ATC100413: Report Budget Vote 37: Water Affairs
REPORT OF THE PORTFOLIO COMMITTEE ON WATER AND ENVIRONMENTAL AFFAIRS ON BUDGET VOTE 37: WATER AFFAIRS, DATED 13 APRIL 2010
The Portfolio Committee on Water and Environmental Affairs, having considered the Estimates of National Expenditure 2010: Budget Vote 37: Water Affairs and strategic plan of the sector, for the 2010-2013 financial years, reports as follows:
On 13 April 2010, a meeting of the Portfolio Committee on Water and Environmental Affairs was called to deliberate on the following:
· The appropriations to Budget Vote 37 for the 2010/13 financial years.
· The transfers of monies to entities.
· An overview of programmes, and allocations.
· An overview of key performance areas (priority areas) of the department and its entities.
· Link to government priorities.
The following programmes underpin the work of the department:
· Water management.
· National water resources infrastructure.
· Regional management.
· Water sector regulation.
The monies allocated through the fiscus to support the strategic plan of the department on the actual medium term expenditure framework budget allocation (baseline figures) for the 2010/11 – 2012/13 Main Account (including earmarked funding), reflects the following:
- 2010/11 R7 996 592 billion.
- 2011/12 R9 090 207 billion.
- 2012/13 R9 628 232 billion.
The following challenges were presented as those impacting on the work of the department:
- The department’s need to sustain an unqualified audit in the future compared to previous years. In 2008/09, the department received an unqualified audit, unlike past audits which reflected under spending; emphasis of matter or disclaimers attributed to the financial management of the department.
- The non-integrated financial systems for the Main Account pose a problem and needs to be further improved.
- The sluggish transformation in terms of organisational systems and processes required to support the use of financial recourses to the department need further investigation and interaction with the key role players.
- The relationship between the regional offices and head office requires further engagements.
- The following systems: Statutory Accounting Principles (SAP), LOGIS, etc. requires proper implementation and post- implementation refinements, which should incorporate long-term user requirements.
- Inadequate capacity in relation to a lack of skilled resources.
- The magnitude, spatial distribution and location of the extensive infrastructure assets require auditable assets plans.
Members in their engagement with the presentation asked questions and raised issues of clarity on the following:
- Under spending and rollovers: The reflections for the expenditure outcome as of 30 March 2010 projected an under spending of 2%, which is mainly attributable for transfers of monies to support municipalities. The financial year of municipalities does not coincide with the financial year of the national department and therefore this delayed the processing of the monies in the last financial year.
- Rollovers: These were as a result of late submissions of invoices in respect of services and unfilled vacancies. However, the department will engage with National Treasury and apply for rollover of monies to be spent in the 2010/11 financial year.
- Replacement of donor funding: Due to limited donor funding in the outer years, the department requested an amount of 200 000 million for projects that cannot be dissolved. These in the main, comprise projects on gender, youth and water as well as support to local government.
- Additional funding from National Treasury: The department requested R3.1 million in additional funding for the 2010/11 financial year, but received R225.332 million. The department will still engage the national treasury and draft funding proposals to substantiate the need for additional funds. Although the department was denied additional funding for projects, it is in the process of accommodating that within the DoRA allocations and in August/September 2010, there is space to engage further with National Treasury in relation to the efficacy of the spending trends of the department.
- Relationship between the business plans and spending trends in relation to procurement: Procurement should not be undertaken randomly, but business plans must substantively reflect the procurement in advance for the required activity.
- The establishment of the monitoring and evaluation unit and its synergy with other regulatory units in the department: R5 million was allocated for the establishment of this unit to oversee the work of the ‘blue scorpions’.
- Budget for the 2010/2011 for regional and national water resources management for new infrastructure allocations as well as maintenance of existing infrastructure: In relation to regional bulk infrastructure, the amount allocated is R4 329 013 million. New infrastructure has to be built. The funding for maintenance of infrastructure is insufficient and additional funds were requested from National Treasury.
The department provided the following solutions to some challenges in relation to the financial management, and this incorporated the following:
· A need existed to employ budget controllers to monitor monthly spending by programme managers.
· Vacant posts should be kept at no more than 5% of the establishment.
· Implementation of the integrated management system with the help of national treasury.
· Formulation and implementation of clear assets management plans.
· Solution in linking all procurement to business plan during approvals.
The committee acknowledges that institutional changes are in progress within the two departments (water and environment), and whilst an overview was provided, the committee would require further briefings on the following:
- The impacts of the global economic recession on water management functions, and the approach of the department to this aspect of their work.
- Quarterly briefings on expenditure outcomes in line with performance outcomes reflected in the strategic plan.
- Impact, implications and oversight of parliament over regulations in the water sector.
- The nexus between the water and environmental sectors and collaborative projects between the two departments.
- Intergovernmental collaboration on water issues between national, provincial and local spheres of government: The managing, monitoring, regulating and compliance between national, provincial and local departments on water issues.
- Review and costing of legislation.
- Climate change.
- The interconnectedness of departmental work and the move toward inter-sectoral programmes and projects.
- The state of waste water treatment plants in South Africa in light of the findings of the Green Drop Report.
- The full enforcement of the National Water Act, No 36 of 1998, including mechanisms required to make more regular use of criminal prosecutions against illegal actions by water users.
Report to be considered.
 LOGIS is a provisioning, procurement and stock-control system which is highly adaptable to the requirements of any department. The structure or primary components of the system enable it to be implemented in any store or depot situation.
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