Investigations and disciplinary processes by the Department of Water and Sanitation; with Minister
Meeting Summary
The Portfolio Committee convened in a virtual meeting to be briefed by the Department of Water and Sanitation (DWS) on disciplinary processes conducted in the Department.
The Committee welcomed the presence of the Minister as a commitment of his office to working with the Committee to hold people accountable and turn around the DWS, which had been plagued by systematic corruption for years on end. Members were pleased that the Minister could find time to address them in such a transparent and decisive manner, and expressed their commitment to support him and his Department’s efforts in working towards a clean audit in the next financial year. They expressed a general sentiment of gratitude for the work the DWS was doing under the leadership of the Minister, and welcomed his bold stance on uncovering and uprooting corruption, and holding people accountable within the Department.
The Minister expressed grave concern about the number of investigations and corruption charges that had been levelled, mostly against internal officials and external suppliers. He likened the Department to having become a police station, with the large number of corruption cases levelled against officials, and the investigations still underway in the Department.
The Department broke down its presentation into both internal and external investigations, and according to which statutory bodies these were being investigated under. The Committee welcomed this level of detail and encouraged the Department to keep them informed of developments in investigations so that Members could also be held accountable by the people they represented. The Chairperson said the kind of dialogue that had taken place in the meeting was one that could really ensure service delivery while addressing the root cause of corruption within the Department. Members encouraged the Minister and his delegation to continue with the good work and continue to call briefings of this nature, to involve the Committee in restoring the credibility of the Department within communities, and in cleaning up the Department once and for all.
Meeting report
Minister Senzo Mchunu and his Deputy Minister, Dikeledi Magadzi, tendered apologies for their absence from the meeting.
Ms Hlumela Mantashe, a representative from the office of David Mahlobo, the Deputy Minister, said that he was meant to lead the delegation from the Department, but she was having difficulty reaching him this morning.
The Chairperson said it was a challenge accepting the apology from the representative, as it was the Department that had asked for the meeting and the Department should have made all the necessary arrangements to ensure the Deputy Minister attended it.
Adoption of minutes and reports
The Chairperson suggested that while the Department representatives tried to locate Deputy Minister Mahlobo, the Committee would continue with the adoption of previous minutes and reports.
Draft minutes dated 30 November 2021, 15 and 22 February 2022, and 1 March 2022 were all adopted. The accompanying observations and recommendations from the draft report on 3rd quarter expenditure and performance for the Department of Water and Sanitation's (DWS's) 2021/22 financial year were also readout.
Ms Shereen Dawood, Committee Content Advisor, noted that when the secretariat was capturing the observations, they had found that the observations had been responded to by the Department in detail. The recommendations that the Department said they would respond to in writing were clearly marked in the draft report. The report was adopted by Members.
The draft report of the Eastern Cape oversight visit from 24 to 27 January dealt with a high-level presentation on the situational analysis of water and sanitation in the Eastern Cape. The Committee had visited various projects across municipalities in the region. The report gave an overview of each project, the expenditure to date, reasons for variances where they existed, site observations by Committee Members, and responses and some mitigating plans from the DWS. This report was also adopted by Members.
The Chairperson acknowledged the presence of Minster Senzo Mchunu, who had joined the meeting after the Committee’s adoption of minutes but before the deliberations on the draft report of the Eastern Cape oversight visit.
On that note, the Chairperson handed over to Minister Mchunu to lead his delegation on the briefing.
Briefing by Department of Water and Sanitation: Disciplinary cases and matters investigated by Department
Minister's overview
Minister Mchunu requested that the Committee make available to the Department the draft report of the Eastern Cape oversight visit so the Department could attend to the matters raised, especially when the Department goes for their visit to Gqeberha.
The Minister made an apology for the absence of the Deputy Minister and stated that the Acting Director-General, Mr Frans Moatshe, would deliver the presentation.
He said the Department was in a situation that was making them quite uncomfortable. The number of investigations underway was quite high, and they were mostly corruption cases involving officials inside the Department. Most cases were related to Lepelle Northern Water. The Department had noted a concerning weak board which the Department would be attending to soon. Internally, the ugliest of findings was the 'War-on-Water-Leaks' project. The project was not a bad idea overall, but upon implementing this project it had been done incorrectly from the start. The project had since stopped receiving funding, and had been closed as a standalone project, and had rather been integrated into the work of municipalities in the infrastructure drive. Leaks need to be contextualised as coming from old and aging or dysfunctional infrastructure, and not as a stand-alone project. This project also needed to comply with prescripts internally, but this had not happened, including not adhering to the legal framework. The Minister said he could not understand how such basic procedures could have been missed.
A large portion of external investigations had been undertaken by the Special Investigating Unit (SIU). This had made the Department look like a police station in terms of the number of dockets being investigated. There were a few which were being handled by the South Africa Police Service (SAPS). The investigations were at different levels of completion, and the Department would receive a report at the end of the month as part of SIU's regular updating process, which assists the Department in holding the SIU accountable. More detail on this would be given during the briefing today.
The Department was also troubled by the high level of fruitless and irregular expenditure. The appointment of the Accounting Officer from 3 January and the Chief Financial Officer from the beginning of February would address this major concern of fruitless and irregular expenditure. New appointments would address programme performance and the challenges of accountability in all the projects. This also included analysing what the Department needed to do regarding the bucket toilet system. This would require collaboration with the Department of Human Settlements (DHS). Minister Mchunu would be meeting the Minister of Human Settlements soon because unless the DWS and DHS worked together on strategic issues, nothing would be achieved to address some of the sanitation challenges.
The Minister said issues around Tshwane would feature dominantly in his meeting with the Minister of the DHS. Service delivery had failed in informal settlements or the slums that were called transit communities. These communities had experienced sewage spillages, and water and sanitation challenges.
The DWS would also be working with the Department of Cooperative Governance and Traditional Affairs (CoGTA) to encourage them to tighten governance issues in municipalities so that the DWS could benefit from the side of governance related to sanitation. However, the DWS would not be totally dependent on this collaboration, even though they would like to have maximum cooperation. Where there was slow or no cooperation, DWS would continue to work. CoGTA would be kept informed, especially in municipalities where the DWS had challenges.
DWS presentation
Mr Moatshe said the Department had developed and was currently implementing a turnaround and financial recovery plan. In addition to Departmental interventions, there was focused attention on addressing systematic challenges within the entire value chain in collaboration with implementing agents, which included water boards and municipalities.
The unauthorised expenditure was related to the prior year’s overspending of the main division of the War-on-Leaks Project and the Bucket Eradication Programme (BEP). No unauthorised expenditure had been incurred in the 2021/22 financial year. Fruitless and wasteful expenditure had been incurred mainly because of irrecoverable construction costs incurred in internal and external projects, and excessive management fees on the Lepelle Northern Water Giyani water project. Irregular expenditure was related mainly to prior periods' contractual obligations declared as irregular, whose effect had carried through to the current year. Analysis of irregular expenditure and the nature of transgressions revealed control deficiencies within the procurement processes. Lepelle Northern Water was supposed to have followed normal competitive bidding processes. The SIU had issued a summons on 26 November 2018 in the High Court, Limpopo Division, Polokwane, case number 7209 18. A criminal investigation was also being conducted by the Hawks.
Regarding allegations of corruption in respect of the raising of the Tzaneen Dam wall project, the SIU finding was that there was no emergency/urgency in the appointment of the service provider for the raising of the wall. The investigation was ongoing.
On the System Application and Products (SAP) contract, the Department had not complied with supply chain and budget management prescripts, the provisions of the Public Finance Management Act (PFMA), the State Information Technology Agency (SITA) Act, National Treasury regulations and National Treasury practice notes. Civil litigation was launched in the special tribunal by the SIU, with the DWS as a co-applicant. The SIU was seeking an order to set aside the contract between the DWS and SAP. The matter was being investigated by the Hawks.
The Thukela Goedertrouw Transfer Scheme had the same issues as SAP in terms of compliance. A criminal investigation was being conducted by the Hawks. The Department was implementing consequence management against all officials being investigated for corruption.
The SIU had been directed to investigate the procurement of contracting and the implementation of information technology in respect of four contracts entered into by the Department and EOH. The contracts were awarded between 2012 and 2017. The SIU investigation had been rolled out, and the Department was cooperating with the investigators.
The impact of fraud and corruption on water and sanitation service delivery was most notable in poor communities, where service provision was already at its weakest. Where service delivery needs were great and resources were scarce, fraud and corruption had diverted funds that could have provided services to under-served communities.
The Minister concluded the presentation, stating that the Department took the view going forward that there should be was no need for wasteful expenditure when the Department had good leadership in place, like the newly appointed Accountant and Chief Financial Officer, who would hold people accountable.
Discussion
Draft Committee report on Eastern Cape oversight visit 24-27 January 2022
Mr G Hendricks (Al Jama-ah) commented that he would like to raise two political issues arising from the report. Firstly, Members had driven for over six hours to Port Elizabeth (Gqeberha), but the Mayor and members of the council did not make time to meet with the Chairperson or the Committee. This was disrespectful to the Chairperson and the Committee.
They had also revisited Nooitgedacht, where they had looked at the funds allocated to them. The people of Nooitgedacht said the money had been well-spent and they were proud that they were purifying the water. In Port Elizabeth, the Mayor had issued a notice for people not to drink tap water because it was poisoned. Mr Hendricks said he would like the Minister to find out whether Parliament had been misled by the officials at Nooitgedacht who had said everything was fine. However, on Mr Hendricks’ second visit, he found that people had been told not to drink tap water. He had mentioned that he did not want this report, once submitted, to mislead Parliament that things were good because, in Port Elizabeth and Kariega, things were not great. This had also caused confusion because what was tabled in the report, what the officials on the ground had said, and what was in the media, were all different.
He said he would put his other questions in writing to the Minister.
The Chairperson responded that presenting this report was meant to be done as a collective work of the Committee, and not on an individual basis. Even though Mr Hendricks may have gone back to Nooitgedacht for a political oversight, the contents of the report must address what all Members who were at the oversight had seen and heard.
He added that when the Committee arrived in Port Elizabeth, the difficulty that the Committee had was that they had arrived at a council session where members could not leave the meeting. The Committee had arranged to meet the Mayor in the evening, but the Mayor still could not meet them because the council meeting had run overtime. The Chairperson added that it was not necessarily accurate to say that they had undermined the Chairperson, as he had been in constant communication with the Mayor and council to find a suitable time to meet after the council meeting.
Regarding the water being poisoned, the Chairperson said this had not been mentioned during the Committee’s site visit. After the Committee had left Port Elizabeth, there had been an event.
Lastly, he cautioned Mr Hendricks not to confuse his political visit with the Committee’s visit.
Mr A Tseki (ANC) commented that what Mr Hendricks had tabled must be included in the minutes of this meeting, but not included in the report. The report should reflect only the observations of the Committee as a collective.
Mr L Basson (DA) said he could not attend the oversight visit, but accepted the report as a document that reflected what Members had seen. If he wanted to dispute the report, then he could go on a political oversight visit.
He added that it was unfair to say that the Council had not honoured the Chairperson and Committee Members, as there was a Council meeting and it was quite a turbulent time. He said the Committee accepted the apology of Council that they had an important meeting that they could not get out of.
Ms N Sihlwayi (ANC) commented that the projects the Committee saw in the Eastern Cape were very critical, based on bulk infrastructure development. Some of the projects had fallen by the wayside through financial constraints. She said the Committee had established that the DWS should develop a clear financial model that was supported by National Treasury for projects like this.
Regarding legal battles with construction companies, the Department must do better in managing projects at the construction level, because it loses a significant amount of money due to legal battles.
Lastly, she said the Committee’s proposal for the Ndlambe project, which had been in Phase One for years, was that there should be integration for the communities at this phase and that this should not be reserved for Phase Two. The affected community had been watching other people drinking water and yet they, as the majority, had not been serviced.
Mr Hendricks thanked the Department for a detailed presentation that clearly outlined the challenges and mitigating measures taken by the Department. He also congratulated the Department for being so decisive in its action plan of tackling corruption internally and externally. He asked how it was going to deal with each of the challenges stated in the presentation, such as poor financial management and improper expenditure, as each of them affected the other. He asked if issues such as improper expenditure should not have been picked up by the accounting officers, and why this had continued for so long without being detected when funds had clearly been set aside for specific items and were not meant to be given out outside of the parameters of what they had been mandated for. Who in the value chain should be punished for these transgressions?
He added that the waste of resources was money that went into the hands of those who wanted to enrich themselves at the expense of the communities. His opinion was that the guilty officials should not be shifted to other departments, but should be dismissed with no pay and funds recouped from them. He lastly congratulated the Minister on his commitment to end corruption and stated that he was best suited to lead this operation from the front.
Ms R Mohlala (EFF) agreed with the Minister that there was no need for irregularities when there was good leadership, and she hoped the report for the period ending 2021/22 would show a clean report. She mentioned that irregularities were corruption, no matter what you called them.
She commented that appointments of board members on to water boards had seen several allegations levelled against the former Minister. The current Minister was facing allegations from unions regarding the Amatola Water Board's dismissal and reappointment of certain members. The issue of appointments of board members at Amatola Board was still a challenge to the Department. She asked if there would be an internal investigation done on the appointment of board members to the Amatola Water Board, and how the board was mitigating the risk of corrupt board appointments to ensure that the most qualified people sat on the boards.
She said the State Capture Report, Volume 3, stated that Bosasa or an associated subsidiary company had undertaken water quality audits. She asked the Department to provide more details on these allegations.
She also wanted to know whether the Department owed any money to the SIU for investigations and if so, how much they owed.
Ms Mohlala noted that majority of the cases had been withdrawn or closed or struck off the roll. She agreed with the Department that they needed explanations, and this matter should be taken up with the justice system. She stressed that the justice system in South Africa was very corrupt, and suggested that the Department go back to enquire what had happened with these cases.
She raised concern about people who resigned when they learnt there may be a case against them but had not yet been charged. She asked what action the Department took when they have a strong case against these sorts of people.
Ms G Tseke (ANC) said the Committee had met with the SIU in November, and it had mentioned that the Department was slow in implementing its recommendations. She acknowledged the clear progress made by the Department in this regard, as evidenced in the report. The Department was really trying to implement steps to rebrand itself and mitigate against corruption.
The public viewed the DWS and its officials as being corrupt. The Department needed to speak about its progress and disciplinary measures to the public to regain public confidence.
A hundred officials in salary levels 1 to 12 had been found guilty of corruption. Ms Tseke said this was a scary statistic. She asked whether an in-depth analysis had been done into why these officials were involved in such corruption. She acknowledged the presence of warning letters being sent to those officials, especially the lower-level ones, but asked why officials were not demoted or dismissed. The public could not view politicians as the corrupt ones, they needed to also hear about the gross corruption at the official level in departments. Officials were not linked to the communities -- it was Committee Members who were attached to the Communities. Ms Tseke said the Department needed to talk about these corrupt officials so the community would also know where the challenges were.
She said the investigations should be fast-tracked so that National Treasury could condone some of the amounts that had been highlighted in the report -- for example, the R10bn, as it would keep on hounding the Department.
She appreciated the formation of an internal audit committee that would be able to detect any future corrupt activity and assist the Ministry and the Department to make sure they captured some of the legal activities to support the effectiveness of the Department.
Ms Sihlwayi thanked the Department for finally producing a report of this calibre. She had not realised how fragmented the systems of the departments were from each other. This affected how effectively the Department worked in picking up fraudulent and irrecoverable and irregular issues in the different programmes. Government systems and systems within the Department must be well integrated to work with each other to be able to detect discrepancies early.
She said that when presenting a project, it had a very clear and logical model of how things flow to get to the end result. The role of management should be to focus on broad monitoring and evaluation of this logic model. Management should have periodic performance management. She did not see this important aspect in the recovery plan presented by the Department.
She commented that there seemed to be no consequences for overspending in the Department. She asked whether relevant legislation such as the PFMA was helpful in ensuring service delivery by the Department. Her understanding was that the PFMA clarified the procedures and processes of the value chain until the approval stage. The irregularities in the report pointed to a lack of monitoring and a lack of understanding of this piece of legislation. She asked the Department whether the legislation needed clarification and/or strengthening so people could understand how to implement it.
Her concern was that the impact of fraud on service delivery distanced the people of South Africa from government and undermined service delivery. These issues were haunting Committee Members and affecting how the public perceived and identified them as being corrupt. She welcomed the clarity from the Department, as it had brought about some relief, and urged the Committee to continue monitoring the process of improvement of the Department,
Lastly, she asked the Department to clarify what was meant by the term “condoned billions.”
Ms C Seoposengwe (ANC) commended the report for being detailed and outlining how fraud and corruption had affected service delivery. This report was diagnostic and clearly stated what had gone wrong. The ANC officials were said to be the most corrupt, but when one looked within the Department, one realised that the actual problems stemmed from the lower-level staff. These corrupt lower-level staff were members of the community, and the community saw them with big cars and flashy lifestyles. She suggested that lifestyle audits must go deeper than senior management, and auditing of lower-level staff should start.
She said this report was a disgrace and agreed with the Minister that indeed the Department looked like a police station. It created an impression that the Committee and Department were people without a conscience when people were still drinking water with animals even though a budget had been allocated to eradicate that.
Mr Tseki supported the sentiments of Members.
The Chairperson said that in 2019, when Members joined this Committee, there was something that could not be explained called "War-on-Leaks." The Department at that time had flagged it as a problem because it was irregular expenditure. Upon further engagement with that Department, he had realised that it was irregular expenditure because it was a presidential pronouncement that had not been budgeted for, and a fund needed to be created for it. That was normal practice. However, if such a programme continued to exist, it now had to be budgeted for accordingly. The DG in 2012/13 had the opportunity to budget for the War-on-Leaks as a continuous programme but had not done it because they had deliberately wanted it to be paid irregularly, for whatever reason.
He said the President had been criticised for saying that government did not create jobs but created an enabling environment for jobs to be created by the private sector. The Minister at the time may not have committed corruption, but he could be considered an enabler for the corruption between 2013 and 2019. It was evident in some of the findings there had been overspending in certain projects with no consequences. There was no way the Minister could not have detected corruption in that period from 2013 to 2019. Therefore, the Ministers in that period should be held accountable. To enable corruption, the then Minister had not wanted to appoint permanent DGs and CFOs because they would stop the corruption. Acting staff were at the behest of the person in charge. He was being blunt about this matter because saying that something was chocolate when in fact it was a stone, it could break one's teeth should one bite it one day. Executives were the ones who opened the gate of corruption, lower-level staff entered through that gate and executives closed the gate, so the lower-level staff did not get out. He did not believe that Ministers did not know what was happening under their watch. Consequence management must also be undertaken at the executive level.
The Chairperson continued that there were board members who had been dismissed, and the Minister was being blamed for that. He explained that board members were advisory people to the Minister – appointed and removed at the behest of the Minister. He was disturbed that when these board members were removed, they took the Minister to court, but these same board members did not come complaining to the Committee when they were appointed, saying that they did not want to be appointed.
The corruption in the Department during the 2012 to 2019 period was really a scam. Executives and officials had created a system that would make accountability impossible, and they had no conscience at all. Money was spent, but nothing was built. It did not make sense that someone could waste R10bn and be found not guilty. If it meant people must be dismissed, the Labour Relations Act allowed for such instances when this may be done, such as irreparable damage to a work relationship.
He commented that if after the elections in 2024, some of the Committee Members were not there, he hoped Minister Mchunu would still be Minister. The people of South Africa wanted people who were bold and would make decisions. The Minister may be wrong sometimes, but at least he made decisions. He hoped that the Minister would still be here to continue leading the Department after 2024.
DWS's response
Minister Mchunu said it was a breath of fresh air that Members had emphasised the need for the Department to fight corruption and to do so with a clear realisation that at some point, South Africa’s public sector had become involved in too much corruption. It had become so bad that it was almost normalised in people’s minds as the only way of operating. He said the Department was committed to fighting corruption to the best of its ability while working with the Members of the Portfolio Committee.
Referring to the War-on-Leaks, he said there was a procedure for projects that were an emergency. It was important for an official to be beware when they were outside of the regulations. The War-on-Leaks programme had ceased to be an emergency and according to the audit report, should have become a programme with normal procedures.
The Minister agreed that ministers were enablers of corruption. No executive alone became corrupt. They were corrupt with officials and unionised officials. Sometimes the most vocal unionised officials had colluded with executives in the corruption. Ministers, deputies, mayors and councillors needed to be warned and confronted, because it was an issue to say that he/she was unaware.
The Amatola Water Board would be dealt with during the Department’s visit to Gqeberha. The Minister extended an invitation to two members of the Committee to join that meeting on an oversight basis, and where Members felt strongly, they could ask relevant questions at that meeting. Part of the meeting would be listening to Amatola accounting to the Department on issues of finance, governance, and core operations to implement departmental objectives.
Minister Mchunu said that he heard Dr [Allan] Boesak talking on national television about him. He had said that the Minister was a friend of the President, and therefore questioned the basis of his appointment as Minister of Water and Sanitation after the reshuffle. He had been shocked at such a messy statement being made on national television. It had been irresponsible and reckless, without any semblance of truth in it. Dr Boesak had alleged that he had dropped a criminal case against someone whom the former Minister of Water and Sanitation had been pursuing.
On the matter of resignations, he said that even if an official resigned, if there was criminality, it stopped only when the person died. People were still liable for as long as they were alive. The Minister said he hoped that the estate was held accountable, even at the time of a criminal official’s death. People who were privileged to be called civil servants and then indulged in this extent of criminality, could not escape if it depended on the Department.
Regarding the justice system's delay in executing investigations, Minister Mchunu said the Department did its best to push for them, but the DWS was also at the mercy of the justice system as to when they would execute.
He said corruption had been tolerated by the DWS for a long time. A law had come into effect on unlawful expenditure, and it allowed for an official who was involved in this kind of expenditure to be pursued in their individual capacity. The DWS was committed and prepared to pursue all these cases. Unlawful and irregular expenditure were forms of corruption driven by greed. He emphasised that the Department’s message and mandate on these behavioral matters were clear to the new Accounting Officer.
During the Department’s engagement of the Amatola Water Board, it had made many discoveries that were so severe that they would stress a non-smoker start smoking. For example, when allegations were made against the chairperson of the board, the chairperson had been removed and then brought back as an ordinary member. Upon enquiry into the Department’s preliminary investigations, that chairperson was not supposed to have been appointed because he had been involved in something despicable. The DWS had written him a letter asking why he should not be removed, and he had left the board immediately after that. He added two people had been unprocedurally brought on to the board.
Minister Mchunu said it was their own poor choices that drove officials to engage in corrupt activity. However, was possible that they were part of a network that was managed from above by executives and senior management. These officials were not decision-makers and did not approve anything. They were beneficiaries of corruption
He was personally convinced that corruption could be eliminated because it was conducted by individuals. Once the DWS started taking the first few to task, it would send a strong message to those in the corruption network. Pieces of legislation helped fight corruption, but they required implementation and sharp oversight on side of the Ministry.
He concluded by stating that the DWS must be made accountable by the Committee on behalf of the public. He emphasised the Department also wanted to learn new things from the Committee and make Members proud as the DWS continued to engage with them.
Mr Moatshe said that when it came to poor financial management and accountability, the plan as directed by Minister Mnchunu, was that of zero tolerance to corruption in the Department.
The DWS was working on the challenge of non-performing contractors in its procurement processes.
He asked to be allowed to respond in writing to the matter of Bosasa.
Ms Mohlala asked whether Mr Moatshe did not have an answer or whether he had not heard her properly regarding her question on Bosasa, which could perhaps be the reason why he had requested to respond in writing.
She also pointed out that her question on whether the SIU was owed money had not been answered.
Lastly, she asked the DWS in its response to include what it had planned for the appointment of qualified sector specialists on board water boards and institutions.
Mr Moatshe said the full amount of R1.7m owed to the SIU would be settled this week.
He added that where the Department had not responded to questions, it would do so in writing.
Closing remarks
The Chairperson thanked the Minister and his delegation from the DWS for attending the meeting. He said it was important for Members to raise any other concerns that they felt had not been adequately addressed by the Department. He stressed that the Committee was there to serve the interests of people of the South Africa and not to protect the interests of any political party, so Members should not hold back their questions and comments out of fear of being offensive to any particular party.
The meeting was adjourned.
Audio
Documents
Present
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Mashego, Mr MR
Chairperson
ANC
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Basson, Mr LJ
DA
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Hendricks, Mr MGE
Al Jama-ah
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Mchunu, Mr ES
ANC
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Mohlala, Ms MR
EFF
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Myburgh, Mr NG
DA
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Seoposengwe, Ms C
ANC
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Sihlwayi, Ms NN
ANC
-
Tseke, Ms GK
ANC
-
Tseki, Mr MA
ANC
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