Department of water fails acid test of finances
The troubled department of water & sanitation has received yet another qualified audit opinion, amid a water crisis in some of SA’s provinces.
The department, which has a budget of R15.5bn for the 2018/2019 financial year, tabled its annual report in parliament last week. It showed that little improvement had been made in its financial management.
In the department’s annual report, auditor-general Kimi Makwetu pointed out that the Water Trading Entity had incurred fruitless and wasteful expenditure of over R1bn and irregular expenditure amounting to R4.9bn for the year ended March 2018. It incurred an overdraft of R1.4bn, down from R2.1bn in the previous year.
“As stated in … the accounting policies, these events or conditions, along with other matters … indicate that a material uncertainty exists that may cast significant doubt on the entity’s ability to continue as a going concern,” said Makwetu.
Effective steps were not taken to prevent irregular expenditure, as well as fruitless and wasteful expenditure, he said. “Public money was spent without the approval of the properly delegated officer as required by Treasury regulations … In some instances, disciplinary hearings were not held for confirmed cases of financial misconduct committed by officials, as required by Treasury regulations,” said Makwetu.
The crisis has largely been attributed to poor leadership, deviations over the years, including duplicate payments, spending on projects that were not budgeted for, and payments for incomplete projects.
The department was led by Nomvula Mokonyane, who was shifted to the communications portfolio in the 2018 cabinet reshuffle.
Furthermore, said Makwetu, there was leadership instability at top management level, as a result of vacancies and/or suspensions of the director general, CFO and other senior leaders for
EFFECTIVE STEPS WERE NOT TAKEN TO PREVENT IRREGULAR … [AND] WASTEFUL … EXPENDITURE
extended periods during the year under review.
In the annual report, Deborah Mochotlhi, the acting directorgeneral, said various operations were hampered due to insufficient budget allocation.
“The year ended on a difficult note of budgetary constraints and various challenges.
“However, the personnel of the department remain committed to the course of striving for accessibility of water and sanitation by all,” said Mochotlhi.
In May, water & sanitation minister Gugile Nkwinti said his department was struggling to deal with the realities of budget constraints and challenges from previous years, as some historical commitments were not adequately budgeted for.