Department of Water and Sanitation says its probe found expenditure was not irregular

The Department of Water and Sanitation told Parliament’s standing committee on public accounts (Scopa) that its investigations into irregular expenditure that the department incurred in the 2016-17 financial year found that the audit opinion was unfounded, so there was no basis for the expenditure to be declared irregular.

The department told the committee that R2.9m worth of spending by the department was vindicated by its investigation. Auditor-General Kimi Makwetu found that the department appointed a service provider in two cases without following supply chain management processes.

However, the department also gave a rundown of eight investigations with a total irregular expenditure of R11m where the auditor-general’s findings were confirmed. These were contracts where the winning bidders were not among those requested to provide quotations.

Preferential point systems and broad-based black economic empowerment standards were not applied to these contracts when quotations were awarded, the department admits. On Monday evening President Cyril Ramaphosa shuffled Nomvula Mokonyane over to communications and replaced her with Gugile Nkwinti.

Water and sanitation acting director-general Sifiso Mkhize told the committee that the department had R2.1m irregular expenditure relating to transactions in the financial year prior to 2016-17 while R1.6bn of the irregular expenditure accounted for payments made in 2015-16, which were declared irregular in the following year.

"Of R1.6bn irregular expenditure reported, R2.1m relates to prior year contracts, which were declared irregular, but the payments in question were effected in 2016-17 financial year," said Mkhize.

He said new incidents relating to the 2016-17 financial year amounting to R224m included the Richards Bay Desalination plant for R213m, the Almost Empty Campaign, which cost R10m, and the high salary scale of the director-general office of R58,782.90.

Scopa announced a full parliamentary inquiry into the Water and Sanitation Department in light of the fact that it was the worst transgressor of any department in the government when it came to errant expenditure.

Scopa chairman Themba Godi said the committee was concerned that ordinary South Africans affected by the instability and financial mismanagement in this department, because SA is a water-stressed country.

"In reality, Minister Nomvula Mokonyane has left a department that has completely collapsed. It is worrying that she is now a minister of communications at a time when the SABC is recovering," said Godi.

The Western Cape provincial government welcomed Scopa’s announcement, saying financial mismanagement at the national department had a severe effect on water security and the delivery of bulk water infrastructure in the Western Cape and elsewhere in the country.

"Although bulk water supply is its mandate, the department has not made funding available for augmentation in this crisis, because the National Treasury has literally turned off their funding tap following a disastrous audit outcome," said Western Cape premier Helen Zille in a statement.