In this virtual meeting, the Committee met with the Office of the Auditor-General (AGSA) and the Department of Planning, Monitoring and Evaluation on the Department of Water and Sanitation’s 2019/20 audit findings, performance and outcomes.
The AGSA reported that the Department’s audit outcome was unchanged as material findings relating to non-compliance to key legislation remained. The Trans-Caledon Tunnel Authority (TCTA) audit outcome improved to an unqualified financial audit opinion. The Water Trading Entity (WTE) audit outcome improved to an unqualified financial audit opinion. The Water Research Commission (WRC) audit outcome remained unchanged as unqualified with no findings due to non-compliance with legislation.
The AGSA recommended:
-The vacant position of the accounting officer should be prioritised to ensure effective and continuous leadership within DWS and WTE.
-Consequence management should remain on the radar of management and implemented as and when transgressions and/or poor performance is identified and addressed effectively and timeously.
-Oversight by the Department, Minister and Parliamentary Committees responsible for these entities should include strong in year monitoring and ensuring that governance policies and practices in place, are properly monitored.
Committee Members were concerned about the status of the Water Boards. They noted that there was an alarmingly high number of municipalities not paying the Water Boards and asked the AGSA how to resolve the problem of non-payment by municipalities. The Committee asked what were some of the reasons provided to the AGSA on the Department’s inability to obtain sufficient appropriate audit evidence on irregular expenditure. What was the impact of incomplete records on the ongoing investigations into irregular expenditure? Did an unqualified opinion mean that the Department did not find any material misstatement in the Department’s financial statement? What was the plan to bring the expenditure that was unaccounted for and the accruals that were growing everyday down?
The Department of Planning, Monitoring and Evaluation reported that overall, water and sanitation projects had shown satisfactory progress during 2019/2020 period. The Department was to resolve all issues affecting the rollout and completion of the remaining Bucket Eradication Projects as a matter of urgency. A Multi-disciplinary revenue task team had been established to address non-payment of bulk water by municipalities coupled with a political solution to municipalities not paying their debt. Consideration was being given to an institutional realignment through rationalisation of Water Boards into Regional Utilities as options to unlock expansion of services.
The DPME said that the DWS was one of the key Departments with regards to the delivery of services. As the District Development Model would be implemented in the coming financial year, this was one of the areas that needed to be prioritised. The DPME had issued guidelines for geo-referencing so that all projects for Departments were geo-referenced. That would make it easy for anyone who did monitoring to know where the projects were located and the Department would follow up on that. That would also benefit Parliament to have a sense of where the projects of the Department of Water and Sanitation were located.
The Committee said that it was concerning that in the DPME presentation there was an absence of analysis on the impact of future water insecurity issues on the availably of food sources in South Africa. Members asked if South Africa had innovative approaches, strategies and technologies to address future needs of South Africans to ensure water security and future food security. The Committee asked what plans the DPME had to ensure that the planned targets were achieved. Was the DPME currently engaging on the revision of targets as highlighted in the NDP and in the medium-term strategic framework? The Committee wanted more information on the 7000 learners who had completed courses and could not be accommodated in their municipalities. The Committee noted with concern that Government had spent a lot of money on training these learners.
The Committee expressed concern about the 30 advisors appointed by the Minister. Members indicated that the figure was too high and they asked for progress reports on the work that the 30 advisors had completed for the financial year under review.
The Committee noted that this engagement would assist the Committee when it interacts with the Department on its 2019/20 annual report.
The Chairperson welcomed Members.
She asked for the Committee to observe a moments silence for all those who lost their lives to Covid-19. The agenda was presented and the Chairperson requested that the agenda be adopted.
Ms N Sihlwayi (ANC) moved for the adoption of the agenda.
Ms N Mvana (ANC) seconded the adoption of the agenda.
The agenda was adopted.
Office of the Auditor-General (AGSA) Remarks
Mr Eugene de Haan, Auditor-General of South Africa: Deputy Business Executive Manager, AGSA, introduced the delegation from the AGSA.
He responded to the question the Chairperson raised on why there was the late finalisation of the annual report. In the portfolio there was the Department of Water and Sanitation, the Water Trading Entity (WTE), the Trans-Caledon Tunnel Authority (TCTA) and then the Water Boards which followed a different cycle. In today’s presentation the AGSA would provide feedback on the Water and Sanitation portfolio audit outcomes and feedback on the situation of the Water Boards. Six of the nine Water Boards’ audit outcomes had been finalised. Three were still outstanding. Reasons would be provided as to why those three were still outstanding. One of the biggest challenges faced by the AGSA over the last year, in finalising the audits, was the impact of Covid. There was a delay in receiving information. That was because some key officials contracted the virus. The Department had also closed last year for few weeks because of the virus. That had an impact on the AGSA to receive information. It was identified that for the WTE there was a turnaround time of about 18 days when a request was made for it to submit information. That was double the amount of time taken compared to the previous year, before the pandemic. The WTE was also coping with the AGSA’s new legislation and extended powers. In 2018/19, the AGSA raised a specific material irregularity that had been identified. For the 2019/20 financial year, the AGSA had to verify what the Department had actually done to resolve some of those material irregularities. It took the AGSA a bit longer to verify that. That delayed the process for WTE and finalising that audit because the AGSA needed some information from the Department. The AGSA had to follow up and make sure those investigations that the Department had to institute were actually in progress and some of the outcomes of those investigations were implemented. Those were some of the delays that the AGSA experienced. The WTE and TCTA were also dependent on information coming from the Lesotho Highlands Development Agency. The challenge of this was that the Lesotho Highlands Development Authority’s audit report and financial year was one month later than the normal legislative date. That also had an impact on the AGSA. The AGSA had to make sure that the balances received for the WTE and TCTA were correctly incorporated into those two sets of financial statements. The AGSA had to go back and forth and have several engagements with them. The AGSA had to get the necessary assurances from those auditors to make ensure that they were working with the correct balances and figures. It had been a challenging year. His team had been through various engagements and he thanked them for all the additional effort that they had put in. he acknowledged that his team was late this year with specific audits and finalising those audits. He foresaw that this year going forward that would not be the case. He said that there was a third wave that was being predicted so it would have to be seen how the AGSA would deal with that. One of the things that AGSA mastered over the last 12 months was how to work remotely and still get the audit done. That was a big challenge for the AGSA. The process had changed from a hands-on approach to a more remote approach in getting the necessary information. That all impacted the timeline of finalising the audits this year. He hoped that this year would be a better year. The one thing that was consistent, year on year, was that the Lesotho Highlands Development Agency always signed off one month later. That audit report only came out at the end of August. That was a challenge the AGSA needed to deal with year on year. The AGSA would have to see how it would incorporate those balances and figures into the WTE and TCTA financial statements at an earlier time and receive the necessary assurances from those auditors. The AGSA would have to work on how it would streamline that specific process.
He then discussed the presentation. The presentation detailed the audit outcomes for the Department and its portfolio. The presentation covered the audit outcomes of the Water Boards that had been finalised. Reasons would be provided why some of the Water Boards’ audits were still outstanding. The presentation contained comparisons with previous years. The AGSA would highlight the challenges and the root causes that the Portfolio Committee needed to be aware of that gave rise to some of these findings and challenges. He thanked the Committee for allowing the AGSA to make the presentation and sharing the audit outcomes with the Committee members.
Briefing by the Auditor-General on findings and audit outcomes in assessing the financial and non-financial performance of the Department and entities for the 2019/20 financial year
Ms Surette Taljaard, Senior Manager, AGSA, briefed the Committee on the findings and audit outcomes in assessing the financial and non-financial performance of the Department and entities for the 2019/20 financial year. The Committee was briefed about all the entities in the Department’s portfolio. The financial health and financial management of the Department and the Water Boards were discussed. The briefing also detailed key recommendations to the Committee.
Audit outcomes of the Water and Sanitation portfolio over five years
The DWS audit outcome remained unchanged as material findings relating to non-compliance to key legislation remained. This included material adjustments that still had to be made on the annual financial statements submitted for audit, as well as the continued inability to prevent irregular and fruitless wasteful expenditure, not having spent conditional grants for the intended purpose, and lack of consequence management.
The TCTA audit outcome improved to an unqualified financial audit opinion, however still had material and/or significant findings on compliance with legislation also resulting from material corrections to financial statements and inadequate internal controls on financial and expenditure management as well as predetermined objectives.
The WTE audit outcome improved to an unqualified financial audit opinion, however still had material and/ or significant findings on compliance with legislation resulting from material corrections to financial statements and inadequate internal controls on financial and expenditure management.
The WRC audit outcome remained unchanged due to non-compliance with legislation identified during the audit resulting from fruitless and wasteful expenditure incurred due to penalties/interests charged on overdue accounts.
Disregard for compliance with legislation and non-compliance areas
• Quality of financial statements material misstatements were corrected (DWS, TCTA, WTE).
• Procurement and contract management terms and conditions were not the same for a contract participated into by another organ of state IT consultants (WTE).
• Expenditure management Prevention of irregular expenditure (WTE, TCTA, DWS) and fruitless and wasteful expenditure (WTE, WRC).
• Expenditure management Payments not done within 30 days (WTE).
• Conditional grants were not spent in accordance with the applicable framework, as required by section 17(1) of the DoRA during the year as it was not supported by cash on hand (DWS).
• Consequence Management did not obtain sufficient appropriate audit evidence that disciplinary steps were taken against officials who had incurred irregular expenditure (DWS).
Status of internal control
• The leadership instability persisted at top management level Accounting Officer, Chief Financial Officer for the period under review (DWS and WTE).
• Management did not ensure that there were adequate controls in place to foster a culture of compliance with laws, regulations and internal policies (TCTA)
• Management did not implement a proper record management system to support financial and performance reporting (TCTA).
• Management did not perform adequate reviews and reconciliations on the financial statements submitted for audit and underlying information, as the financial statements submitted contained material misstatements, which were corrected as a result of the audit process (DWS, WTE, TCTA).
• Management did not implement adequate controls to prevent and detect non-compliance with laws and regulations, which resulted in irregular and fruitless and wasteful expenditure. The entities incurred both irregular and fruitless and wasteful expenditure as disclosed in the annual reports. (DWS, WTE and TCTA).
• There are inadequate policies in place to enable and support the understanding, execution of internal control objectives, processes and responsibilities specifically on performance information to be reported on as required by the framework (TCTA).
Overall audit outcomes of the Water Boards portfolio over four years
• Three of nine audits were outstanding as at the reporting date, for the current year which included Sedibeng, Rand Water and Amatola.
• An improvement occurred with Mhlathuze and Magalies moving from unqualified audit reports with findings to unqualified with no findings.
• Financial statement preparation remains a concern as material adjustments are affected to AFS submitted for audit at Bloem Water, Lepelle and Umgeni.
• Some Water Boards' debtor’s collection was not adequate, as there was a significant increase in the provision for impairment of receivables Bloem, Overberg and Lepelle.
• Debtor collection period at most Water Boards were greater than 30 days, with some Water Boards collecting up to 80% within 30 days but 20% of debtors taking longer to collect.
• This might have a negative impact on service delivery for future capital projects.
Fruitless and wasteful expenditure decreased over two years
The majority of the disclosed fruitless and wasteful expenditure for the current year was caused by late payments resulting in penalties and interests.
Irregular expenditure decreased over two years
The majority of the irregular expenditure was caused by deviations from normal procurement processes which were not justifiable, extension of a contract without prior approval by the delegated official and discrepancies with bid specifications and variations not approved by National Treasury.
Material findings affecting the audit report improved due to material findings on procurement and contract management was only included for Bloem. All Supply-Chain Management findings should be investigated.
Water and Sanitation snapshot (2019/20)
There were no clean audits. There were four financially unqualified financial statements. There were three findings on performance reports. There were no findings on compliance with legislation. The total irregular expenditure was R979 million.
Water Boards snapshot (2019/20)
There were two clean audits. There were six financially unqualified financial statements. There were three findings on performance reports. There were two findings on compliance with legislation. Three Water Boards’ audit outcomes were still outstanding. The total irregular expenditure was R730 million.
• The vacant position of the accounting officer should be prioritised to ensure effective and continuous leadership within DWS and WTE. There has been a significantly high turnover rate at the level of DG over the past seven financial years as the department has had different DGs and/or acting DGs. For most of the time, the position was occupied by an acting director general. Also, the current position for Chief Financial Officer and the Deputy Director General: Water Infrastructure Management is currently occupied by acting incumbents.
• Improving internal controls pertaining to regular reviews and reconciliations of information submitted for audit, thus review and improve systems and controls to ensure quality of financial statements (DWS, WTE, TCTA) and performance information (TCTA).
• Consequence management should remain on the radar of management and implemented as and when transgressions and/or poor performance is identified and addressed effectively and timeously.
• Recovery of debt owed to them by municipalities, inhibits certain water boards to fully service their operational expenditure needs, which have to be funded from this revenue. Specific and focused debt recovery strategies are required to be implemented by management to ensure sufficient levels of cash flow is maintained to ensure uninterrupted continuation of operations which does not compromise service delivery (Water Boards).
• Oversight by the Department, Minister and Parliamentary Committees responsible for these entities should include strong in year monitoring and ensuring that governance policies and practices in place, are properly monitored.
• Improved and focused intensive stakeholder engagement and better coordination and collaboration from all the relevant role players within the sector who are responsible for the business of providing this basic need to the citizens.
Mr L Basson (DA) said that he was very concerned about the status of the Water Boards. At the end of last year there was a situation where the Water Boards were requesting funding due to non-payment by municipalities. There was an alarmingly high number of municipalities not paying the Water Boards. He wanted to know what the opinion of the AGSA was on how to resolve the problem of non-payment by municipalities. Could the AGSA make some suggestions? The problem was that in a year’s time the Water Boards would not be viable anymore because they did not get enough funding in from municipalities paying for that service. That could result in a huge failure in the water industry in the supplying of clean-drinking water to communities in South Africa. He saw that some of the audits of the Water Boards were not ready yet. He was worried about Sedibeng, Magalies and Bloem Water. Most of the Water Boards were all in the same financial trouble and it was not of their own doing. It was because they could not collect the money from municipalities. The Water Boards were receiving no support from local government and CoGTA to make sure that these payments were made to the Water Boards. He wanted the opinion of the AG on this matter.
Ms S Mokgotho (EFF) asked what were some of the reasons provided to the AGSA on the Department’s inability to obtain sufficient appropriate audit evidence on irregular expenditure. What was the impact of incomplete records on the ongoing investigations into irregular expenditure? The majority of irregular expenditure was caused by deviations from normal procurement processes and an extension of a contract without prior approval by the delegated officer. In the AGSA’s opinion, did it think that the current remedial actions taken by the Department to improve its procurement processes was sufficient and efficient? Or should there be more intervention by National Treasury? She said that on page 156 paragraph 32 the opinion talks about other information that was not provided before the date of the auditor’s report. Was that a general comment or was there still information that needed to be submitted to the AGSA by the Department? If so, what was the nature of the information that needed to be provided? Had there been a case in any Department where the AGSA retracted an audit opinion due to information provided post facto which reflected material misstatements?
Ms M Mohlala (EFF) discussed the audit opinion on the main account. The AGSA evaluated the usefulness and the reliability of the reported performance information on programme three, water infrastructure development. This was reflected on page 56 and page 57. The AGSA’s finding on this programme was that it did not identify any material findings on the reported performance information on usefulness and reliability for this programme. The Office looked at the Department’s annual performance target in relation to what the Department provided in respect of the attainment of targets for this programme. Programme three only obtained 37% of the projected targets. How did the AGSA correlate these findings when procurement issues within this programme escalated the non-attainment of many targets? She commended the Department for obtaining an unqualified audit opinion for both the main account and the Water Trading Entity. However, the AGSA was also responsible for assessing whether Departmental financial misstatements occurred when providing an opinion due to fraud or error. Did an unqualified opinion mean that the AGSA did not find any material misstatement in the Department’s financial statement? If not, could more information be provided on this matter? Although this was subsequently corrected was this not testimony that the Department’s internal control audit processes were extremely weak and should be strengthened? She then discussed the WTE. The audit opinion of the WTE was unqualified but with a number of emphasis on matters such as the under contingent assets which resulted in an overpayment of royalties emanating from the treaty between Lesotho and the Republic of South Africa. There was a restatement of corresponding figures due to errors in the financial statement as of 31 March 2020. Under material payment there was an amount of R2 billion for trade debtors and which was potentially irrecoverable. What were the implications of the emphasis of matters on the going concern of the WTE? Has the issue of overpayment of royalties by South Africa to Lesotho been resolved? Trade debtors and non-payment was a significant concern of the WTE for many years. How could the entity, in the AG’s opinion, work towards alleviating the challenges associated with trade debtors? Expenditure management within the WTE, specifically on the entities inability to prevent irregular expenditure, resulted in an amount of R142 million and irregular expenditure amounting to R11 million because of a new contract was caused by similar transgressions as those identified in previous years. What was the basis of no shift or improvement on this matter of the prior year to the year under review? For a number of years, the WTE has struggled with not having effective and appropriate steps to collect all money due to the entity. Accrued revenue rates in prior years that should have been billed had not been invoiced. The non-compliance with legislation relating to accrual revenue not being involved could result in a material financial loss of R346 million. Apartment from training personnel on proper billing and invoicing processes did the Department have any legal recourse in obtaining accrued revenue? Or should this be regarded as irrecoverable loss? On page 254 and page 255 of the annual financial statement it reflected that the Department sourced the services of 30 advisors. Was this a cause for concern? Was the AGSA satisfied with the progress on investigations and disciplinary process by the Department of Water and Sanitation? What further recommendation would the AGSA suggest on this matter? She then discussed the 13 cases of irregular expenditure condonation amounting to R9.7 billion on both the main account and the WTE. Explanations on progress stated that civil litigations or disciplinary proceedings were in progress. What were some of the high-level auditing concerns this may trigger on the going concern of the Department? The total number of the disciplinary cases against officials was 63.
Mr M Mashego (ANC) said that overall there was improvement on the work done with the WTE and the Department. There were still lots of challenges in the report. There was an assumption that the Department would come back to the Committee and provide information on the recourse taken, in terms of consequence management, based on the AG’s findings. He discussed the TCTA report. He commented on the English used in the report. The AGSA said that in its investigations it found that the financials given to them did not correlate to the money in the bank. The AGSA was given a financial statement with figures and if it did not check those figures then there could have been misreporting. He did not get a sense of what the AG found in its report and what recommendations it was making. There could have been a case of misinformation with regards to the amount of money in the account. That might be a problem. There was also a tendency of allowing contractors to do work beyond their agreed upon terms of employment. That was where a lot of corruption happened. That was when money was given to people that was not supposed to be given to those particular people. He did not know if the AGSA saw that as wrong. What was the recommended sanction that the AGSA was suggesting? In the APPs the Committee raised the issue of the accruals. There was an attempt to want to work down on those but the movement on that matter was very minimal. What was the plan to bring the expenditure that was unaccounted for and the accruals that were growing everyday down? There was no sense from the AGSA’s report that there were going to be measures put in place that were going to hold the Department accountable. He struggled to follow on a number of statements made in the report. He was generally happy that there was a betterment of a lot of findings compared to the previous years.
The Chairperson welcomed the report from the AGSA. She acknowledged the improvement. There was a huge improvement. She agreed with Mr Mashego that a lot needed to be done to ensure that the Department and entities obtained a clean audit. She saw in the AGSA’s report that this Department was one of the Departments selected for the implementation of the Public Audit Act that Parliament introduced. She discussed the repeated findings. Was the AGSA convinced that reasons given by the Department were of assistance? She then discussed the stability of the Department and the positions of the Director-General and Chief Financial Officer. The AGSA had met with the executing authority. Why was there no movement on that matter? The Committee would be interacting with the Department and the Committee would ask them the same question. This was the findings of the AGSA and the Committee wanted to understand the situation. What was the response of the executing authority? She then discussed the internal controls of the TCTA. The majority of findings showed that there were weak systems. This might be a repeated finding. What was the reason for the TCTA not strengthening those internal controls? Was the internal audit committee of TCTA doing what it was supposed to do in the AG’s view?
Mr de Haan responded to the questions relating to the breach in funding and the non-payment. One of the recommendations included was also for the Water Boards to strengthen their debtors’ collections and to improve their debtor internal controls. The AGSA found that it was a real concern currently. The AGSA noticed that there were going concern difficulties. The AGSA also wrote-off some of its audit costs just to make sure that it could accommodate some of these audits and still execute its public mandate. The best recommendation would be to strengthen the Water Boards’ debtor process. The Water Boards, as a collective, needed to approach Treasury and see how that equitable share that gets transferred through DWS could be allocated directly to them instead of the municipalities. The Water Boards needed to find an alternative in terms of keeping the municipalities as a going concern. That was one of the reasons that the AGSA included a specific slide about monitoring the debt of the Water Boards. As the AGSA was continuing with these audits it noticed that it was a concern that was building up. It would become a material issue in the future if it was not dealt with appropriately and adequately. He discussed the irregular expenditure that was ongoing in the Department. Some of the irregular expenditure investigations have been long outstanding. The AGSA had been following up on them on a regular basis. At every audit engagement it had been following up on them. The feedback received from the Department was that it had approached National Treasury and that National Treasury had provided them with some guidance. Some of the investigations were still with the SIU or was still in court. That is why National Treasury has not moved forward with the actual condonation of some of those irregular expenditures that had been long outstanding. It was a concern and the AG was raising it on a continuous basis. In terms of the PFMA and the consequence management section certain actions needed to be implemented to condone the irregular expenditure that was after the investigation. People also needed to be held accountable. The Department needed to see what it could recover with regards to the irregular expenditure incurred. The Department did do a lot of work on this matter. The Department had approached National Treasury but National Treasury provided them with feedback that it was waiting to see what was the outcome of certain pending investigations and some of the legal action that had been instituted.
He then discussed the performance information. The methodology of the AGSA talked about the usefulness and the reliability. When the AG expressed that there were no material findings that could be identified in programme three it meant that whatever the Department had reported on in their performance report was a fairly presented statement as to what had actually been achieved by the Department. In the instance where the Department said it only achieved 37% of the actual planned targets the AGSA confirmed that what the Department said was true, fair and correct. The question of why the Department only achieved 37% of the projected targets needed to be directed to the Department to understand what the challenges were for it to not achieve the full 100%. The AGSA’s methodology was only to give the user the assurance that what was stated in the annual performance report was a true, accurate and fair reflection of the Department’s affairs.
He then discussed the other information included in the audit report. When the AGSA referred to that other information it referred to other information in the annual report. It did not refer to information that it had reviewed and that had been audited or that formed part of the audit opinion or performance information. Once the AGSA received the annual report it would make sure that there were no contradicting statements in the additional information of the annual report. That reference paragraph was indicating that when the AGSA signed the audit report it did not receive additional information in the annual report and that it would be submitted subsequently. He explained how the process worked. In an ideal audit cycle the AGSA would sign the audit report on 31 July. Then the Department still had one month to prepare their annual report which would then be submitted at the end of August to Parliament for tabling. Within that month of August the Department would submit their full annual report to the AGSA. The AGSA would go through that annual report and proofread it. The AGSA would make sure that there were no contradictory statements which would contradict the AG’s audit conclusion. The AGSA would ensure that all of the information would be aligned. The AGSA would then provide the Department with feedback and to update the annual report where it was needed. In that instance the AGSA would give an assurance that the information included in the annual report was also in line with audit evidence that had been provided. That paragraph meant that at the date that the audit report was signed the additional information had not yet been received. Subsequently, the AGSA had done the proofreading and had gone through the annual report that was presented to the Committee. The AGSA had provided the Department with the necessary assurance that there was no contradicting information in the annual report that had been received. He then discussed the stability of the DG. This had been specifically included in the slides to mention that there was an impact of not having an appointed Director-General. The AGSA saw a specific impact in the shift in leadership and the continuous change of the Director-General. In most institutions once top management kept on changing it did have an impact on the internal control environment because every new leader that came in would want things done in a certain way. That impacted the internal control environment and filtered down. That was one of the things that the AGSA started highlighting with the Portfolio Committee. The AGSA also had engagements with the Minister on this matter. This was highlighted as one of the priority areas that needed to receive the necessary attention so that the Department could appoint a Director-General that could start maturing in that role and move the Department forward in improving the internal control environment overall. The AGSA had raised this matter with the executive authority. He was not sure where the Department was in the process of appointing a DG. That was a question that could be directed to the Department or the executive authority directly to find out where the Department was in the appointment process of the DG.
Ms Herashma Ameeka, Senior Manager, AGSA, responded to the question about the TCTA’s internal control weaknesses. For TCTA the audit opinion was unqualified. However, the AGSA did notice weaknesses in internal controls relating to inadequate reviews and reconciliations of the financial statements that were submitted. These did not agree to underlying supporting information. There was also a lack of adequate review processes and controls by senior personnel. There was also a slow response by management to information requests. The AGSA also found that management did not implement adequate record keeping in a timely manner. She discussed the implementation of the Lesotho Highlands Water Project which occurred across borders. Certain supporting schedules were not obtained. She said that as of 31 March the AGSA noticed that there was a positive bank balance of R1 million compared to an overdrawn balance compared to the three previous consecutive years. The AG noticed a surplus of R5.4 billion compared to R2.2 billion in the previous financial year. There was a net cash flow of R8.3 billion compared to R8.4 billion in the previous year. Because of these positive balances and rations the AG did assess WTE to be a going concern. Most of these positive impacts were as a result of management exercising stringent budget control.
Mr de Haan thanked the members for their questions. If the delegation did not answer any questions he asked that the question be asked again so that the delegation from the AGSA could answer it.
Ms Mohlala said that the presenters did not respond to her question regarding the 30 advisors. She wanted the delegation to respond to the question.
Mr de Haan asked Ms Mohlala to ask her question again so that the AGSA could respond to her question appropriately. He apologised for missing the question.
Ms Mohlala repeated her question. She said that on page 254 and 255 of the annual financial statement of the Department for 2019/20 it reflected that the Department sourced the services of 30 advisors. Was this not a cause for concern?
Mr de Haan responded that he was not sure what this specifically referred to. He asked members of his delegation to go through the annual report. He said that the Department would source advisors wherever it did not have the necessary expertise or skills within the Department to advise them internally. He understood the question to ask if there was a high dependency on consultants or advisors in the Department and if that was not a point of concern. He said that about eight years ago there was a specific audit that the AGSA did on consultants and how the Department used consultants excessively. One of the recommendations the AGSA made back then was that if a Department continued to use the same advisors, for example if a Department used engineers continuously to build water infrastructure projects, then it would need to do a cost benefit analysis to try and identify if it would be more viable appoint an engineer fulltime within the Department versus using consultants all the time. If that was Ms Mohlala’s concern or question the AGSA would look into it in more detail. The AGSA had not looked into the matter in much detail with regard to how many advisors the Department had used. He asked that Ms Mohlala give the AG an indication as to what was the risk she saw. The AGSA would then go back and see if it covered the matter in its detailed working papers. The AGSA would then be able to provide a formal response Ms Mohlala on how the AG would address this matter going forward.
The Chairperson said that the Department of Planning, Monitoring and Evaluation still needed to present and that they would focus on the implementation on the Public Service Act. That presentation would also focus on how the Department implements the strategic framework. She said that the matter raised could be answered in that part of the meeting. If the member was not happy with the response, then the Committee could ask the AGSA to advise on the issue.
Mr de Haan said that the CFO of the Department wanted to respond to Ms Mohlala’s question.
Mr Frans Moatshe, Chief Financial Officer, DWS, said that the question did not relate to the consultants but rather to the committees that were appointed. He said that it was extensively explained by the Deputy Business Executive. He said that it was not about the consultants appointed by the Department but rather the advisory committees that the question related to.
The Chairperson said that the AGSA responded to Ms Mohlala’s question and that they would look into the matter. The DPME was still to present and the question could also be directed at them. If Ms Mohlala was not happy with the answer, when the Committee engaged with the Department and the Minister the matter could still be discussed then.
Ms Mohlala said that the AGSA asked about what risk it foresaw. She requested that the AG give her a written response. She discussed the risk that she saw. She wanted to know why there were no skills in the Department. She wanted to know whether skills were transferred from advisors to permanent staff? This is the information she wanted to know. She wanted to emphasise an issue. She wanted to know if there were reports available on the work undertaken by the advisors. There were 30 advisors. Was there any report on the work undertaken by these advisors? In the AGSA’s written response she asked that all that information be included. Her worry was that there was no transformation and that the Department lacked skills and that was why it got advisors to do the work for it. Why were the skills not being transferred to permanent staff members?
The Chairperson said that the issue needed to be interrogated. She said that members needed to be cognisant that were other things that came with employing full-time personnel like the pension fund. She said that Ms Mohlala raised an important point and that the Committee should take it forward when it engaged with the Minister. The Committee could then understand why there were 30 advisors and find a conclusion on the matter. The Committee could then request the AGSA to look into the matter. She thanked the AGSA for the continuous good work that it did for the country. She committed that the recommendation that it placed before the Portfolio Committee would be taken forward by it and adopted as a recommendation to Parliament. The Committee wanted the Department to start implementing the recommendations. She thanked the executive for availing itself to present to the Committee.
Mr de Haan thanked the Committee for the fruitful engagement.
The Chairperson invited the DPME to brief the Committee.
Briefing by Department of Planning, Monitoring and Evaluation (DPME)
Mr Robert Nkuna, Director-General, DPME, said that the purpose of the presentation was to brief the Committee on the performance of the Department of Water and Sanitation. In the DPME’s last engagement with the Committee the Committee indicated that it wanted DPME to go deeper and verify the information it received from the Departments. That was what the Department had been doing and it would continue to do that with its limited resources.
The Department of Water and Sanitation was one of the key Departments with regards to the delivery of services. As the District Development Model (DDM) would be implemented in the coming financial year, this was one of the areas that needed to be prioritised. The Department had issued guidelines for geo-referencing so that all projects for Departments were geo-referenced. That would make it easy for anyone who did monitoring to know where the projects were located and the Department would follow up on that. That would also benefit Parliament to have a sense of where the projects of the Department of Water and Sanitation were located. The other issue the DPME was grappling with was that Government Departments transferred quite a lot of money to State entities. Looking at what any specific Department gets allocated from Treasury most of the money would go to the entities that fall under that Department. If the DPME reported only on the work of the Departments and not on the work of the entities, then there would be serious challenges. Going forward the DPME would also want to look into that situation. In the DPME’s next report it would also report on the performance of the entities including TCTA, WTE and others. That was what the Department was going to be doing.
He then discussed the capacity of the State. The DPME was involved in engagements on the capacity of the State. That included the leadership of DPSA. The question on the Director-General of the Department was a very relevant question that the members have raised. In the presentation made by the DPSA two weeks ago to another Portfolio Committee this issue came up. The vacancy had been in existence since 30 November 2017. That meant for 37 months there was no Director-General in this particular Department. This was a cause for concern and the DPSA was grappling with this issue. There were other Departments with the same issue with some going up to 65 months without a Director-General being appointed. The report that the DPSA had presented to the Portfolio Committee on Public Administration was publicly available. The DPSA could give further details. There was a concern expressed by that Department with regards to the vacancy of the DG position. He then discussed the question regarding the advisors. It was expected that Government Departments would fill vacancies that existed because that spoke to building the capacity of the State. It all depended on the specific situation and what the motivation would be. He said that Ministers had two advisors each and where Ministers wanted to appoint more advisors then they would have to seek the approval of the Minister of Pubic Service and Administration. Access to the establishment for one reason or another would also need the approval of the Minister of Public Service and Administration. The Department would follow up with the DPSA on whether this had been an issue for them. The Department would then provide feedback on the matter. Members could also raise this matter with the two Ministers, the Minister of Human Settlements and then the Minister of Public Service and Administration.
Mr Nkuna stated that he had two colleagues who would be helping him deliver the presentation. The presentation would also highlight some of the issues that were raised previously in the Department’s engagement with the Committee and indicate how it was beginning to deal with some of the recommendations that were received from the Committee. The presentation would be concluded with the Department’s own recommendations on some of the pertinent issues. He emphasised the point that the Department was reporting against the commitments of the DWS as of the 2019/20 financial year. The Department did take into account some of the recent developments and the presentation would highlight some of the key issues and some of the questions were raised in the questions earlier on in the Committee’s engagement with the AGSA.
DPME on the performance by the Department of Water and Sanitation on the Government priorities relating to outcomes in the 2019/20 financial year
Mr Hassen Mahomed, Outcome Facilitator - Local Government and Human Settlement, DPME, briefed the Committee on the performance by the Department of Water and Sanitation on the Government’s priorities relating to Outcome in the 2019/20 financial year. The presentation covered water security 2019/20 performance and its delivery progress, the state of ecological infrastructure 2019/20 performance and its delivery progress and finally the basic services performance for 2019/20 and its delivery performance. Factors affecting achievement of performance targets and reflections were also presented.
Water Security - 2019/20 Performance
The first intervention was to diversify the water mix through implementation of Water and Sanitation Masterplan. The 2019/20 target was for the National Water and Sanitation Master Plan to be updated. This target was 100% achieved. The second intervention was to reduce delays in water use licenses. The 2019/20 target was for 80% of applications to be processed and finalized within a reasonable timeframe. The actual performance was that 88% of applications for water use authorisation finalised within 300 days.
Improved Ecological Infrastructure - 2019/20 Performance
The target for main stem rivers to be monitored for implementation of Resource Directed Measures was not achieved. The target for river eco-status monitoring was exceeded. 76 rivers eco-status were monitoring implemented. The intervention of mine water/wastewater management plans to be implemented was achieved. The target for water uses in various sectors to be monitored for compliance with water use licenses was exceeded. 317 water users were monitored for compliance. 84% of reported non-compliant cases investigated.
Access to Basic Services - 2019/20 Performance
The target to develop a conceptual framework for the National Sanitation Integrated Plan was 100% achieved. There was also the intervention of the eradication of the bucket sanitation system. 692 bucket sanitation systems were replaced. There was an agreement with HDA to be the implementing agent. The target of monitoring non-compliant water systems against the regulatory standards was achieved. 389 non-compliant water supply systems monitored against the regulatory standards.
Development Indicators 2019 for Basic Services: Access to piped water
- Since 2006 access has hovered between 89 and 90% suggesting that access to piped water has kept pace with new household formation.
- Of the 482 814 additional households provided access between 2017 and 2018.
Development Indicators 2019 for Basic Services: Access to sanitation
- Although an additional 1 984 684 households had access to improved sanitation facilities during the period, 2014 to 2018, this is unlikely to achieve the MTSF target of 90 percent having access by 2024.
Development Indicators 2019 for Basic Services: Public opinion on delivery of basic services
- The decline in public trust and confidence in local government to deliver basic services (decrease from 52% in 2018 to 49% in 2019) indicates that there are concerns amongst the public regarding the delivery of basic services by the government.
Factors Affecting Achievement of Performance Targets
- The sector’s financial sustainability is threatened with increasing funding needs (additional R33 billion will be required each year for the next ten years to achieve water security - NWSMP, 2019) but fiscal funding is limited due to the economic recession, reduced revenues and accumulating debt.
- The current skills shortage and inadequate technical skills at the local government level result in slow pace of delivery and a reliance on over-priced consultants. Out of 278 municipalities in SA, 202 municipalities are without civil engineers (SIDSSA presentation, 2020).
- Challenges in the procurement process results in delays in contracting. This may be caused by poor project planning and improper project management; reflected in the Department’s financial statements under irregular expenditure.
- Technical efficiency of water boards is 49% with only 3 out of the 9 water boards being technically efficient. Creating viable water boards through the merging of some of the smaller water boards into large regional water utilities support the principle that the efficient use of resources will improve operational levels.
- Major delays experienced with respect to the planning, design and execution of a number of water resource projects due to lack of institutional capacity, corruption and financial constraints, resulting in cost escalations.
Reflections and Conclusion
- Overall, water and sanitation projects have shown satisfactory progress during 2019/2020 period.
- Resolve all issues affecting the rollout and completion of the remaining Bucket Eradication Projects as a matter of urgency.
- Multi-disciplinary revenue task team has been established to address non-payment of bulk water by municipalities coupled with a political solution to municipalities not paying their debt.
- Consideration is being given to an institutional realignment through rationalisation of Water Boards into Regional Utilities as options to unlock expansion of services.
- Establish an Independent Water Regulator (IWR) to improve regulation throughout the value chain to achieve water security and to support the delivery of critical key functions in the water sector. The IWR will regulate tariffs, standards and performance in the water services sector to ensure the efficient and effective utilisation of water resources and the sustainable management thereof whilst protecting the interest of the consumer and the public.
Ms Mohlala asked a high-level question. It was not possible to talk about water security without assessing food security. It was concerning in the DPME presentation that there was an absence of analysis on the impact of future water insecurity issues on the availability of food sources not only in South Africa but in Africa as a whole. She wanted the analysis from the DPME to provide options for the future sustainable management of the food, water and energy nexus. Did South Africa have innovative approaches, strategies and technologies to address future needs of South Africans to ensure water security equals future food security?
Mr Nkuna said that the question was very correct. The Water Masterplan sought to deal with the issue of the long-term needs of the country. That was under control in that respect. He then discussed food security. The Department was running a project. A report was just finalised on food security and it did touch on the water issue. It could be that these were two separate processes. Once one was aware of the food and nutrition process versus the water process then one would see that thinking had gone into the issues that had been raised. He said it was known that there was a need for reforms to be instituted in the energy sector. He said that Ms Mohlala was correct that a long-term view was needed on this matter. That work has been happening in Government. Recently there were announcements of some new renewable energy projects. Overall, there was work being done. It could be that once these issues were presented they were presented in different meetings as opposed to being an integrated presentation. In this presentation the DPME focused on the water sector in a very narrow sense. If the guidance was that in the future when the DPME appeared before the Committee it should also talk about other interdependencies, then the team would accept that point moving forward. The team would then know that even when it talked about water it would also look at other related issues and reflect on them. The Department would take that point. In the next presentation the Department would also deal with other related issues even if it did not belong to this sector.
Ms C Seoposengwe (ANC) asked what plans the Department had to ensure implementation for targets to be achieved. She saw that this was a challenge. How far was the process of internal consultation for the indicator to be achieved?
Ms Sihlwayi said that it was always good to listen to the Department’s problems and challenges. She wanted to know from the presenters if the Department was over planning its targets? She raised the issue because there were people who listened to these targets as they were planned and that these targets were not achievable. It worried those people. She asked the DPME if it was difficult for its involvement in planning when those targets were made? She said for DPME to really raise questions that when a Department said it wanted to achieve 90% on the issue of water security it needed to remember that it was an interdependent Department. Did the DPME rope them in so that the Departments planned together towards the achievement? She found the issues raised by the DPME to be very strange when they said that municipalities did not have engineers. For more than 20 years municipalities have not had engineers. How was that accounted for? Engineers were part of a professional body that could be deployed to different municipalities. How did it happen that there were no engineers in municipalities? She wanted to hear a proposal from the Department on the issue of non-performance of municipalities. Continuously National Departments were dependent on municipalities’ responses towards the funds that were sent to them to give services to people. What needed to be done? She heard about the integrated development model. There was something that needed to be done because the DPME could not say that municipalities must stay away from certain plans and programmes. What was the proposal of the Department on this matter? It was a critical matter which continued to be a problem.
Ms G Tseke (ANC) said that the country had been hit hard by the Covid-19 pandemic which has affected too many programmes and projects within the public sector and this has affected the country’s economic status. Was the DPME currently engaging on the revision of targets as highlighted in the NDP and in the medium-term strategic framework?
Ms Seoposengwe wanted more information about the 7000 learners who had completed their course and could not be accommodated in their municipalities. It was always said that there was no capacity at a municipality level. Did that mean training learners was fruitless expenditure? If the learners could not be utilised in municipalities then where else where they going to go? Government spent a lot of money on training these learners. What was the Department doing to make sure that these learners were properly allocated to different municipalities and being accommodated? She then asked how far the Department was on the matter of the Water Bill?
Mr David Mahlobo, Deputy Minister of Water and Sanitation, said that the questions relating to the DPME should be answered first and then he would answer the questions directed to the DWS.
The Chairperson raised a concern over the capacity of municipalities. She said that planning and monitoring was part of the Presidency. She said that the President and Premiers were usually apart of the President's Coordinating Council (PCC). She wanted to know if it was possible for the DPME to raise this issue in that forum or to notify the President? One of the disruptions that was felt in the municipalities was created by a lack of skills in the municipalities. Municipalities were continuously employing people. Municipalities were often advertising for labour. There were many engineers that had been produced through higher education who were not actually getting employment at the level of municipalities because of the tender processes. This question should be raised in that meeting where municipalities should be forced to employ new graduates who had the skills. She said that the issue of tenders should not replace the State’s capacity. If there was no enforcement at that National level to municipalities then the country would continue to experience the problem of capacity in municipalities. In adverts municipalities were employing 50 labourers. Municipalities were not taking care of the skills. The Department at some point raised the issue that, particularly after it assessed the wastewater treatment plants that were not functional, the majority of municipalities did not have the required skills. There was no interest in municipalities to address that issue. What could be done without harming the Constitutional obligations of various sectors of Government? She said that maybe if local could not perform that National Government could perform those services. National Government could build capacity and then hand over the programme back to municipalities. At what point would Government be revoking that legislation? Her question was directed to the DPME, the DWS using the Office of the Presidency.
Mr Nkuna responded to the question of vocational training and internships. He agreed that the Department could be doing better. These were the questions being considered in the employment stimulus in the discussions that were taking place in planning for the creation of jobs. These issues were being looked into. The Department would take on what the Chairperson had raised in the Department’s engagement around the role of SOCs. Historically, SOCs have been training grounds for young people. That situation needed to be reverted back to. The Department would raise this matter as part of the discussions with regards to the role of SOCs in the developmental state so that they also assisted in creating skills in society. That recommendation would be taken forward. He then responded to the questions Ms Tseke raised. The APPs were revised for the 2020/21 financial year because of Covid. The Department did not revise the prior years’ APPs. Some of the targets that were revised because of the budget reprioritisation had been reinstated. When the Department presents its new APP, he would request that that matter be discussed. The new APP should show which targets were cancelled in the current financial year and how they were reinstated in the new financial year. He had not looked at the specific cases of this Department. In his engagements with Departments, he went back to some of the targets that were cancelled and it was asked that those targets be reinstated. Doing so depended on the availability of resources and whether there was money to finance those targets. There were cases where the targets that were initially rescheduled had been reinstated. It would differ from one situation to another. He requested that when the Department came to present the new APP that the extent to which certain targets had been reinstated.
He discussed the role of the DPME in planning. The DPME did meet with Departments. First, Departments would send them drafts. The DPME looked at each APP and wrote back to Departments where clarity was needed. It was incumbent on the DGs and Ministers to say after that engagement with DPME this is what the specific Department could do. The DPME did an audit of what it received from Departments. The Departments first sent drafts. The DPME would then comment on the draft. The Department then sent the final APPs. The final APPs sent to the DPME amount to agreements between the Ministers and DGs that given the resources at the disposal of the Department it would be able to complete certain projects. He then discussed consequence management of non-implementation. All Ministers have now signed performance agreements which was also published. The assessment of performance would no longer be limited to DPME and its interaction with the DGs. The engagements would also move higher up and provide the President with a sense of what was happening. At the end of every financial year the DPME was going to produce a scorecard of performance that would be sent to the President so that the President could look at the performance of the Departments. That would allow Ministers to account for lack of performance. The role of the President would be understood from a performance point of view. He mentioned how the President would be able to intervene through the PCC.
Mr Mahomed responded to the issue of the engineers. A skills assessment has been done and that was what the assessment arrived at. It was a problem as members had pointed out. It was a critical skill at the municipal level because they were responsible for very important technical services such as water, sanitation and energy. Those critical skills need to find their way into municipalities. That issue had to be raised within the various forums where MECs were present as well as representatives of the local government sector to see how that particular challenge could be addressed to ensure that municipalities had the requisite skills. He said that engineers were important but it was a bigger issue and it needed to be addressed. It was not only restricted to technical services. Similar problems were also found in the budget office and CFOs. National Treasury and the AG has reported in the audit outcome of how within that budget office the staff were who did not have the competencies and skills to do the job. The point was that it was a big issue and it needed to be systematically addressed in the right forums and with the right role-players involved. He discussed the training done in municipalities. The municipalities had been successful in training but the take up was a problem. The Department was urging that rather than continuing to emphasis training when absorption was not happening was problematic. The issue needed to be resolved of how these trainees would be integrated into the municipal organisation before more trainees get trained and funds were spent. Rather than training and then finding which municipalities would like to absorb these trainees the model needed to be relooked at so that prior arrangement was made with municipalities about how many they were prepared to absorb. The training needed to address the demand of an issue rather than oversupplying trainees who could not be accommodated. He said that the DWS would have more to add and how it was attending to that particular problem of take up by municipalities.
Deputy Minister Mahlobo thanked the delegation from the DPME and the Auditor-General of South Africa for the presentations. He acknowledged that there were a lot of areas where improvement was needed as the members raised in the meeting. The Department was seeking to improve as it had challenges for quite some time. He said that the officials of the Department were trying their best when it came to stabilising and following up on certain issues. The Department was not at a stage yet where it could say that it was proud but at least there was progress being made. The DPME and Treasury remained the DWS’s good partners. The DPME assessed the performance and quality of the DWS’s planning. The DWS also benefited from the DPME’s reports. He discussed important policy issues. He suggested that when the team had time then it could share some of the work it was doing on the water, energy and food nexus with the Portfolio Committee. There was a high volume of work being done by the Department’s entities including the Water Research Commission. The National Water and Sanitation Masterplan took into consideration how water was an important catalyst for socio-economic development. Many South Africans, particularly black people, were denied access to water. They were denied the economic benefits of water. There were many economic benefits associated with water. He was familiar with the work that the Water Research Commission was doing. Work was being done with the Department of Agriculture and the Department of Energy. When the Committee had time the Department would be able to share that information.
He discussed the issue of the war on leaks and those particular learners. There had been no movement in the placing of these learners. The Department had a number of engagements with COGTA and the two Ministers, the Minister of Human Settlements, Water and Sanitation and the Minister of Cooperative Governance. The Department had raised this issue with the MECs responsible for local government including SALGA. The Department was pleased to note that the President of SALGA returned to municipalities and insisted that they cannot continue to complain about the high levels of non-revenue water. That was in part caused by physical losses and the others were just unaccounted for including deteriorating infrastructure that had failed. This past Monday the Department had an opportunity with the Ambassador of Japan. Japan was supporting South Africa. The Department created a training facility that was sponsored by the Japanese Government. A number of municipalities were participating including practitioners. It looked like some municipalities liked people who had been trained through that partnership with the Japanese. The Department made the decision that before some of these officials could be taken by municipalities they would go through that particular programme so that the Department could give them that particular exposure. He accepted the Committee’s point about engineers. The Department would have a discussion at the level of the PCC because it was correct that universities had produced a lot of engineering graduates. Most of the municipalities did not have engineers. They had a lot of technicians. He said a number of them remain graduates and not engineers because there were still some difficulties with their own tutelage. There was a problem with the graduates becoming engineers with the Engineering Council of South Africa. That issue needed to be looked at. The Department was working with COGTA. The Department was mobilising on capacity and this included strengthening the relationship with the Cubans. More engineers were being brought in. He provided the example of the Minister deploying engineers in Mfuleni to address the challenges being experienced there. Infrastructure was not being managed well. He said that it should be made a Government issue through the various forums with the DPME and the DWS. The problems in municipalities were deep-rooted. The Department was trying its best, with limited resources, to support municipalities. The reality was that there were those municipalities that were not viable. Certain municipalities used the money given to them for salary bills even though their salary bills were very high. These municipalities could not do the basics especially when it came to discharging a function like a water services function. That was why now and then the Department had to come in and do the secondary function of support. Some of the support that the Department gave to the municipalities was not usually funded.
He responded to questions relating to the achievement of targets of the Department. That matter would be discussed more when the annual report of the Department was discussed especially the programme for infrastructure. There had been some procurement challenges in the Department. The Acting DG at the time tried to streamline the issues of procurement. Procurement in the Department was the source of some challenges including malfeasance. That was why a number of disciplinary issues were there. Those systems had been improved. Some of the infrastructure projects were multi-year projects. The Department would have discussions with the Committee when it considered its report. The Department received the AG report. The Department had also received the DPME report. That was the area that the Department would be able to spend more time. How does the Department improve its capability and its discipline of project management? The Department needed to improve its ability to perform contract management when it was in business with an implementing agent. He highlighted the importance of contract and project management. Those were some of the issues that the Department could speak to. He thanked the work done by the Department’s two partners and the work done in the previous financial years and the feedback they had given. He hoped that as this financial year came to a close the Department cooperated in improving on providing documents and records on time. Through the Acting DG and the CFO, the Department should be able to do that.
Ms Deborah Mochotlhi, Acting Director-General, DWS, addressed the question about advisors. She said that the advisors had nothing to do with the ministerial handbook. In terms of the National Water Act 36. of 1998 chapter 9 section 99, the Minister may establish an advisory committee. The conditions, including the remuneration, were detailed in that section. In terms of the Water Services Act 108. of 1997 chapter 8 section 51, the Minister may also establish water services committees. Sometimes the words advisors and committees were used interchangeably but there were differences. One dealt with water resources and the other dealt with water services. The Minister may assign duties to them as she saw fit or as the need dictates. She discussed the over-reliance on consultants. The over-reliance on consultants had reduced drastically over the years. The Department was forced into that by the constrained fiscus. It did not happen overnight. This could be illustrated through the budget that the Department received from National Treasury. The Department was using stringent measures before it approved that consultants be used. One of the measures that was put in place was to request from the team, or whoever was requesting for the utilisation of consultants, to look at what had been done and what the WRC might have produced. The Department would rather review than start the process afresh. Sometimes what the Department found there helped it reduce the size and the scope of the project to the bare minimum.
She then discussed control measures. She would not defend that the Department had strong control measures. However, she said that over the years the Department had put control measures in place. Sometimes the problem was not the absence of a control measure, it was because some people got creative and circumvented those control measures. One would say that if those control measures could be circumvented then it meant that they were not strong. She said that even banking systems were hacked and that is why they were checked from time to time. The Department kept checking its controls systems and when something happened it looked into how that thing happened. The Department looked at how it could further strengthen the control measures in the Department. The Department had improved and accelerated consequence management emanating from the investigation reports that were ongoing inside the Department. The Department was not only reliant on the SIU. It also did its own internal investigation. The Department had done a number of forensic audits from which consequence management steps were taken. She reminded the members that it was not a quick process. During the process of a disciplinary matter a lot of things cropped up that could delay the process. If someone produced a medical certificate to say that they were not well the proceedings could not proceed. When someone changed lawyers that also delayed the process. Certain provisions were allowed for in the labour laws. The Minister had also established a Ministerial disciplinary committee. That Ministerial disciplinary committee focused on SMS cases. It was mostly for SMS cases that the Department was battling to get evidence leaders. The matter was receiving attention. The Department hoped to win that battle.
She then discussed the issue of the war on leaks. The Department was part of inter-Ministerial engagements. The Department was experiencing resistance in some cases. Prior to the start of the programme the municipalities were involved. The municipalities were asked to provide names of the candidates from their areas. What also informed the selection was the high volumes of water losses. The Department chose more numbers where there were high water losses. It was unfortunate that the Department found itself in the situation where it seemed as if this was new to most of the municipalities. It was not new. This was to assist the country to save money on water losses. The country was water scarce and every effort was being taken to reduce the water losses. The Department believed that every citizen and official in the country would assist in that process. R9 billion lost was not a little money and it was not a few cents. The Presidency was also trying to assist the Department. The Department was taking every avenue to get the candidates absorbed into structures so that it could improve on its skills. She discussed the issue of engineers. It was not only impacting on municipalities. The Department was also impacted by the lack of adequate skills. It was not any and every engineer that could be given any and every job. When the structure failed there needed to be somebody who was adequately trained and registered for that person to take accountability for what happened. The lives of South Africans could not be risked by taking engineers that were not adequately registered and trained. The associated risk of the number of lives lost if a certain structure failed was looked at and considered. There was a risk associated with the Department’s structures and therefore it needed to be very careful. The unfortunate thing was that the mentorship had not been very good. The registering bodies had not transformed at the speed in which they should have. That was why the country was faced with this shortage of skills. The Department and the entire sector were faced with ageing technical skill. Focused attention needed to be given to this matter and not only to municipalities but for the entire sector. She discussed the achievements of the Department and how it planned. She believed that the Department was doing its best. There were certain projects and certain targets that the Department was required to put in the APP based on the budget. She said that the next time the Department came to present the annual report to the Committee it would be able to explain why it put whatever it put in the APP and why it did not achieve as it had planned. The Department was zealous to deliver on its mandate. Every day the Department was embarrassed and felt saddened by the circumstances it saw its fellow citizens in with regard to lack of water and poor sanitation. The Department was zealous and trying its best. There were circumstances that were sometimes beyond the Department’s control. The Department intervened at a higher percentage in the municipal space with limited resources, human capacity and its limited budget. The Department intervened at a higher percentage in this area. Whenever there was a crisis this Department was the first to react. That also impacted on the Department’s capacity to deliver on its primary mandate. The Department would elaborate on some of these matters when it came back to present its annual report and the performance assessment that it did per quarter.
The Chairperson said that the Department still had more time to interact with the Committee when it delivered the annual report. Members would have enough time to engage with the Department. Today the Committee focused on the reports from the DPME and the AG. She thanked the DWS for the clarity it had provided on some of the issues.
Ms Mohlala said the issue of 30 advisors was a point of concern for all the members. She was not against the fact that the Minister appointed advisors. However, the number of advisors appointed was too high. She requested that she receive a written response with regard to the progress reports on the work that the 30 advisors had completed for the financial year under review. She wanted the Committee to receive that information so that they knew what work the advisors were doing. It was a matter of concern. The number was too high. She then raised the issue of municipalities and the National Department. She said the members were sitting in this Committee and listening as if they were talking about the ANC and the EFF. Most of the municipalities were run by the ANC. The Committee came into meetings hearing the ANC blame each other when it had the power to control things.
The Chairperson said that Ms Mohlala was out of order.
Ms Mohlala said that she was not out of order.
The Chairperson said that Ms Mohlala was out of order because the Committee was talking about the Government.
Ms Mohlala asked who was running Government.
The Chairperson said that Ms Mohlala was out of order. She indicated that the Committee still had enough time to engage with the issues the Department raised.
Ms Mohlala asked the Chairperson how she was out of order.
The Chairperson said that Ms Mohlala was out of order because she was talking about the ANC in the meeting and the meeting was about Government.
Ms Mohlala said that the ANC was in power.
The Chairperson reiterated that Ms Mohlala was out of order.
Ms Mohlala said that whenever she discussed the Government the name of the ANC would be brought up.
The Chairperson said that Ms Mohlala was out of order.
Ms Mohlala said that she was not out of order and that it was the Chairperson that was out of order. She said that she was trying to raise her point. The ANC was the ruling party. She said the Chairperson was the one out of order.
Mr M Tseki (ANC) asked the Chairperson to mute Ms Mohlala. He said that Ms Mohlala was being ill-disciplined in this meeting.
Ms Mohlala said that Mr Tseki was the one who was ill-disciplined because she was talking.
The Chairperson said that Ms Mohlala needed to listen. The Department was coming to present to the Committee again and members would have enough time to interact with those issues. The AG and DPME gave their reports and issues that were affecting the Department. The Department still needed to come and respond to the Committee. In that meeting the Committee would engage with the statement made by Ms Mohlala. She said that this was not the right time to raise those issues. That was why she was out of order.
The Chairperson thanked the DPME for its report as it would help the Committee engage with the Department. She also thanked the AG for the issues that it had raised. When the Committee interacted with the Department it would use these reports as a reference point. The intention of this process was the process of BRRR which would identify the weaknesses and strengths. Suggestions would be made to Parliament on how these issues could be resolved. She thanked the DG and the team for being present.
The meeting was adjourned.
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