Amathole Water Board overspends

In its efforts to alleviate the burden of water-supply shortages in its area of operation, the Amathole Water Board incurred millions in irregular expenditure, AuditorGeneral Kimi Makwetu said on Monday.

In its efforts to alleviate the burden of water supply shortages in its area of operation, the Amathole Water Board had incurred millions in irregular expenditure, Auditor-General Kimi Makwetu said on Monday.

Makwetu said the board not only failed to take appropriate steps to collect all its revenue but also failed to prevent R121m in irregular expenditure due to flouting of supply chain management procedures and alleviation of water shortages.

The water board services municipalities in the Amathole and Chris Hani districts of the Eastern Cape, servicing as many as 1.6-million residents in 13 local municipalities.

Makwetu said even though the water board achieved or exceeded the overwhelming majority of its objectives and targets for the 2016-17 financial year, the entity wound up bypassing procurement regulations in the process.

“Effective steps were not taken to prevent fruitless and wasteful expenditure amounting to R254,000 … in contravention of section 51(b)(ii) of the Public Finance Management Act,” said Makwetu.

He said noncompliance with procurement regulations was mainly due to lack of proper review and monitoring of compliance in the entity.

He noted that there were transgressions of supply chain management guidelines.

“The internal policies have not been properly reviewed to ensure that [they are] aligned to the processes of the entity.”

Amathole Water Board chairwoman Ntombokuqala Mnqeta acknowledged challenges, including bad debt, due to poor project management and lack of funding for the expansion of capital projects. She said the board had developed policies to improve project management and stakeholder relations and to manage institutional risk