22 August 2017

South Africa: Mokonyane Blames Municipalities' R7 Billion Debt for Her Dept's Financial Woes

Water and Sanitation Minister Nomvula Mokonyane had laid the blame for her department's ailing finances on ill-equipped municipalities who could not implement their projects.

Mokonyane on Tuesday appeared before the standing committee on public accounts (Scopa) to account for R2.5bn in irregular expenditure in 2015/16.

She said municipalities owe the department R7bn. It was further explained that municipalities actually owe R3.8bn, and water boards, the entities that implement department projects, owe R3.2bn.

They included the water board sum in the R7bn figure as the reason the boards could not pay the department, is that municipalities owe them money too.

Mokonyane claimed municipalities could also not deal with maintenance in emergency projects and the department again had to step in with R400m.

MPs not convinced

Construction issues and reticulation of water supply in those municipalities further led to a belief that the department was not delivering, despite the money they spent.

"We have been throwing money in [for water emergencies] without ensuring they had capacity," she said, referring to the Giyani water project and the 2014 Mopani emergency crisis.

Scopa MPs generally were not convinced that municipalities were solely to blame.

Democratic Alliance MP Tim Brauteseth was first out the blocks, and asked Mokonyane why she was "passing the buck.

"You are the custodian of water in the country," he said.

Her department has had multiple financial failings for a number of years, he highlighted, including a R1.5bn accrual from the last financial year that has been rolled over from previous years.

The department also had weak internal controls and couldn't account for invoices amounting to over R200m.

The minister insisted her department was hamstrung by legislation regarding emerging funding, and poorly run municipalities which could not follow through with their mandate, leading to poor invoicing.

Staff warnings

Inkatha Freedom Party MP Mkuleko Hlengwa asked how many directors general had served under Mokonyane since she was appointed in 2014.

She said two acting directors general, and two full time appointments.

Current director general Dan Mashitisho is currently suspended for allegedly failing to account Parliament satisfactorily, she explained.

Mokonyane claimed Mashitisho also showed "dereliction of duty" in implementing the department's annual performance plan.

The department has ramped up efforts to crack down on errant managers, supervisors and personnel at the department following years of maladministration and financial woes.

Three senior executives are currently suspended following a double invoice to the Lepelle Northern Water Board for R87m. They include a former chief financial officer, and two deputy directors general.

'Revolving door'

Brauteseth and Hlengwa both laughed when Mokonyane said the former CFO was moved to the Overberg water board in July 2014, where she failed "dismally". She then returned to the department in another undisclosed position.

It was a clear indication of a "revolving door" policy at the department for errant managers, they both said.

There are 92 people in the department currently on final warnings. A further 107 have received written warnings.

Mokonyane also revealed that various external auditors have come on board. They are working with the Auditor General's office and Ernst and Young to aid them with an admittedly weak internal audit committee.

Ernst and Young is contracted at roughly R400 000 a month for its work.

The Special Investigative Unit and the Public Protector was also investigating the controversial Giyani Project, which saw financial outlays skyrocket over its two-and-a-half year project.

Source: News24

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