Question NW563 to the Minister of Water and Sanitation

Reply:

a) The Department has put in place internal control processes to continuously curb underspending including:

• Increased focus on forecast controls over expenditure commitments for projects in year and over the Medium Term Expenditure Framework to mitigate risks of under expenditure.
• Stringent expenditure controls for sound financial management principles, ensuring that public resources are utilized efficiently; incurred obligations are cleared in a timely manner; and abuse/misappropriation of public money is prevented.
• Collaborative service delivery implementation plans with capacity building initiatives are also being implemented with diverse stakeholders within the water sector including Water Boards, Municipalities, Provincial Governments, Department of Cooperative Governance and Traditional Affairs and National Treasury.
• Regular monitoring of progress and management of areas of underperformance to proactively redirect funds to projects with capacity to absorb additional budgets.
• The Department is implementing the Infrastructure Procurement Strategy and Policies.

b) The following have been identified as root causes of underspending:

• Lack of financial governance skills amongst Water Service Authorities
• Inadequate project management capacity by Implementing Agents resulting in under-expenditure
• Court Judgement issued on 25 February 2022, which prohibited advertising of new bids for goods and services and impacted on capital expenditure for major and mega projects
• Complex public procurement system that contributed to delays in the procurement of goods and services

Implementation of these interventions by the Department has resulted in significant improvements from the last financial year expenditure to the year-to-date expenditure.

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