Umgeni Water flushes R225m down the irregular expenditure drain

Umgeni Water spent nearly R225 million on eight contracts without following proper procurement processes. The money was spent on a security and services tender, fixing lifts, fixing a dam crack, and the awarding of a canteen tender at the state-owned enterprise (SOE).

The amount of R224 892 827  is contained in leaked internal documents obtained by City Press.

The documents also include parts of a report by the Auditor-General which found that some officials were complicit in the awarding of contracts. This led to a dispute between the water board and Auditor-General Kimi Makwetu, with said dispute currently at the centre of an independent review by a panel of experts.

Last month City Press reported that another board, Rand Water, spent almost R1 billion buying steel pipes without following proper procurement processes.

A report by the Auditor-General revealed at least 11 SOEs which submitted financials that failed to obtain clean audits for the 2018/19 consolidated national and provincial audit.

Ungeni Water board chairperson Ziphozethu Mathenjwa told City Press this week that the board took audit findings seriously and was in the process of finding a lasting solution to mismanagement.

“We seek to review our processes, policies and systems against our peers in the public sector, industry and best practice internationally to enhance and improve how Ungeni Water conducts its business. We want to increase efficiency and build resilient systems that are fully and immediately compliant with the changing regulatory and legislative environment” she said.

Mathenjwa said the board realised that even though management had operated with board-approved policies, there seemed to be differences of opinion with the Auditor-General on how some of the decisions that management had taken, which were in the interest of the business, should be treated.

“Umgeni Water does not want to be in a position where its policies are seen to be not in line with legislation and best practice. Expert advisors will dig deep into this space and provide practical solutions, having tested/benchmarked with peers. This process will also involve engagement with National Treasury, the office of the Auditor-General, shareholders, other peer institutions, as well as academia and professionals in various fields,” she said.

According to Mathenjwa, the panel is expected to complete its work within three to six months.

“However, the board wants to keep an extended panel for work that may be required as it gets to understand the business environment. This will be on an ad hoc basis over the term of this board so as to have quick solutions reviewed, presented and approved by the board from time to time,” she said.

The board is expected to brief the media today regarding the findings and the performance of water board.


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