DWS Portfolio Audit Outcomes; DMPE assessment of DWS and entities performance

Video The Committee convened to receive a briefing from the Auditor-General of South Africa (henceforth: institution, AG AGSA) on the audit outcomes for the Water and Sanitation portfolio, and to receive a briefing from the Department of Planning, Monitoring and Evaluation (DPME) on its assessment of the Water and Sanitation portfolio The AGSA told the Committee that the Department has been spending less on its allocated budget for the bucket eradication programme since it was incepted. It indicated the delays in replacing existing bucket sanitation in formal settlements were denying affected citizens of their constitutional rights. The AGSA reported that, from 2020/2021 to 2022/2023, the Department has spent less than 10% of its allocated budget and none of the bucket eradication programme projects in the Free State and Northern Cape have been completed to date. The Department has been targeting to replace 10 798 existing bucket sanitation backlog systems in formal settlements since 2020/2021, but this target has never been met since 2019/2020. It has only managed to complete only 1 284 projects. The report of the AGSA stated key targets of the Department and Water Trading Entity were not met. The root causes for non-achievement of these indicators primarily relate to poor project planning, inadequate project management, and inadequate coordination amongst relevant role players. The AG recommended the leadership must conduct a full root cause analysis of the drivers of project management challenges and those must be adequately addressed through an appropriate action plan. There must be effective coordination between the Department and all water service authorities. The AGSA stated a significant number of projects were delayed due to delays in the appointments of contractors and professional service providers, late/non-payments to contractors, procurement delays, legal disputes with contractors, community unrest, shortage of skills (e.g. insufficient number of approved professional persons) and a lack of maintenance contracts. While these projects are delayed, unavoidable costs continue would be incurred by the entity, and some would result in fruitless and wasteful expenditure. Delayed projects have resulted in delayed delivery of water to the water users. Delays in obtaining environmental authorisation (EA) and finalising agreements with water users were contributors to the challenges. The value of significantly delayed projects disclosed in the financial statement amounted to R2.995 billion in the 2023/2024 financial year. Further, the AG reported there had been an overall increase of R257 million in irregular expenditure incurred in the current year. Consequence management procedures were not adequately implemented, as investigations were not started in a timely manner. There has been an overall increase of R29.7 million in fruitless and wasteful expenditure incurred in the current year. The previous procurement policy was inadequate for procuring infrastructure-related goods and services, which resulted in protracted procurement processes. The AG stated that the Committee should continue to monitor the progress of the medium-term strategic framework targets not yet achieved and ensure adequate plans are in place to fast-track the performance of the Department and its entities. The Committee should ensure the executive authorities insist on timely and credible reporting and accountability and should play an oversight role effectively and with greater impact. The Department of Planning, Monitoring and Evaluation reported that, during the last 30 years, municipalities supplied water to just over nine million consumer units in 2006, expanding to 15.93 million in 2021. This represented an average annual growth rate of 3.2%. Tap water inside dwellings, off-site or on-site, was most common among households in the Western Cape (99.3%), Gauteng (98.3%), and Free State (94.1%) and least common in Limpopo (69.1%) and Eastern Cape (69.8%). The percentage of households that gained access to improved sanitation between 2002 and 2022 increased by 21.5%. In 2022, 83.2% of households had access to improved sanitation services. The access of households to improved sanitation was highest in the Western Cape (95.9%), Gauteng (90.5%) and Eastern Cape (90.0%), and most limited in Limpopo (63.1%) and Mpumalanga (63.8%). Installing pit toilets with ventilation pipes was important in achieving large improvements. On interventions to address these challenges, the DPME stated that Water and Sanitation needed to accelerate institutional realignment through rationalisation of water boards into Regional Utilities as options to unlock expansion of services; and must ensure the National Sanitation Framework is submitted to Cabinet for approval to strengthen monitoring and compliance to the standard to improve sanitation services. The DPME recommended that Water and Sanitation should invest in infrastructure development; simplify the regulations on public-private partnerships to enable greater investment in both social and economic infrastructure development; and maintain public infrastructure through dedicated programmes and establish systems to support the initiatives. Members then wanted to understand how the AGSA was going to address the matter of two targets not achieved by the Department. They asked what effective mechanisms or legislation the AGSA recommended to enforce its recommendations. They also wanted to know what would happen if fruitless and wasteful expenditure were not addressed; wanted to understand the point at which the AG would have asked the Trans-Caledon Tunnel Authority about the feasibility of its projects to avoid delays in the completion of projects; wanted to know what would happen if fruitless and wasteful expenditure were not; and wanted to know how the AG could not recommend drastic recommendations on the failures of the Department that have persisted over the years with no improvements, ranging from deterioration of water quality, poor project management, lack of consequence management, water crises, to lack of service delivery. The Committee remarked that the DPME presentation was not a true reflection of what was happening on the ground regarding households with no access to piped water, especially in rural areas where infrastructure has been delayed. Members wanted to know how poor governance challenges in water boards would be corrected; asked how the DPME was explaining the discrepancy between the allocated budget and conditions on the ground; and why the DPME on water licences allowed non-compliance on water regulations.