Department to be probed for billions deficit

Parliament’s portfolio committee on water and sanitation will speedily investigate media reports on the Water and Sanitation department’s financial problems, committee chairperson Mlungisi Johnson said yesterday.

“The reports allege that the Water Trading Entity [WTE], related to the department, has an overdraft of about R3.5 billion and is unable to account for about R654 million on its books.

“This, subsequent to the committee’s concern on the persistent media reports, especially in relation to the department’s control of its financial resources appropriated by parliament,” he said.

Water and Sanitation Minister Nomvula Mokonyane and the department had, however, assured the committee over a number of meetings that the financial affairs of the department were in order.

“While the committee has accepted the guarantee given by the department, it will move with speed to investigate the recent media reports. The committee reiterates its stance that taxpayers’ money must be used in a responsible manner as per the laws and financial regulations of this country,” Johnson said.

“Furthermore, the non-payment of services by municipalities and water boards has long been a concern for the committee and encourage the department to swiftly attend to the implementation of debt collection strategies to prevent debt from negatively impacting on the department and its entity from delivering on their mandate,” he said.

Yesterday, City Press newspaper reported that confidential letters from the National Treasury to Mokonyane’s most senior executives, obtained by the paper, revealed that the WTE, a unit within the department tasked with managing water sales and rights, had racked up a R3.5 billion overdraft.

Secondly, the department “appears to have cooked its books to try to explain an amount of R654 million that it can’t account for in its financials,” the newspaper reported.

The letters revealed the WTE’s negative balance could jeopardise the ability of the Trans-Caledon Tunnel Authority (TCTA) to service its Lesotho Highlands Water Project debt; that Treasury would no longer pay the WTE’s invoices until the department settled its R3.5 billion overdraft; and Mokonyane and her officials had plans to remove the WTE from the department and set it up as a stand-alone state-owned enterprise, City Press reported.