideration in the Committee to look at that.

He was in contact with three people at Overberg Water Board and they were hesitant to answer his questions. His question was simple: do they submit their Annual Report to the Department or do they submit a separate one to Parliament? And if it was the latter had they submitted any report to Parliament recently? No one wanted to answer the questions. They gave him some e-mail addresses to follow up the issue and none of the addresses work. He had no choice but to focus on the PFMA which placed the obligation on the accounting officer of the national department which was DWS. When it comes to the approving of the budget, based on the Annual Report which sets out the programmes, the Water Boards are included among the programmes in the budget and that is how they get their funding. The crucial question was whether it was legal for them to continue operating when they had not presented any reports or corporate plans. There was nothing in the PFMA that prevents an entity from functioning, but they need a budget to function and even if Parliament has not approved their budgets they can function. If they have not presented the necessary reports, there are issues there and National Treasury played a role in terms of section 6 of the PFMA and they can stop the funding of an entity. The Minister and the DG would probably shed some light on how this works in practice.

Discussion

Mr Mnguni said he was worried that all the email addresses the legal advisor had been given were not working. He asked whether something could be done about the non-cooperation of the Water Board. He also asked how the Overberg budget was approved if there was no plan. He also wondered whether the accounting authority at Overberg was doing their statutory duties in line with the PFMA and he asked what National Treasury was doing about the situation. He bemoaned the fact that some entities were hiding behind the value of the service they were providing such as the provision of water meaning that they were unlikely to face sanctions that could result in their operations being suspended.

Mr Basson said the problem with Overberg starts with the Minister and he wondered why the Minister was not acting. All the Water Boards have to bring their financials to the Committee, but the Minister was not taking action. There was no point in the Minister just appointing Mr Buthelezi to the Water Board and then leaving him without support. He demanded that the Department come up with a plan of assisting the Water Board and present the plan within a week. Anything that could be done should be done even if it means seconding staff from the Department to the Water Board.

Ms M Khawula said there was a crisis at Overberg and the Minister needed to answer questions concerning the Water Board. The last time she checked there was also an issue of the suspension of some officials. The staff had a lot of complaints and they said they had not even been provided with money to allow them to come to Parliament and they paid for transport from their own pockets.

The Chairperson said that previously the departments were bringing the Water Boards and DDGs used to present reports on their behalf, but the Money Bills changed all that in 2015. Those that are appropriated by Parliament public funds have to be before a committee of Parliament. It is clear that there are inherent challenges in the Water Boards and out of nine, six are limping or dysfunctional. Water was a constitutional right and it was important that the Water Boards come before Parliament and not through the DDG responsible for regulation. Overberg was literally dysfunctional because the CEO and the board of the Water Board have not been communicating and that is why there have been no reports or budgets presented. The Water Board has been operating illegally.

Advocate Jenkins said he had no idea why the emails were not going through and there could be any number of reasons, but he was not sure. The structure that the PFMA envisaged is that the accounting authority of the Water Board must have a draft budget and a corporate plan and submit that to the accounting officer of the Department who would then also submit it to National Treasury who would then agree to it and that would become part of the budget of the Department. The role of the accounting authority of the Water Board is to make sure that every planning obligation is fulfilled, the corporate plan is done and that everything was costed. The executive authority would then table all the plans before Parliament. There are certainly lapses in governance, especially financial management and National Treasury must intervene according to section 6 of the PFMA and then either suspend the money, the operations or the staff. He agreed with Mr Mnguni that the Water Board cannot hide behind its constitutional mandate of providing water services. It is not just the provision of the service that mattered but also the manner of that provision and the financial management involved in the provision of the service. The services did not have to be suspended but staff not performing according to expectations can be suspended.

Mr Mkhize said they would provide a plan on Overberg. He also disclosed that the Department had intervened in Overberg when the board failed to submit its reports. The 2015/16 Annual Report was submitted and tabled in Parliament and the Department was working on the 2016/17 Annual Report which should be completed by April and the 2017/18 Annual Report would be done on time. The board was disbanded and the process of appointing a new board had commenced with the advertisement closing in February. The Minister will appoint a selection panel soon. Some financial experts had also been seconded to the Water Board to assist, because the financial systems had collapsed. It is hoped that within six months the Water Board will be fully functional with a board of directors. He said that Advocate Jenkins would be assisted regarding communication with the Water Board.

The Chairperson thanked Advocate Jenkins for his submission. He informed the meeting that they had also requested the CEO of Bloem Water to be present at the meeting but because of the late notification she could not be present as she could not get a morning flight. She indicated that the Department might wish to present something on her behalf. There had been some arrests in the past week in the Free State and she was among those that had been arrested. It was an urgent matter and that was why she had been invited. He invited Mr Mkhize to shed more light on the matter.

Mr Mkhize disclosed that her arrest related to her previous employment at Matjhabeng Municipality and had nothing to do with Bloem Water but he had no information regarding the substance of her case. He said arrangements could be made for her to come before the Committee the following week. It was agreed that she attend the Committee meeting scheduled for the following week.

Limpopo Oversight Visit

The Chairperson said the report of the Limpopo oversight visit had been tabled and adopted on 22 November 2017 and the Department would respond to the issues that had been highlighted in the report. The recommendations were as follows:

-That the Department facilitate the process of submitting all outstanding issues from the affected community

-Complete process of valuation report by September 2017 and present the recommendations to the Committee

-Department to provide a progress report on housing on a monthly basis

-Ensuring water access to the communities surrounding the Nandoni Dam

-Report into investigations about the disruption of water supply at ZZ2 farm to farmers downstream

The Mopani Municipality through COGTA to facilitate reticulation from the Giyani main supply line to supply affected communities

-Department to provide feedback within 60 days

Mr Mkhize said the first recommendation was done on 5 September 2017. The second recommendation was also done. On the issue of housing, 51 houses had been done with 47 local labourers doing the repair work, although the construction works had been delayed by the rains and some of the sub-contractors did not report for duty after receiving payments. Four sub-contractors left the site for various reasons, but other local contractors had been engaged. The Department was also despatching its internal unit to double the intervention.

Report on ZZ2 Farming Mooketsi

The Acting Provincial Head of Mpumalanga Mr M Mulaudzi reported on the ZZ2 Farm Mooketsi. The investigation was triggered by the extended period of drying up of the Middle Letaba, Koedoes and Brand Boontjies rivers which resulted in complaints by most water users affected. It was assumed that it may be linked to the water uses of storage both on the main streams and tributaries. ZZ2 Farming Mooketsi is situated in Mooketsi in Limpopo Province and operates as Bertie Van Zyl (Pty) Ltd.

An in-stream dam on the Middle Letaba River observed and used by the ZZ2 Farming Mooketsi was the Lorna Dawn dam. ZZ2 has an entitlement to take water from the Lorna Dawn dam and has a supply capacity of 4 900 000 m3. The dam was built by DAFF. It is located on Kogelfontein 183 which was a farm owned by Pheeha Community Association. There was an agreement between ZZ2 and the Association which allowed the maintenance and control of the dam to be done by ZZ2 as part of their water use. ZZ2 has seven in-stream dams on the Koedoes River and has one dam on the Brand Boontjies River.

ZZ2 also has access to ground water. The water uses of ZZ2 are lawful as they are the continuation of the Existing Lawful Use (ELU) under the National Water Act. The catchment area of the Middle Letaba dam was made up of the Middle Letaba River and its tributaries the Koedoes and Brandn Boontjies rivers. ZZ2 was not the only farm with in-stream dams which do not release water downstream into the water course during the rainy season. The catchment area has been overused with a lot of storage dams on both the main rivers and their tributaries. ZZ2 was abstracting a lot of water from the groundwater resource and the quantity extracted was not measured.

The recommendations made were:

-All water users in the catchment area should install water measuring devices which will assist determine lawful use

-List of users to be compiled and letters sent before 28 February 2018.

-A short-term measure of restricting water use should be implemented

-There should be water reallocation in the dry catchment area

-There should be compulsory licensing

Discussion

The Chairperson said the main issue arising from the presentation was that ZZ2 had blocked water which deprived communities downstream and the question was whether any move could be made to address the situation. He asked whether the people were receiving water.

Mr Mulaudzi replied that they were not yet receiving the water, but that the Department was in the process of writing letters to all the owners of dams that were storing water so that they could release that water to communities downstream.

Mr Mnguni got exasperated and asked how long it took to write a letter. He said it could not possibly take six months to just write a letter.

Ms Manana said the problem was not just caused by ZZ2 but that people living near the dams were not accessing water but communities that were far off were receiving water. There was something wrong with the connections.

Mr Mukondo asked what had the Department done after six months and what legislation couldbe used to arrest the situation.

Mr Mulaudzi said some investigations had been done by the Blue Scorpions to try to establish the quantities of water that were being extracted.

The Chairperson asked whether what ZZ2 was doing was legal or illegal.

Mr Mulaudzi said it was illegal. The Department was facing some challenges in carrying out some reforms through water re-allocation and affecting the use of licenses for all users in the region.

Mr Mnguni lamented that nothing tangible was being done by the Department because ZZ2 had continued diverting water that deprived the communities living downstream. He said he could not understand why it would take six months just for the Department to write a letter giving a directive to ZZ2.

The Chairperson agreed with Mr Mnguni that taking 6 months to write a letter was unacceptable and that the stories being told by the Provincial Head just showed that they were not taking their work seriously. He emphasised that what the Department was doing was wrong. He gave the Department one month in which to correct the situation and report back to the Committee on 20 March 2018.

 The Committee agreed.

Ms Bilankulu repeated the question of the legality of what ZZ2 was doing.

Mr Mkhize disagreed and said what ZZ2 was doing was authorised by the Water Act of 1956 and they were engaging in lawful activities. The activities would continue to be legal until the Act was amended. He added that what could be illegal were the quantities of water being extracted but that had not yet been verified.

Mr Basson asked why the amendment could not be done immediately. He urged the Department to bring the draft legislation so that the process of amending the legislation could begin.

The meeting was adjourned.

 

 

Share this page: