The Standing Committee on Public Accounts (SCOPA) had a hearing on the Department of Water and Sanitation progress in investigations on irregular expenditure in the Department and Water Boards.
The Department reported that no unauthorised expenditure had occurred in 2019/20; however, it was still addressing cases of irregular expenditure incurred in previous years. The Department has undertaken disciplinary actions under its consequence management strategy. This has resulted in the opening of several criminal cases with the South African Police Service (SAPS) and the dismissal of officials who have been implicated in wrongdoing. The Committee was not satisfied with the rate at which the Department was making progress. The Department had to provide a full report detailing the names of implicated officials and the offences committed. It was important to prevent implicated officials moving from one department to another or public entity.
The Committee highlighted its disappointment at the state of the War on Leaks programme. Although the project was necessary, it said its structure and implementation were poorly conceived. The Department reported that it had had a joint meeting with the Department of Cooperative Governance and Traditional Affairs (COGTA) to discuss the status of the programme and was engaging with municipalities to encourage the uptake of water leaks water leaks technicians who had been trained under the programme.
The Department reported that the area of highest risk for irregular expenditure was at the level of implementing agencies. Amatola Water Board and Sedibeng Water Board were flagged due to their high incidence of irregular expenditure. The Committee intends to schedule separate hearings with the various Water Boards to gain a better understanding of their specific circumstances and financial management. In addition, SCOPA intends to request the Auditor-General to perform a special audit on the Water Boards as it appears that their financial affairs are not being run in alignment with proper accounting practices.
SCOPA requested the Department provide information on the terms of reference in the appointment of Adv Terry Motau as the lead on investigations in the water sector as well as a report detailing the cost implications of this appointment. The Minister was asked to justify the appointment of former Minister Ms Susan Shabangu as a member on the newly established Advisory Committee on the Stabilisation and Efficient Functioning of the Water Sector.
Due to time constraints, the Committee was unable to engage fully with the Department. All outstanding questions were to be forwarded to the Department for response in writing by the following week.
The Chairperson welcomed the Minister of Human Settlements, Water and Sanitation, Ms Lindiwe Sisulu, and her colleagues.
Department of Water and Sanitation (DWS) briefing on Investigations
Mr Mbulelo Tshangana, DWS Acting Director-General, gave a presentation on the status of the Department and the progress it has made in implementing a Financial Recovery Plan. The financial health of the Department has been challenged by several internal and external challenges including: high incidence of irregular, fruitless and wasteful expenditure, fraud and corruption and overall poor financial performance.
Highlights of the presentation included:
• No unauthorised expenditure has occurred in the 2019/20 financial year
• DWS has requested the condonation of irregular expenditure totalling R9.049 billion
• 33% of irregularities in the Main Account resultant from implementing agencies, specifically water boards
• Sundry payments account for 61% of irregularities in the Water Trading account
• R641 109 000 was incurred in unauthorised expenditure in FY2018/19; resultant from overspending in the Bucket Eradication Programme and War on Leaks Programme
• Material irregularities were incurred in three areas: non-payment of Amatola Water Board within 30 days, non-payment of Bigen Africa within 30 days resulting in additional interest, payment made to a consulting firm without evidence of work performed
• Investigations have resulted in 20 criminal cases being opened with the SAPS
• DWS has appointed additional capacity to address outstanding forensic audit cases; including Adv Terry Motau who will lead the investigations within the Water Sector
• An Advisory Committee on the Stabilisation and Efficient Functioning of the Water Sector has been established.
Between the 2012/13 and 2019/20 DWS has taken disciplinary action against officials who were implicated in forensic investigation reports as per recommendations made in these reports. A total of 138 cases have been undertaken, 97 officials were found guilty, 16 were found not guilty, 24 officials resigned, and 1 official was reinstated. Various sanctions such as dismissals, demotion, suspension without pay and written warnings have been instituted. Mr Tshangana stressed that officials who have resigned are still liable for criminal charges by SAPS.
Proactive fraud prevention
DWS has made an effort towards developing preventative measures. Its Directorate of Forensic Audit & Quality Assurance held 20 fraud awareness sessions with 865 officials in attendance. Approximately R3 billion was investigated in the 2019/20 financial year. Preventative audits by the DWS Internal Audit Unit were performed.
DWS currently has a total of 30 disciplinary cases, of which 19 are at Senior Management level. These cases are related to several projects/cases: Giyani Water Services Project; Thukela Goedertrouw Scheme; Richards Bay desalination plant; unlimited SAP licences; security guard services and financial advisory services. Several charges have been made in these cases and are awaiting hearing once lockdown restrictions permit. Mr Tshangana emphasised that National Treasury only permits the condonation of irregular expenditure if proper consequence management had been carried out.
The Minister has been focusing specifically on remedying challenges in the water boards. Investigations by DWS, Outsourced Risk and Compliance Assessment (ORCA) and the Special Investigating Unit (SIU) are currently in progress. Entities being investigated are: Amatola Water, Lepelle Northern Water (LNW) Umgeni Water, Magalies Water, Sedibeng Water, Bloem Water and Mhlathuze Water. DWS receives regular progress reports on the status of investigations carried out by external partners.
Mr Tshangana reported that many municipalities will be impacted by the mismanagement of water boards. Sedibeng Water was particularly struggling financially and it had not received payment from municipalities in three months. The entity is reportedly owed over R3 billion by Matjhabeng Local Municipality.
The Chairperson acknowledged that colleagues from other Committees were present at the meeting.
Ms B Van Minnen (DA) asked DWS to elaborate on the completed investigations on incurred fruitless and wasteful expenditure. She said simply providing numbers was not very helpful and further details were required. She asked what consequence management has been put in place to address the payment of R17 million made to a consulting firm without evidence of work performed. In future, how will validation of services rendered be done to ensure this does not happen again? The information provided by DWS on disciplinary actions performed between 2012 and 2020 did not provide any substantive information on what officials were guilty of and if the activity was criminal. She asked if there had been any progress in the oversight of the Lesotho Water Project given the inherent challenges of managing cross-border issues.
She expressed concern over the appointment of Open Water Advanced Risk Solutions in the investigation of Amatola Water given that the director has ties with the company at the centre of allegations. Is there not a conflict of interest?
Mr M Dirks (ANC) agreed that the report does not give the solid details required by SCOPA. However, he acknowledged that it identifies culprits and the areas where irregular expenditure is taking place; mostly at the level of implementing agents. The Committee cannot interrogate DWS on maladministration occurring within the water boards. The entities themselves must come to the Committee. SCOPA needs the names of all service providers implicated in any wrongdoing and those currently involved in open cases. The omission of the names of service providers from the presentation was not helpful and a list should be provided. In addition, he asked DWS to elaborate on what actions were being taken and if none, why. The Committee was concerned and needed explanations about irregularities even where DWS determined that there was value for money in the contract.
Ms N Mente-Nqweniso (EFF) noted that the outcomes of several water boards which were listed by the SIU to the Committee at the close of the Fifth Parliament were not included in the presentation. She referenced Chris Hani Water and another water board in KwaZulu-Natal which had been double paid. She raised concern at the condoning of funds following the dismissal of officials allegedly implicated in wrongdoing. There is no comfort when people are fired without clarity on what their offence was. Many transgressions and dismissals are occurring within the water boards and there is potential that lower level administrators who are not responsible for the issuing of tenders and double payments are being fired. There was a tendency across the public administration for certain individuals to be held accountable while others guilty of the same offence were not. She asked DWS to give information on what dismissals had been made and for what reasons. She asked about the appointment of Adv Terry Motau whose name had previously been brought to their attention about some challenges faced within DWS. As far as investigations go, what will he do differently from the SIU and at what cost? Seeking additional legal counsel comes at a cost whereas the SIU is fully capable of completing the task and the DWS financial position is already compromised. She asked DWS to detail what successes Adv Motau had achieved to justify his return to lead investigations. It was a pity that the SIU was not present to report on its findings. It would have been helpful to compare these findings with those concluded by DWS. She had noticed some inconsistencies between an SIU report previously submitted and some of the conclusions made by DWS.
The Chairperson acknowledged the Committee’s concerns and assured Members that they would get the opportunity to engage with the SIU. This meeting was specifically to gauge efforts made by DWS.
Mr B Hadebe (ANC) agreed with previous Members that the report does not disclose crucial information. Of the 11 senior managers and 86 officials found guilty, who was responsible for the irregularities totalling R1.5 billion which represent 33% of all the irregularity. It was important to provide a specific breakdown of offences and to attach culprits to specific misdemeanours to see if imposed sanctions were appropriate for the crime committed.
He asked DWS to provide more information on the R9 billion to be condoned. What sanctions had been imposed as consequence management? At what stage did these nine officials resign, was this before or after the issuing of a guilty verdict? What steps have been taken following resignations, has civil litigation been pursued? It is important to have this information and to know if these individuals are still public servants as there is a tendency for such officials to resign from one department and move to another. This is crucial to prevent if appropriate consequence management is expected.
Ms B Swarts (ANC) asked who the people are involved in the irregular expenditure cases. How many cases were opened? And how will DWS ensure that this does not occur again? How much money linked to these cases has been recovered? She noted that the root cause analysis depicted low percentages for incidence of irregularities in certain risk areas but these accounted for huge proportions in monetary terms. She asked DWS to explain what types of measures are in place.
How does DWS make payments without confirmation of the services or goods rendered? How does DWS spend money it does not have? Annual planning is meant to be done to avoid overspending or underspending. She raised concern that the Acting Director-General did not provide details on the condonation of R9 billion. She asked DWS to provide a specific report on this matter to improve the Committee’s understanding on the condonation. She criticised the Acting Director-General’s decision not to provide details on the SIU investigations proclamations – these are relevant as they hold financial implications. If they were not important, why were they included in the presentation?
Mr S Somyo (ANC) acknowledged the efforts made by DWS. The report was an indication that progress was being made towards the finalisation of legacy issues which have plagued DWS. However, there is a need for more substantive information, particularly investigations that have been concluded in court. DWS might continue to incur costs in areas of enhanced industrialisation and localisation. DWS is likely to face significant financial challenges due to high exchange rates if it depends on internationally sourced products. This creates further unintended costs and is one of the areas that need attention. He asked the Acting Director-General to expand on the irregularities in security guard services. How many officials were involved in the Giyani case?
Ms R Mohlala (EFF) asked about the War on Leaks programme. Between 2015 and 2019, over R 3 billion was spent on training but there is little to show on how the funds were used. The Energy & Water Sector Education Training Authority (EWSETA) reportedly spent over R2 billion in training and venue costs. How did it assure value for the qualifications provided? Has EWSETA provided information to DWS on the investigation under consideration? DWS, EWSETA and implementing agents were complicit in ensuring money was spent but students did not emerge with formalised qualifications. How does DWS explain this when the purpose of the developmental state caters to the creation of jobs and opportunities for poverty eradication and equity? Over 20% of the DWS budget was diverted for the War on Leaks programme which severely disrupted many critical regulatory issues. She asked who benefitted from the highly priced Drop a Block project. How were the beneficiaries selected? She asked if the case between DWS, Bloem Water and Babereki Consulting Engineers CC had been concluded. Despite the millions spent on the Bucket Eradication project, many households were still using a bucket system. DWS was still incurring irregular expenditure from unjustified deviations made by service providers in the procurement of contracted services. Does DWS not provide guidelines to its entities on the due process to be followed in deviations? What oversight does the DWS Internal Audit undertake over these entities?
She asked DWS to provide more information on the R7 billion incurred in irregular expenditure in 2018/19. She asked about the DWS decision to enter a five year contract worth R950 million to purchase an IT system for an organisation that did not need or consent to the purchase. The SIU had informed Parliament that it would enter civil litigation on this in 2019. Does DWS have a copy of the report completed by the SIU?
Ms E Powell (DA) referred to the establishment of an Advisory Committee on the Stabilisation and Efficient Functioning of the Water Sector. In her understanding, members of these advisory committee are appointed in terms of the Water Services Act meaning that they are appointed on the sole discretion of the Minister. She agreed that SCOPA should have the names of all officials who have undergone investigation for maladministration and corruption and later have been redeployed to other government entities and departments. The same should be applied to individuals appointed to serve on Advisory Committees. The Minister had confirmed her appointment of former social development minister, Ms Susan Shabangu, as an adviser on the committee. How is the Minister justifying this appointment given the specific qualifications and skills required for this position? Who else has been appointed to sit on this Advisory Committee and do they have the right qualifications?
Ms Powell asked the Acting DG to provide a list of all of the entities in DWS and the Department of Human Settlements (DHS) which currently have interim boards and acting chief executives. It was not possible to fix the historical issues within the Department without employing secure boards who have the authority and expertise to act on challenges. She asked the Minister to provide clarity on two media statements recently made. On 2 May 2020, the Minister had advised the public that she had ended the term of the interim board of Amatola Water Board. The board released a statement noting and accepting the Minister’s decision. On 25 May 2020, the Minister released a new media statement saying that the interim board of Amatola was still in place. What happened with these media statements and what is the status of the board? She asked if the CEO of the Lepelle Northern Water Board, Mr Phineas Legodi, had indeed been placed under precautionary suspension as per the Minister’s statement.
Ms M Lubengo (ANC) asked DWS to explain what internal controls are in place to ensure that such irregularities do not occur.
The Chairperson stressed that DWS needed to disclose the name of the service provider it is currently in court discussions with. He asked for an executive summary detailing the terms of reference of the appointment of Adv Terry Motau as well as the cost implications. He stressed that the DWS had not covered itself financially and that the purpose of this meeting was for SCOPA to be fully informed on what DWS was doing and to make determinations on whether or not to proceed with investigating areas of shortcoming. This is why the Committee has been critical of the scantiness of the DWS presentation. It was important for the Committee to interact with the SIU to see how far progress was in addressing cases. The Committee was unhappy with the slow pace of investigations and the prosecutions. Law enforcement agencies need to demonstrate to the Committee that they are doing what is necessary to reach conclusions. He asked the Acting DG to prepare a breakdown of where those who have been dismissed following misdemeanours are. This is because of the tendency of perpetrators to continue with the same behaviour when deployed to other departments.
The Chairperson clarified that the Minister was currently attending two meetings, one with SCOPA and one with Cabinet. The meeting with SCOPA was scheduled to begin at an earlier time during which the Minister was available however limited space on the parliamentary platform led to SCOPA’s meeting being pushed forward, creating the conflict with Cabinet.
Response from Minister of Human Settlements, Water and Sanitation
Minister Lindiwe Sisulu began by stating that the current administration had been in DWS for only eight months since the two departments were joined. As repeatedly mentioned by SCOPA, the Department of Human Settlements had inherited the Department of Water and Sanitation plagued with many challenges. For this reason, they have had to assess where root challenges lie prior to planning a way forward. She had listened in when Auditor-General had met with the Committee and noted that the biggest concern raised was the lack of consequence management. This is primarily why DWS had decided to demonstrate that it was capable of invoking the necessary actions in the shortest possible time. She acknowledged the Committee’s dissatisfaction with the rate at which progress was being made. However, she said that she was proud of what DWS had achieved so far.
Appointment of former Minister Ms Susan Shabangu
She responded to Ms Powell and said former minister, Ms Susan Shabangu, has more experience and understanding of politics and government than she could ever have. Ms Shabangu has been part of government since 1994. She became a Minister in 1998 and prior to that she was secretary-general of national trade union movement. She has served government in various capacities and has the necessary skills and experience to sit on the Advisory Committee. The fact that Ms Shabangu is not sitting in Parliament is comparative to asking why Ms Helen Suzman is currently not in Parliament, therefore the question surrounding her experience and appointment does not hold. Ms Shabangu has the necessary skills, especially in labour law which is why she was appointed.
Appointment of two audit firms
DWS had enlisted two different firms to perform audits for various reasons. The Minister said ORCA was a reliable auditing firm that had worked for DWS and Lepelle Northern Water for a number of months. There was nothing stopping her from choosing who to contract to perform audits or do a forensic investigation. Open Water Advanced Risk Solutions was chosen because it is on the database of Treasury and has served multiple provincial entities where it has proven its reliability as a forensic investigator. DWS has chosen to delegate the separate tasks to two different firms, and they entail two different responsibilities.
Appointment of Adv Terry Motau
She was surprised that the Committee had any concerns over the appointment of Adv Motau as he had a trailblazing record. DWS would provide details on why he was appointed, these will be shared on the website and with the Committee. DWS expects that Adv Motau will have outstanding results as he has demonstrated in the past. Adv Motau completed an investigation into the DWS in 2016 and provided the report. The new administration was not aware of the extent he had reached as by that time, there had been a different administration between that of 2016 and the current one. Based on the report Adv Motau completed in the past, he is the best person for the job because he is well acquainted with the challenges faced by DWS.
Acting DG, Mr Tshangana, added that there was value in the appointment of Adv Motau. He looked specifically at supply chain management processes, where most irregular expenditure has occurred. The DWS will share a report on the associated costs of the appointment as this is no secret.
Appointment of Open Water
The Minister said that Open Water was appointed according to Section 45.2 of the Water Service Act which says that the Minister may appoint a person to investigate the affairs of a water board. The DG is dealing with the administrative task of ensuring this appointment.
War on Leaks Programme
The Minister agreed that the Water Leaks programme had many faults, she reminded the Committee that this was another programme which her administration had inherited. DWS had a joint meeting with the Department of Cooperative Governance and Traditional Affairs (COGTA) to discuss the status of the programme. DWS had performed its mandate of training students and it was now the role of municipalities to provide jobs where students would assist with leaks. There was little uptake by municipalities and DWS had notified municipalities that students would be deployed by DWS free of charge for three months on a trial basis. No municipalities have taken up the offer. The matter would be raised again in the next meeting. The provision of water is the job of DWS, reticulation is the responsibility of municipalities and this is where the highest rate of wastage occurs. DWS is looking into diversifying the work of the water leaks students to guard and maintain water tanks that have been put up across the country. Once finalised, this idea will be put to Cabinet for approval.
She acknowledged the Committee’s agitation and emphasized the gravity of the challenges facing DWS. DWS has worked hard to clean its image, however, this can only be done as a piecemeal process. DWS cannot complete all investigations at once but it is committed to finalising the conclusion of outstanding cases. She had hoped that the Committee would commend DWS for the progress it had made. Its report was a demonstration that DWS has zero tolerance for corruption. DWS wants to assure the country that it cares for the money entrusted to it and is committed to clean governance.
Statements on Amatola Board
The Minister confirmed that indeed the statement issued on 2 May had stated that the board would be terminated. The board then corrected DWS and said they had requested to step aside while DWS concluded its affairs. The subsequent statement made on 25 May was a correction following the board’s direction as the first media address was misleading.
Lepelle Northern Water Board
The Minister said the disciplinary cases of Mr Legodi have taken long, however they have been expedited.
The Minister indicated that a member from the DA might have a better vantage point of DWS than herself. DWS was still working on an essential project in KwaZulu-Natal, but it does not always have resources and skills for the projects it wants to implement. A lot of the South African public did not have water. This was because DWS had inherited an apartheid structure where those people were historically not provided with water. DWS is working on remedying this. The provision of water tanks is a temporary solution that indicates just how far behind DWS is. Approximately 19 000 tanks have been deployed which shows that 19 000 communities have not had water. This is criminal and is the structure DWS has inherited. DWS hopes the trained water leaks students will be able to take care of the tanks as they serve a crucial purpose. The tanks are tagged and monitored by the command centre which tracks the location of every tank. The CEO of Rand Water gets regular feedback from municipalities. Although the sustainability of the water tanks project might be a challenge, it is a good interim strategy while DWS works on a long-term solution in expanding its water provision.
The Chairperson said there was a need for a meeting specifically on the War on Leaks as this was a perrenial headache with the absence of a business plan. Previous engagements with Ministers had not provided much information on the direction of the project yet the state continues to spend large sums of money for this purpose. The corruption in this space is shocking. The Committee is concerned about the suggestion of utilising the trained water leaks students for the purpose of maintaining tanks and will engage in discussions on this matter. She assured the Committee that any outstanding or follow up questions directed at the Minister should be submitted in writing for response within an agreed timeframe.
The Acting Director-General continued answering questions. He clarified that his intention was to indicate that certain details on the condonation of funds had been covered in other slides and that he simply did not want to repeat, which is why he did not want to bore the Committee. He assured members that he would provide further details in writing
DWS has completed a forensic investigation on the officials associated with the irregular expenditure totalling R17 million. The implicated Chief Director has left DWS and is now serving in a different department. The case has been handed over to the entity she is under in Gauteng for further processing. The Acting Chief Financial Officer at the time has left DWS and is not working for government. A criminal case has been opened with the service provider and implicated officials. SAPS has taken on the matter and the DWS will provide a case number. The Director who was implicated in the case has resigned, however, criminal charges still stand.
DWS responded that Bloem Water had indeed been taken to court by Babereki Consulting Engineers CC. The reason for this was the Select Committee had written to DWS and given the recommendation to stop using implementing agencies like Bloem Water and to instead appoint service providers under Schedule 6B Grants. At the time Bloem Water had a contract with Babereki which led to a contractual dispute between the two entities.
Interim Boards and Acting Executives
Amatola Water Board has an acting CEO and interim board. The tenure of the Lepelle board came to an end on 31 March 2020 but the Minister took the decision to extend the term of the board by a month to maintain stability while under lockdown restrictions. The Water Service Act is silent on this issue however the maintenance of the board under the circumstances is not illegal according to case law and based on legal counsel. The board has been asked to prepare a handover report; DWS has started the process of advertising positions. Sedibeng Water has a full board in place and an acting CEO. It is one of the main institutions which continue to face particular challenges. Magalies Water, Umgeni Water, Overberg Water, Mhlatuze Water, Rand Water and Bloem Water have a board and CEO.
War on Leaks
The Acting DG responded that in hindsight, one could argue that the War on Leaks project was necessary to address a real challenge, however, it was ill conceived. The structure of the programme had shortcomings. DWS could have prioritised utilising the R3 billion towards fixing the leaks and then focus on training students. The cost structure of the programme was too high and relied on the use of multiple implementing agencies. An analysis of the programme indicated that DWS had spent approximately R300 000 per student which is exorbitantly high. There is a lot of irregularity associated with the programme which was first assigned to the Water Trading Account which should not have been used for operational issues such as that programme. DWS has engaged with National Treasury about this.
Condonation of R9 billion
Most of the irregular expenditure of R9 billion is linked to implementing agencies, for example, the Giyani Water Services Project being implemented by Lepelle Northern Water. A senior official, a Deputy Director-General in DWS, is undergoing investigation relating to the project. Goedetrouw is another example where implementing agencies and senior officials are linked to misconduct. The projects being investigated by the SIU involve senior managers within DWS. The Department has already started on disciplinary actions but SIU wants to look further at issues, especially Giyani, to establish if there was value for money.
Reconciliation of offenders
DWS was actively reconciling offenders with specific misdemeanours under its consequence management strategy. Although the number of Senior Management Service (SMS) officials appears to be low, some officials such as the DDG under investigation handle monetary projects up to R4 billion. Even when offences are small in monetary terms, it is crucial for DWS to follow up as this creates a cancer with the organisation at various levels.
The Acting DG said that this project was still under investigation by SIU and they would be in a better position to elaborate further. A report will be handed over to the President. SIU has done a lot of work in the Giyani project investigation. The only outstanding task is the completion of the engineering audit. The completion of the SIU investigation and report is important as it will determine if the DWS needs to pursue a court case or tribunal.
Lesotho Highlands Project
The project is currently in Phase Two and DWS has been proactive and adopted a preventative audit which revealed a few irregularities with the scoring of service providers. The Acting DG has asked for the DWS internal audit to pay attention to the work being done in the project. A meeting was held with National Treasury which has submitted its findings. The Auditor-General will provide an opinion on the project. This response is part of the proactive and preventative stance DWS has adopted.
Recurrence of irregular expenditure
A financial turnaround plan on how the recurrence of irregular expenditure will be prevented will be presented together with the DWS Annual Report when it returns to the Committee. The most important measure lies in strengthening the capacity of the internal control unit to ensure that issues are quickly identified. This has been repeatedly emphasised by the AG who has also encouraged DWS to provide awareness sessions to promote proactiveness. DWS also has to focus on implementing consequence management, especially amongst senior managers. Global experience indicates that this is most effective when implemented at the top as it sets a precedent for transgressors at lower levels. This is why DWS has made an effort to expedite imposing sanctions on all implicated SMS officials.
Disclosure of service provider
The Acting Director-General responded that the implicated service provider is Fumile Advisory Services. The service provider had already been mentioned in the DWS Annual Report. DWS is confident that it has a strong case and will be able to get its funds back.
Distribution of Water Tanks
DWS has distributed numerous water tanks to vulnerable communities in response to the COVID-19 pandemic. This was done in consultation with COGTA, Municipal Infrastructure Support Agent (MISA) and affected municipalities. DWS is now working on the refurbishment of existing boreholes and establishment of new ones where appropriate as possible long term solutions. This is being discussed with National Treasury.
Open Water conflict of interest
The contractual arrangement is between Amatola Water and the service provider. The Acting DG has asked Amatola Water to provide DWS with all the information on this matter. DWS will respond to the Committee in writing as it did not have any further details.
The project had reached phase three of completion. According to the fiscal conditions of the grant managed by DWS, the municipality will have to contribute to the economic development component which adds up to approximately R1 billion. Another condition states that as far as the technical component goes, moving volumes of water beyond the Matiwaneskop spot requires a feasibility study. This is currently underway by the implementing agency, Umgeni Water, to ensure that phase three of the project is possible given the fiscal and technical considerations.
Resignation of officials
The CFO resigned during the disciplinary process. The Chief Director resigned during the disciplinary process and left for another department. The Director resigned during the disciplinary process. Another director left before the disciplinary process started.
The Chairperson asked DWS to provide a written list with the names of all implicated officials.
Duplication with SIU
DWS does not see any duplications in the investigations undertaken internally and by the SIU as the SIU operates on a broader mandate. The investigations actually complement each other, and the two organisations meet with each other to compare findings. However, there is some information that the SIU cannot share with DWS based on confidentiality; this is shared with the Director General in the Presidency.
The Chairperson indicated that the Committee was unfortunately faced with time constraints and would not be able to engage sufficiently with DWS. Therefore, an interactive roadmap with DWS would have to be developed. He noted the Committee’s request for outstanding questions to be provided in writing. These would be submitted to the Secretariat for submission to DWS which should respond within a week’s time. He suggested a three pronged approach: scheduling of a hearing for the basis of the DWS annual report and financial statements; an engagement with the SIU and law enforcement agencies on their progress in concluding cases; and a request for the Auditor-General to conduct a special audit since it was evident that the Water Boards’ financial affairs were not in alignment with proper accounting practices.
The Chairperson said the biggest headache was within the water boards – there is a need to look at the current circumstances of the entities, particularly Amatola and Sedibeng. SCOPA needs engage with the Public Service Commission to resolve the challenge of the shuffling around of officials amongst the government departments despite their implication in misconduct and disciplinary hearings. The Committee was not in disagreement about the necessity of the War on Leaks project, however, its execution was terrible and underpinned in corruption and the looting of the state. The Committee cannot accept how poorly the project was implemented based on its intended impact. It was unacceptable for the students who were trained to be technicians to now be expected to act as security guards for water tanks. The fact that some water tanks remain waterless is in itself an indication of poor planning and the Committee cannot be expected to accept the suggestion to redirect the work of water leaks technicians.
He stated that the responses from SAA and the Department of Public Enterprise were due on 26 May 2020 but had not been received. The Committee would follow up on these. He thanked DWS for engaging with the Committee.
The meeting was declared adjourned.
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