DWS progress report on financial turnaround strategy; Cholera in Hammanskraal; with Deputy Ministers

Water and Sanitation

23 May 2023
Chairperson: Mr R Mashego (ANC)
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Meeting Summary

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The Portfolio Committee convened virtually for a presentation by the Department of Water and Sanitation on their progress in implementing the remedial actions as detailed in the Departmental turnaround strategy.

The meeting started with observing a moment of silence to mark the passing of the 15 people who had succumbed to cholera in Hammanskraal. The Members were later briefed by the Deputy Minister on the latest developments, and agreed to accept an invitation for the Committee to undertake an on-site visit to the area on 24 May.

The Department acknowledged its serious financial challenges, but said it was making progress with its turnaround plan. The governance of the organisation had been stabilised through appointments at the senior level, systems had been tightened, and audit outcomes would improve. Its progress report also indicated improvements in service delivery, performance and discipline, supply chain and financial management, and a reduction in unfunded commitments and improper expenditure.

Members were highly critical of the R16 billion in irregular expenditure reflected in the Department's financial statements, and described the involvement of state employees in improper financial conduct as "political sabotage." The Department responded that investigations into these cases were proceeding well, and that it was committed to firm consequence management.

 

Meeting report

Opening remarks

The Chairperson said the Committee faced a very big challenge in Hammanskraal, where the incidence of cholera was high. There were also one or two people found with cholera in Limpopo, as people had visited Hammanskraal. Unfortunately, 15 people died in Hammanskraal. Most of the blame was placed on water and sanitation, and the fact of the matter was that the water in Tshwane was not acceptable. A debate between the Portfolio Committee and Tshwane to determine what was being done would be considered. He asked Members to observe a moment of silence in remembrance and respect for the 15 families that had lost their family members in Tshwane.

Deputy Minister Mahlobo had been asked to be slotted in at the end of the meeting, to take the Committee through what it needed to be prepared for, because he had gone to Hammanskraal on behalf of the Portfolio Committee. The Chairperson said that he had committed on TV that the Portfolio Committee must go to Hammanskraal, and they were expected to give comments. The Committee could not give comments based on hearsay, which was why it was committed to visiting Hammanskraal on 24 May. This was short notice, and those who could attend should do so. The residents had been a bit aggressive, refusing to allow the Mayor to visit the area, and this must not be appreciated and seen as a good thing, when the government was not allowed to talk to its people. This might happen to the Portfolio Committee when they arrive, but they would visit the area and see what happens as they could not run away from their people when they needed them.

Deputy Minister’s Remarks

Deputy Minister David Mahlobo said the Minister and the Director-General had apologised for not joining the meeting. The Minister was in Lesotho on an engagement. The matter of taking the Portfolio Committee through the Hammanskraal situation had been communicated late, but something had been prepared so that when the Committee visits Hammanskraal, they would be in a better position regarding oversight and leadership.

Deputy Minister Mahlobo said the leadership of the Department, and the Director Generals were present at the meeting to account. The Chairperson had expressed concern about the liquidity of the Department and the way their issues were handled, and there was an agreement that there must be a financial turnaround plan for the Department. At a particular point, some challenges made it difficult for the Committee, as the legislature, to support a budget for a department like the Department of Water and Sanitation (DWS), which was insolvent in the eyes of the public.

At the centre of the turnaround plan was the stabilisation of governance. There were too many people in acting positions, but the Department now had a permanent Chief Financial Officer (CFO). At the same time, the plan included tightening of the systems in the Department and improving the audit outcomes. A lot of progress had been made, though some challenges remained. There were issues of irregular expenditure, malfeasance, and corruption, and for these matters to be condoned, one of the prerequisites was to act decisively on matters of consequence management. Decisive action had taken on irregular expenditure, including implementing some of the reports by law enforcement agencies, especially the Special Investigating Unit (SIU). The good news was the recovery of some of the contractual defaults, especially in the information technology (IT) space, with money coming back, which was highly needed considering the water situation in the country. At the same time, there had been high levels of under-spending, but there had been progress, although more was needed. The Department was on the right track, with the support of the Portfolio Committee.

Departmental financial turnaround strategy presentation.

Mr Frans Moatshe, Chief Financial Officer, DWS, said a financial recovery plan had been developed for the Department which focused on how service delivery would be improved, dealing with performance and discipline issues, consequence management in the Department, stabilising it but also addressing and capacitation. Supply chain management (SCM) and financial management were focal points of the turnaround plans. The stabilisation of the Department included bringing a culture of ethical behaviour into the organisation, with staff training and development to ensure that capable officials managed the organisation.

The Department was previously considered bankrupt due to unfunded commitments, accruals and payables, which led it carrying bank overdrafts. The DWS owed service providers and contractors more money than was available, and operated on bank overdrafts. It was in a very poor financial position, with negative audit outcomes, and there were cases of improper expenditure which contributed largely to the situation that the Department faced. This had to the implementation of the turnaround plan. The DWS had been working with National Treasury and the water boards to look at a sectoral approach.

Referring to prior years' financial and compliance challenges, he quoted from the original report covering the 2017/18 financial year. Both the Main Account (Vote) and the Water Trading Entity (WTE) had been issued with qualified audit opinions and had reported overdrafts. The Main Account had unauthorised expenditure of R933 million, and accruals and payables to the value of R2 billion.


The WTE had incurred a deficit of R573 million during the year, and had incurred an overdraft of R1.412 billion at this stage. This created uncertainty about the entity’s ability to continue.

Financial recovery plan overview

Guided by the Portfolio Committee, the Department’s executive authority had worked together with National Treasury, and a financial recovery plan had been developed. The plan covered funding and budget management issues. Internal and external audit action plans were developed. The overdraft over the years and the recent past had been positive. There had been implementation of a debt collection and revenue enhancement strategy and implementation of an accruals and payables management plan that had been created to ensure that there were no unfunded commitments in the Department and the WTE. It had to be ensured that the work done was properly planned and there was clear alignment between the Department's strategies, the annual performance plans, procurement plans and project implementation plans.

The Department provided a summary of unauthorised, irregular, fruitless and wasteful expenditure.

This indicated that for the main account, unauthorised expenditure in 2022/23 amounted to R641 million, fruitless and wasteful expenditure had been R16.6 million, and irregular expenditure had been R9.5 billion. For the WTE, fruitless and wasteful expenditure had been R241 million, and irregular expenditure had been R6.7 billion. The reported unauthorised, irregular, fruitless and wasteful expenditure incidents were at various processing stages, including investigations by the Department, the SIU and South African Police Service (SAPS), with disciplinary and court proceedings. The DWS had appointed contract workers and a panel of professional service providers (PSPs) to augment the current investigation capacity of the internal audit unit. By 31 March 2024, the cases on the register should have been concluded.

The fruitless and wasteful expenditure figures were preliminary. They were being finalised to ensure that by the time the Department went to account to Parliament on the fourth quarter performance, they would be ready for submission to the Auditor General. Investigations were being accelerated to enable finalisation before the end of the 2023/24 financial year.

The irregular expenditure amounts recorded were high, with a total of R16.209 billion recorded from previous financial years. There had been a submission to National Treasury to request condonation. National Treasury had subsequently outlined the specific requirements for them to consider the condonation. Irregular expenditures had been referred back to the Department to finalise compliance requirements and other legal processes.

These cases were submitted previously to National Treasury, and feedback had been received on them:

Giyani Water Services project;
Upgrading of the Thukela Goedertrouw Scheme
Support and maintenance of SAP ECC6;
War on Leaks project;
Bucket Eradication Project (BEP);
Financial advisory services;
Desalination plant at Richards Bay.

Some unauthorised and irregular expenditure cases were with National Treasury and in the process of condonation. The cases that would receive feedback at the close of the financial year were the Bucket Eradication Programme and War on Leaks, transfer payments and water board investigations.

Analysis of all the irregular expenditure cases incurred in the prior years and the nature of transgressions revealed control deficiencies within the procurement processes. These were historic reasons that the Department had identified, and the reason for going through this had been to identify the root causes and develop appropriate policies and procedures that would help avoid a recurrence. SCM policies and standard operating procedures (SOPs) have been updated and communicated to staff, with continuous monitoring and support of the implementation processes.

There had been work done on irregular expenditure since the preceding financial years until now, and condonation had been obtained to the value of R2.2 billion. This indicated that although there were challenges, there had been progress. With all the cases, National Treasury had requirements that needed to be fulfilled before the approval of condonation.

Strengthening credit control in the water sector
There had been engagements with the Portfolio Committee on the measures put in place to strengthen credit control. The DWS would ensure that standardised credit control and debt recovery processes would be put in place across all the water boards. This would include consistent enforcement of water limitations/restrictions on non-paying municipalities and legal processes to attach municipal bank accounts where necessary.

Infrastructure grant challenges

There were challenges in providing sustainable water and sanitation infrastructure between different spheres of government. These included:

Slow project implementation by contractors, and lack of monitoring by implementing agents due to capacity challenges;
Slow implementation of BEP projects due to prevailing conditions on site, such as high water tables, and lack of pre-existing designs when the DWS took over the project;
Continuous community unrest at different project sites where community members demand employment;
Delays by municipalities to appoint contractors due to their supply chain and appointment processes; and
Poor performance of contractors, which leads to termination of those contracts, resulting in the re-appointment of new contractors, thereby delaying the completion of projects.

The Department's mitigation plans had been to establish and was capacitate the Water Services Branch with engineers and project managers, to increase visibility on all projects across the country. There were also continuous active participation and engagement programmes with local communities where the Department implemented projects. A revised acceleration plan for BEP in the Free State had been developed and would be completed within the 2023/24 financial year.

The Department was determined to achieve sustainable development goal (SDG) 6 for the provision of sustainable water and sanitation infrastructure between the different spheres of government by 2030 through the integrated approach between the three spheres of government, by improving its project implementation approach.

Mr Moatshe concluded that the trend analysis of improper expenditure reflected a decline in irregular, fruitless and wasteful expenditure incidents. There had been no new incidents of unauthorised expenditure. Stringent cash and banking management controls were being implemented, including liability management (commitments, accruals and payables). Progress has been made on disciplinary and investigation matters, including continued engagement with various law enforcement agencies. The Department was collaborating with the SIU for all the SIU's investigations into old unauthorised and irregular expenditures. In some cases, this resulted in the Department recovering substantial amounts of money.

(See attached report for details)

Discussion

Ms R Mohlala (EFF) said when the presentation started, the Deputy Minister had said the DWS was in a rented building. When would the Department construct its own building? How much did it cost to lease buildings?

The Chairperson said these questions were not part of the presentation and should not be asked on this platform. Only questions related to the presentation should be raised.

Ms Mohlala said she was a bit concerned about the advisory panel, where the Department had reported that someone who had been involved in corruption in the DWS, was now working at the Treasury Department in Gauteng. If someone was involved in corruption and misappropriation of funds, that raised serious ethical and legal concerns. The public sector had a code of conduct and regulations that governed the hiring and retention of employees, especially when it came to issues of corruption. Could the Department go through what was happening in this regard? Could they also assist with the charges transferred to the Gauteng provincial treasury by Section 16b of the Public Service Act regarding the employee’s case?

The desalination plant case in Richards Bay was long overdue. It was reported today that one case had been completed, and more evidence was still being gathered for the other case. Could the Department intervene here and acknowledge the principle of justice delayed was justice denied? The more there was a delay, justice would be denied to those affected, because so much money was abused.

Although the presentation showed a financial turnaround strategy based on historical debts, there was no reference to governance challenges resulting in the financial challenges. The DWS always provided a literal interpretation of its work, and there was no correlation between how and why there was a governance effect across the value chain. What were the key governance challenges that affected the water and sanitation services provision in South Africa? How had corruption and mismanagement impacted the water and sanitation sector? What were the key institutional and regulatory constraints affecting the delivery of water and sanitation services? How had political factors affected implementation of policies and programmes to improve the water and sanitation sector? How did issues of accountability and transparency affect the governance of the water and sanitation sector? What were the challenges facing local and provincial governments regarding providing water and sanitation services?

Since the Portfolio Committee started in 2019, it has urged that these issues should be addressed, but condonation was still happening. Was it still dealing with historical debt? At each quarterly report, the condonation of money was presented. Condonation of money was corruption, because the money came from the taxpayers. Could the Department clarify what was happening with the condonation, because the presentation did not clarify it thoroughly? When was this going to end, because people were corrupt, and money was taken from the National Treasury to condone stealing?

Ms N Sihlwayi (ANC) said that the presentation was not explicit, as it did not explain properly. It just hinted at a few things, rather than giving the details on who had done what. The danger of the Portfolio Committee being involved in such a process was that the media was going to pick up this report and be explicit in addressing issues that had not been revealed to the Portfolio Committee, and that was a problem. The Chairperson had been on TV, and he could be called out on this report and be asked about the contractors' and officials' actions, and he would not know about them. There could be a closed process to take the Portfolio Committee through the uncomfortable issues to be raised in public. A panel of professionals had been appointed to augment the investigations being done. What did that mean? What had they done?

She said that when this Department was formed, they had been like "street kids." Parliament did not want to listen to them as a Department, and were stopped from presenting a budget. The Department was still new, and now it could be stronger with the report it had received from the Deputy Minister, the Minister and the Director General.

The financial advisor who had done some wrong things in the DWS had been transferred to the Treasury. What did that mean, because this was a financially delinquent person and a liability, and he had been transferred to another department? Could this be clarified? This was just like municipal managers who were doing the wrong things in the municipalities and were employed at other municipalities, or national or provincial departments.

Could there be clarity on the issue of desalination? On page 17 of the report, unethical conduct was disclosed. There could not be such action, where the official behaved the way he did and there were no consequences.

Ms Sihlwayi said there was something the DWS was not explicit about in the turnaround strategy. It did not seem to have data management in the Department. A systemised system should be developed to execute and supervise the plans, policies, programmes and practices of the Department. There should be a closed area which monitors the data management, supervises the plans and policies, and knows the programmes of the Department in terms of what was to come in the month, because people could not be chased physically without a systematised system. An integrated monitoring strategy was needed for the Department to prevent what had happened from recurring. There were drips and drops on how the Department wanted to do it, but there was no government system that could be departmentalised centrally to monitor overall and ensure corrective measures to stabilise problems that had happened in the Department.

Mr A Tseki (ANC) said that in the disciplinary hearing that was being reviewed, the Portfolio Committee needed to be told what was being reviewed, because when a worker was taken to a disciplinary hearing, there was an understanding that the case would be won. If a weak case was presented, it would no longer be the employee's case, and the representative of the employer would be delinquent and must be taken to task for bad representation. The review of cases had not always been in line with good employment relations. Even the person representing the employer should be taken to task during the review. The contents of the reviews may not normally be detailed.

Could the page in the presentation giving the summary of unauthorised, irregular and wasteful expenditure, be repeated? That page told everything that had been presented because, from there, it was specific to every case. There was an area where it said this needed a parliamentary process, and the Portfolio Committee could take this on and prioritise it. The Portfolio Committee, as Members of Parliament, could take it as their responsibility and lead as long as they knew what they were leading. It showed that the Department’s challenges were so huge that they could not be completed in this administration, meaning they would be transferred to the next administration. Was there confidence that those that would be coming in, if it was not the current team, would continue the work that had been done currently?

The Chairperson said that they must appreciate the turnaround so far. From 2019 till now, there has been big progress. With all the challenges that they had, the Department should be thanked for putting the agreement of wanting to change things into practice.

He said there must come a time to conclude that the Department's financial challenges were not about employer-employee relationships or an employee's misconduct -- it was a political sabotage and a political crime. The paragraph Mr Tseki had been talking about was exactly what must inform one to conclude that this Department in 2019 was in cahoots and in collusion in defrauding and sabotaging government and itself. What was happening was that with an R1 million budget, there was an expenditure of R4 million -- where did the R3 million come from? It was spending beyond the budget. When it was time to report to the seniors about the budget and expectations, the overspending would not be reported, and the scope of work was changed for it to allow this. This had been done departmentally, from 2016 to 2017. It was done with impunity, and no one had acted against anyone. One of the reports the Committee Chairperson had given was that those who had allowed these things to happen must answer consequences. Even the executive could not see that there were wrongs for five years. This Department was not doing well for the South African people for five years, and executives were involved. The chief executive officer (CEO), chief financial officer (CFO) and Director-Generals (DGs) were appointed deliberately for them to allow this malfeasance to happen. The Ministry of 2019 till the present must conclude that the charges were no longer employer-employee relations -- they were mutiny and sabotage. There could not be a misuse of R9 billion when the budget did not allow spending that particular amount, and for this to be charged as an employer-employee relationship. There should be stronger-worded charges, rather than employer-employee relationships.

The Chairperson said it was unfortunate that when these issues were raised, it was taken as if they were representing the workers, because some of the Members were involved in labour relations matters. In reality, when a weak case was presented, responsibility had to be taken, because an agreement had been signed that the outcome of a disciplinary hearing must bind the two parties unless there were things that were not palatable in the employer-employee relationship. In the recovery plan, for example, eKurhuleni owed R8 billion and had made arrangements to pay back R4 billion, and they had not paid that particular amount. eThekwini had a R289 million debt and committed, but did not pay the money. Then there was a debt of R25.9 billion, but the bill for R14.8 billion had recovered only R13.9 billion. Why bill less and recover even less? There had been no consequence management to deal with those issues. Fortunately, R14.3 billion had been brought back into the system in terms of the arrangements, but the debt was R25 billion -- when was it going to be recovered? The Minister had decided to appoint debt collectors, but how were they going to be paid? Would they be given the amount agreed on as payment, even if they did not collect the amount meant to be collected, or would they be paid proportionately, based on the recovery?

The approach needed to be changed so that the behaviour of the DWS officials was no longer misconduct of employees -- the political sabotage of people who sat and planned to rob the state. The charges must change to something different. For instance, disciplinary hearings were heard by the senior managers who were part of the process, and they would misrepresent and lose their cases. Members had raised issues -- could they get responses from the Department?

Mr G Hendricks (Al Jama-ah) said it was time for the Minister and Deputy Minister to take an AK-47 and start shooting, because this was a war and the Minister was the Commander in Chief as far as the Department of Water and Sanitation was concerned.

DWS's responses

Mr Mahlobo said that he would first allow the officials to respond to some of the issues raised, and ultimately he and Deputy Minister Tshabalala would conclude. The CFO would then assign other members, like the Deputy Director-General (DDG), to respond to other issues raised.

Mr Masimela [name not confirmed] said that he would respond to the questions raised by Mr Mohlala, then hand over to DDG Mathe on local challenges around water and services. Mr Conrad Greve would respond on labour-related matters, including the disciplinary hearings review.

He said the advisory panel was a service provider appointed without following a normal procurement process, so action taken had been taken against all those officials who were employees of the Department. One of the officials to whom Mr Mohlala had referred, who got a new job at the other department, had also been among those implicated in the investigation report. The issue was that the transgression was twofold. The first part had to do with not following Department procurement processes, and there were also challenges around the value of work that the service provider had performed. It was not commensurate with the amount claimed, which was R60 million, and there were still court processes. Over R60 million worth of invoices had been submitted, and the others were in retention -- they had not been paid. Action had been taken against all the implicated officials, even those that had left the Department, and there was a process involving the SAPS.

The desalination plant case had to do with an emergency procurement that had been approved at that stage by the accounting officer. However, when it came back from National Treasury, there was a comment that other quotations could have been obtained to help the Department to get value out of the procurement. The officials indicated in the report were those the human resources (HR) department was set to speak to.

On the governance challenges across the value chain, there were instabilities reported by the Department and around the water boards. Some municipalities were unstable, and this affected the Department's work. If a municipality was appointed during the financial year, there were challenges where there were no people capable, like a CFO or municipal manager, of running the institution. This affected decision-making and the implementation of the programmes of the Department.

Mr Masimela said that the process of condonation was one where the relevant authority acknowledges and pardons irregular expenditure. The process required the Department to investigate the root cause, act against the responsible official and assess if losses were incurred, and if so, a recovery process needed to be activated from those individuals, companies, or the pensions of officials. This was a long process, and was linked to the question around the investigations and why they were taking so long. The irregular expenditure had to be subjected to all the formal processes so that capable officials or resources could investigate and analyse the particulars of the irregular expenditure. They could also confirm the effects of the transaction, which would then help if there were any allegations of criminal conduct. For example, there would be evidence to present to the institutions responsible for those investigations. There was a unit of certified forensic investigators in the Department for the service providers to augment their capacity, but they were not meant to deal with the volume the Chairperson had referred to. The Department was trying to bring additional resources to add those forensic investigators to expedite the processes. Some transactions had been analysed and could be concluded through other officials within the internal control, but the complex ones had very serious implications of fraud, so they were assigned to the specialists that were assisting.

On data management supply, there were some systems in the Department and there was a request put together through the State Information Technology Agency (SITA), to deal with integrating and bringing together systems to one platform. A business case has been done and should be finalised in the current financial year. There were currently different platforms, and some were manual. Last week there was a sign-off on some of the confirmations around the budget and the business case as it was submitted to SITA.
 
The involvement of Parliament regarding the unauthorised expenditure was going through the Standing Committee on Public Accounts (SCOPA). National Treasury had indicated that the submission was with SCOPA, and they would be making the normal process recommendation to either approve or not approve.

In the debt recovery processes, the recovery was more or less the same as the current billing. That was why there were these processes of debt collectors, because there was a wide range of debtors. The commission that was being paid and the agreements that Treasury had signed with the debt collectors were based on the amount recovered. This was stipulated on the contract signed by the service provider, National Treasury and Department.

Mr Risimati Mathye, DDG: Services Management, DWS, said he wanted to address a few issues Ms Mohlala had raised. The CFO had touched on the issue of governance, which cuts across the sector where there were issues at the local government level, and it was well documented how municipalities were battling. The Department had recently developed a system to intervene and support these municipalities. Ms Mohlala had described the challenges that the Department was facing, whether it be enforcement and compliance, or the implementation of the projects. The results showed without a doubt that there were serious capacity problems in the municipalities, even when they were given specific directives to comply with whatever notice. The accountability issue raised that affected water provision (slide 30 of the presentation) showed integrated roles and functions across the three spheres of government, and indicated the roles of the national government and the water boards, and the level at which municipalities also had to play a role. It clearly showed that the issue of water provision rested not only with the national government, but cut across the three spheres of government, specifically when looking at the water value chain. The Department was at a level where they needed to step closer to municipalities and provide some interventions and support through the water boards to some municipalities.

The DWS also used its skills and capacity to assist municipalities because the structural collapse in terms of efficiency on the ground was clear. Comments had been made on the impact of local government processes in dealing with water services provision across the country. The Department was aware of the challenges facing the implementation of the projects. Part of this was the internal supply chain processes, some of which could involve the slow implementation of projects by the appointed contractors, so the focus was now on how the Department was going to assist municipalities. One issue that the CFO had emphasised was how the water services branch was getting project managers and engineers to close the local government gap where water provision and projects were not implemented properly.

There had been prior challenges which were well documented. There was a revised acceleration plan that would ensure that the BEP for Free State should be completed in the current financial year.

He expressed appreciation for what the Chairperson had mentioned about the strides and progress that the Department was making on the ground.

Mr Conrad Greve, Chief Director: Human Resources, DWS, said he would respond to some labour relations issues and disciplinary cases. The CFO briefly touched on the issue of the employee transfer from the DWS to the Gauteng Provincial Treasury Department. To provide a little more information, in February 2020, the employee who was the Chief Director for Supply Chain Management when the allegations were made, had been one of the few employees left at the time. She had been charged with misconduct, as the CFO had indicated contravention of the SCM procedures. On 1 March, she was transferred from this Department to the provincial Treasury Department. The DWS had served the charges in February, and the hearing had taken place on 27 and 28 February, but on 1 March, she had assumed duty at the Provincial Treasury. In terms of the Public Service Act, section 16B, an employer or the department may transfer charges or disciplinary actions to the new employer department, and that was duly done. The Director General had referred the matter to the head of department for the Provincial Treasury, and they had proceeded with the case. Incidentally, the same prosecutor representing the DWS had been appointed by Provincial Treasury for continuity purposes. That case was still proceeding. The Department was communicating on an ongoing basis, and even some employees from the DWS had been testifying in the hearing at the provincial Treasury. The last update received was that the hearing was proceeding on 27 or 28 May, or 28 and 31 May, and then two days in June as well, so hopefully, that long outstanding hearing could be concluded.

Regarding the desalination plant, there were allegations that the charges included the DDG, who had been charged and dismissed in November 2022. Another employee that was also implicated and was still in the DWS was about to be charged because the Department was awaiting the presiding officer's findings on the matter involving the DDG, as there were new allegations that had arisen from other forensic investigations that had been carried out. As this had been reported on 11 May, the employee had been given seven days to respond. As soon as she responds, the Department would proceed with reformulating the old charges and the new allegations that had come to light.

Deputy Minister of Water and Sanitation, Ms Judith Tshabalala, said there had been a question about the Department's governance challenges, and the response had been that it was trying to stabilise the situation by getting rid of the acting positions. There were many positive outcomes, such as implementing measures to eliminate irregular expenditure, and improved cash and banking management control to deal with irregular and unauthorised expenditure. The decline in the incidence of irregular, fruitless and wasteful expenditure would have been noted in the achievements, and there had been progress in the disciplinary investigation matters, including the collaboration with law enforcement agencies to recover funds.

There were also questions about the policy and the impediments to the provision of water, and the fact that there was a lack of pre-existing designs through comprehensive assessment and standardised designs. This led to project delays and the need to implement performance monitoring and evaluation systems. During the budget vote debate, compliance with the legislation in the National Water Act was spoken about. They had established a comprehensive framework for sustainable water use and management, and regulations were introduced, including taking action to ensure water users complied with the Act.

The Department was also progressively implementing compulsory licensing, which would improve the control of water use and allow for more efficient allocations and freeing up water for new users.

The amendments that had been looked at for the Water Services Act would assist in better regulating water services and enforcing compliance with the norms and standards. There was a commitment that this should be done during the financial year. The proposed amendments would also further facilitate the transformation of water use and allocations. Assistance on this would be needed from the Members of Parliament.

Matters of political sabotages and crime had been spoken about, Members also needed to assist the Department on this matter when speaking about active engagement programmes with local communities. Projects needed to address community unrest and demands for employment. There was a shutdown of the Nandoni water treatment plant due to community unrest, and the communities around the other plants were protesting about water shortages in their areas.

Minister Deputy Mahlobo said that since this current administration, including the Portfolio Committee, had been working together while doing oversight, the Department was in a better position to perform its constitutional obligation with the supported legislation. Issues of water have been prioritised, but the challenges remain. It could not be disputed that the Department had been stabilised -- the administration had been staffed with very competent men and women working hard under very difficult conditions. Local government was experiencing a plethora of challenges, irrespective of which party was running. Some of the challenges were exogenous, and some were self-inflicted.


In the Department, systems and controls and all the processes had improved under the current administration, with significant progress, but there were still some problem areas, hence the financial turnaround plan that was being religiously implemented. There was a lot of progress among the executives because they were held accountable at that level. The morale in the DWS at the time it was inherited was at its lowest ebb, with issues of ethical leadership, morality, performance and the culture of impunity. At the moment, there was no culture of impunity -- the leadership knew that they were professionals, that they had to work hard and do their level best. There was consequence management, but also incentives in dealing with this. To address the change of culture, for example, some sessions were being done on issues of anti-corruption, and all of these particular measures, including staff development, were doing well. The reconfiguration of the Department was also doing well.

The Minister said that the Department was aware of historical matters and had been consistently reported to the Portfolio Committee, involving the conduct of previous employees. He gave an assurance the Department would pursue these issues even in instances where people jumped ship. It was not the norm in the public service to follow people, but the Department followed them. When someone ran to another department while matters were outstanding, the DWS could not stop the movement of people, but would act responsibly by advising the new employer. The case of the employee transferred to a department in Gauteng made it very clear that the Department would follow everything and not leave any matters unresolved.

He said the Department, as the employer, had a duty to ensure that the people they appointed were properly capacitated and had no conflict of interest, and handled disciplinary matters fairly without any fear of contradiction and prejudice. It would be very wrong to send people to a disciplinary committee (DC) hearing with a predetermined outcome. The time that was taken for these processes to be concluded was in the hands of the Department. Ordinarily, there was a time frame that was prescribed that the discipline must be expeditious and must be firm. The department was unable to meet that timeframe, because, in the democratic dispensation that had been chosen, workers had constitutional rights. They had the right to representation and did whatever they wanted under those particular processes. However, the employer also had rights, and their involvement had to ensure that those rights were implemented without prejudice. Sometimes there was exploitation by individuals in the legal fraternity, who took longer so that matters would be delayed, but it did not necessarily mean no progress was made. When people had been sanctioned, they always had the right to appeal to the appeal authority, which was a Minister.

There was action happening. Matters within the scope of the law enforcement agencies, whether it was the SIU or the Hawks and so forth, there was continuous engagement by the DG and his counterparts to continuously check progress, and he agreed that this needed to be supported. Some matters were moving towards the level of prosecution, and the Department was following this as they did not want to create an impression that no work was being done to address these matters.

Deputy Minister Mahlobo said the financial position of the Department had improved. In the previous engagement with the Portfolio Committee, the level of under-expenditure had been shown to have been significantly reduced. Although the audit had not been completed for the financial year under review, the expenditure was more than 95%, compared to the previous years. This was an expenditure linked with non-financial performance information, and there was no big gap or variance between the non-financial expenditures and the outcomes. The Department was very satisfied with that but demanded more from the CFO and the entire team. The Department wanted a clean audit, as it was not satisfied that there were still some matters of emphasis in their books. These matters had to be attended to.

During the turnaround, the Department would be attending to the procurement processes abused by employees in both the Department and the sector. Some investigations involved the water boards, and the need for the Department's support. The internal audit function and risk management unit had been doing a lot of investigations and had never shied away from a matter raised, because it could not be put under the carpet. Procurement was one of the biggest risk areas, and the procurement framework was implemented to support the Department, including municipalities, because people think that procurement is a clerical function when it is a technical function, especially in a space that involves the built environment. There were also issues of conflict of interest, where sometimes procurement could not proceed on the basis that certain people interfered and denied citizens the right to have access to decent sanitation or potable drinking water.

Mr Moatshe had reported that condonation had some preconditions, one being to ensure that, indeed there had been consequence management, and that it had been satisfactory and rational. In instances where the Department had acted, certain condonations have been made to reduce more than R9 billion inherited in one account and more than R4 billion in the other account, and Treasury was working with the Department. However, in terms of the law, the unauthorised expenditure fell within the Portfolio Committee’s purview, so the Department was coming to it for that particular support. Even in the implementation of major projects, there was a number that were highlighted where there was interference, malfeasance and certain elements of corruption. This had not been left unchallenged, and there had been action.

There was confidence that even towards the end of this administration, the handover would see a Department that was being repurposed to achieve its role of leading the sector and supporting the country to achieve the right to access water and economic benefits, and the right to have access to sanitation services. The Portfolio Committee was a reliable partner with the positive criticism it provides, urging the Department to do more.

Chairperson's comments

The Chairperson said that in the process of moving forward, giving answers to win a debate should be avoided because they were all Members of Parliament. There should be ownership of the failures and successes, and they must together pick up the spear and move forward to save South Africa. When questions were asked, they should be based on seeking information to move forward.

Deputy Minister Tshabalala had said the Portfolio Committee should also accept the blame for society stopping the Department. However, when somebody misappropriates R9 billion and treats the offence as a normal employee relationship, that undermines the seriousness of the offence. This was no longer an employee conduct, but a political one, and something stronger must be done to prevent this from happening moving forward. It was a pity that politicians should have to answer these questions, because the officials were planning to follow that process and procedure. Officials did not declare their conflict of interest and were deliberately not wanting to pay a service provider unless he or she had done something for that particular official.

Ms Mohlala asked if there was no involvement of politicians in corruption, or was it only the officials that were being held accountable while the politicians were not being held accountable? Looking at the involvement of former DWS Minister Makonyani in corruption and financial malfeasance -- what happened in that instance? What had been the political interference, as this question had not been responded to?

The Chairperson said that he doubted if there was a possible answer to the questions raised by Ms Mohlala, because officials could not tell the names of those implicated. If explanations did not come up on the matter, there should be a way to follow up politically, but officials could not be asked to implicate Members of Parliament, as this would be wrong.

Deputy Minister Mahlobo said that the Department was not being defensive, but was appealing for the engagements to remain structured. Where there were issues of corruption, the manner of the guidance of the Committee in the past had been to call the Department again on these matters, and they would come with the SIU, who were their partners. To say that politicians were involved or not was a serious allegation. The report on the SIU that was being concluded had not come to that particular determination. Certain matters were being investigated, but as long as that determination had not been arrived at, it would be very reasonable that discussions remain measured not to cast any aspersions. It would be irresponsible of the Department not to respond because, in other ways, the silence would mean consent. It was clear to the multi-agency team that the Department was working with, that they would be there whenever the Portfolio Committee called them. There had been no finding that an employee had misappropriated R9 billion. However, there had been instances where processes were not followed in terms of the law and the supply chain, and that was why the Department had been implementing the recommendation to act where there was a transgression in terms of its laws and processes. That was why these matters were with the law enforcement agencies. There must be no suggestion to make it a headline that an official in the Department had misappropriated R9 billion. There was an irregular expenditure as defined by the law, with different components, but when the Portfolio Committee wanted to discuss the fine details beyond this particular point, the Department was available to account and be transparent.

The Chairperson said the Portfolio Committee should take up that challenge because there was a need to go beyond simply being answered based on having been given an answer. There must be an opportunity to defend what had been said in the meeting.

Cholera in Hammanskraal

He asked the Deputy Minister to take the meeting through the problems in Hammanskraal.

Deputy Minister Mahlobo said he would do a brief oral presentation so that when the Portfolio Committee went on site, there would not be a problem. The last time the Portfolio Committee received a joint presentation by the DWS, the city of Tshwane and the Gauteng provincial government, direction had been given on what should be done. Tshwane had started to do some of those processes, and had intervened in the area of Rooi Vaal to deal with those issues. The community of Hammanskraal was receiving water on three points. On the other side of Hammanskraal, water was coming from the Magalies pipeline, from their treatment system. There was also water coming from Rand Water, but in the main, the system in Hammanskraal was dependent on the water supplied by Tshwane, which was from the Temba water treatment plant that the Department had visited. The municipality had been moving on with the implementation of the plan, but they had challenges, one of which was a governance matter -- the well-publicised political instability had affected the administration. There had been partial implementation of the plans, but one could not conclude the major issues, although the Department of Public Service and Administration (DPSA) had agreed to overhaul the provincial department's infrastructure to address the capacity issues. Ultimately they continued to discharge effluent in most of their treatment plants, especially the four main treatment plants where it was known that the water was not of good quality.

After the previous administration was taken to court, the Department intervened. The Mayor had asked the Minister for a meeting on 16 May, and on 17 May, this was granted. The Mayor had said he needed to be assisted by the national government, as he assessed that there were capacity and funding challenges related to water and sanitation. The Minister agreed that the municipal manager (MM) and the DG of the two departments would meet to thrash out the plan that had been submitted to the Portfolio Committee, as it had to be reviewed for the current circumstances so that it could be strengthened and signed off as a resolution by the municipality, agreeing that the Department was taking over in terms of support to mobilise and unlock funding.

Unfortunately, on 19 May, there was a cholera outbreak based on gastrointestinal infections caused by the cholera bacteria. Many people started to be affected and as a response by the government, it was decided there must be a task team, both at a political and administrative level. On 22 May, the team led by Dr Dlomo supported by Deputy Minister Mahlobo, Deputy Minister Tshabalala, Ms Nomantu Nkomo Ralehoko, Member of the Executive Council (MEC), all the MECs in Tshwane and some councillors had met and convened in the hospital. Unfortunately, the executive Mayor was not allowed in because people were barricading the gate that was barricaded. Technical teams from the Department were led by the Director-General of Health, Dr Buthelezi, supported by DDGs Zwane and Mathye, and the provincial head Mr Maluleka. The city manager and others were there.

It was then agreed that one of the immediate tasks was to deal with the health crisis, and for the capacity of the health facilities to be able to respond and accept more people, because many were still coming in with symptoms that required treatment and medication. That matter was led by the Department of Health, the MEC, the Deputy Minister and the Director-General. As of the 22 May afternoon, it was confirmed that 15 people had perished or lost their lives due to this outbreak and in the assessment, in the main, the outbreak was located in a few areas within Hammanskraal, including the police academy, where some of the first cases had been noted. Due to the mobility of people, some of these people were starting to move to other provinces, especially in the case of those who visited them from the other side of Limpopo. There were also incidents in Free State, but it had not been concluded that they were linked to this. The National Institute for Communicable Diseases (NICD), working in the Department of Health, had decided that the people in contact must be traced. They would deal with the issues of alerting and being vigilant in raising issues. It was decided that an investigation team must come to the bottom of what had caused this outbreak. The team led by DDGs Zwane and Mathye had brought some scientists to work on these particular issues. On 22 May, some samples were taken, especially from the line of Rand Water in Magalies, and the Temba plant, including in those in particular communities.

DM Mahlobo said that in the meantime, communities must receive water, and they must be assured that this water is in good condition. The Cty of Tshwane had 52 water tankers, and the three tankers providing water to Hammanskraal were increased to five on 22 May. It was ensured that the water was abstracted in the right areas, where the quality could be guaranteed. He, Deputy Minister Tshabalala and MMC Kgosi were able to oversee and make a follow-up. However, as the Portfolio Committee had directed -- that they wanted a long-term solution -- the Minister and the Mayor would meet that week to conclude that task.

It was known that many municipalities were providing water at that stage in that particular function. An alert would be issued through the acting Director-General for all water services authorities to take precautionary measures, including advising citizens to play their part. Acting Minister of Social Development, Lindiwe Zulu, had interacted with her counterpart in Gauteng because there was a need for psycho-social and humanitarian support for the bereaved families.

The Department did not want to pre-empt the outcome of this investigation, but one of the biggest challenges was that communities might continue to use the water from the Temba water treatment plant, although the municipality had given clear instructions to communities not to use the water for human consumption, as it was not fit for use. It could be used only for irrigation and the washing of clothes. The other possibilities involved standing water tanks, water trucks that were just small lorries with JoJo tanks on top, and unsuitable containers for carrying water. The preliminary results should be received on 23 or 24 May so that after the Minister is engaged, they could be to publicised and people advised on what needs to be done.

However, there was a firm view that there must be accountability and that people must be brought to book about this incident. In the long term, the Department could be accused that nothing had been done, but any intervention would always be viewed with a political lens. There was a time that this municipality had been put under administration. They had gone to court, and the court had ruled in favour of that administration at the time, that the Gauteng provincial government, in invoking section 139, had never followed certain processes. The same happened to this administration when they wanted to intervene when there were blockages and refusals, until it was taken to court to enforce it and after some directives were done. It would be concluded with the Mayor this week that they should get an agreement to become a declaratory order of the court, so that when the Mayor or MMCs were changed, there would be no problem of people saying the decisions of the previous administration bound them, as it was known that the practice was that the successor in law inherits both assets and liabilities. Mr Mathye had indicated the long-term issue, which was a medium-term and long-term complete overhaul of the system, because if the system was not attended to, as directed in supporting that municipality, this situation was going to continue.

Mr Mathye said the Department had in the past made an effort to work with the City of Tshwane, part of which was through the litigation process where there were challenges because the Department could not fund the city of Tshwane because their grants were not designed to fund metros. Tshwane therefore had to use their grants, in this case, the Urban Settlements Development Grant (USDG), to make interventions in areas that had been identified as hot spots. That exercise had not yielded the results to date. At the moment, there was a meeting on 22 May with the city of Tshwane, their legal team, the Department’s legal team, and the city manager. The issues raised were in the letter that the executive Mayor had returned to the Minister, citing that they had serious gaps in their budget facilities, and needed the Department to intervene in any way and give assistance.

Tshwane had now said that they were in a more advanced stage of getting some funding or loans from the Development Bank of Southern Africa (DBSA), and would have a meeting on 25 May to finalise the process. There was some confidence that the DBSA could at least assist them with some funding because they needed to overhaul the overall system around Tshwane, which would require funding of at least R68 billion, which would have to come through multiple years of investment. Their USDG and capital expenditure amounted to only about R2.5 billion. The end goal of that meeting was for the DBSA to give an indicative commitment with timelines on how this whole loan issue was going to be implemented, and only then would the city of Tshwane be able to give more commitment regarding the specifics. This was because the reason they had said they could not adhere to the Department’s court orders was because they did not have proper indicative timelines because of funding issues. After the meeting, the Minister and the Deputy Ministers would be appraised on the intervention model. This would address the whole medium to long-term approach.

However, the question arises that if DBSA did not give the positive result expected, what would happen? The Executive Mayor had indicated that they would in any way approach or accept any assistance that the Department could give. There had been an engagement to look at the possibility of proposing to the City of Tshwane a way, through Section 30, in which Rand Water could be used in some way, but this was not yet final.

DM Mahlobo said that when Minister Mchunu was back, they would prepare a detailed presentation to share with him and the Committee as a government response, and at the right time, it would be guided by the proper committee to give the full report. The DDGs were handling the issue, and the instructions were clear. The water tankers should be monitored to ensure they arrive among the people daily, and Mr Zwane would have to give a report twice a day. The investigations were not just a matter of taking water samples. The Department had to get to the bottom of this, and the technical teams would have to increase the capacity of some of the scientists involved in forensic research.

The Chairperson said that the Portfolio Committee wanted to go to Hammanskraal without any clear-cut programme or fore-knowledge of the big issue. There must never be overreaching on the work that needed to be done, and also over-populating the visit to the area. What would the DM advise as a process moving forward? Was there still a need for the Portfolio Committee to go? He would allow other Members to speak on this before he gave his advice. The reason for going there was not for political point scoring but to intervene as government. If there was an overpopulation of the structure and representation of Parliament, it may create a wrong impression.

Ms Mohlala said that on 15 March, the Committee had met the city of Tshwane so they could present their issues, because the concern after the oversight visit was that there was a very serious problem in Hammanskraal. When they arrived, there were a lot of issues raised and one was the issue of funding. The focus had been on the Rooi Vaal wastewater treatment works and the infrastructure collapse in Tshwane. The responses showed that they were going to work on everything with the provincial government, and they had to come together because the lives of the people in Hammanskraal, and Tshwane at large, were in trouble.

At the meeting, they had also been made to believe that the city was currently sourcing funding for the phase two project, estimated at R2.6 billion, and that the previous Minister had committed to allocate funding. The reason for this setting had been because of the issue of insufficient funding and the incapacity of the municipality and national government, who were not showing a commitment to ensure that the people of Tshwane were taken care of. The provincial, national, and local governments must work together. Over the years, many reports have been released by human rights activists about the issues of Hammanskraal. If this work had been taken seriously and ensured the protection of the people of Hammanskraal, there would not be issues of people dying from cholera. There had been progress in Mopani and in those areas, so there must also be progress in Hammanskraal. The national government must assist because the provincial and local governments were failing, so there must be intervention to ensure a takeover. 15 lives had been lost, so the Portfolio Committee needed to go there and prioritise the needs of these people, because the dilapidated infrastructure was an emergency issue that must be attended to as soon as possible.

Mr Tseki said they should not ask the Department for an opinion and not change the invitation to go to Hammanskraal. This was an emergency. If not all of the Members were not available, the Portfolio Committee should just make arrangements that were possible to be made within the current space and time.

The Chairperson said that the Committee secretariat must find out who was available, and at what time. The invitation to go to Hammanskraal had been extended to the Portfolio Committee and those available must talk to the Committee secretariat. Meeting after lunch would be better, as some members would be travelling from other places.

Mr Tseki proposed 2 pm.

The Chairperson agreed to 2 pm, to allow people to travel more safely. The Committee secretariat should contact the people at Hammanskraal to tell them that the Portfolio Committee would be there at 2 pm.

The Committee discussed the arrangements for travelling from the airport.

The meeting was adjourned.
 

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