Umgeni Water leaks R1.4bn in irregular expenditure with officials defending flouting of procedures

play article
Subscribers can listen to this article
(Ian Waldie/Getty Images)
(Ian Waldie/Getty Images)
  • Umgeni Water racked up a mammoth R1.4 billion in irregular expenditure, and executives tried to justify it.
  • They said that while normal procurement procedures were not followed, services were still delivered.
  • Nine disciplinary investigations at Umgeni Water were completed, but the water entity was scant with details.

Despite incurring R1.4 billion in irregular expenditure, the chief financial officer (CFO) and board chairperson of Umgeni Water defended the flouting of procedures, saying 99% of services were still delivered to the bulk water supplier.

"The fact that expenditure is irregular does not mean the entity did not receive the service. It means you did not follow normal procurement processes or Treasury instructions to perform the particular service," said newly appointed Umgeni Water CFO Thami Mkhwanazi.

He was answering questions at Durban's Moses Mabhida Stadium on Thursday at a media briefing on the 2020-'21 annual report.

In justifying the mammoth irregular expenditure, Mkhwanazi said the entity had not lost that amount of money.

He said: 

If we are saying it is R1.4 billion in irregular expenditure it does not mean that the entity has lost that amount. It might mean that service delivery is done not in compliance with legislation that is put in place. That needs to be clear.

He, however, did not divulge details of contracts or officials who were responsible for the irregular expenses.

Instead, he said that investigations were carried out, and based on those, nine disciplinary matters were carried out and finalised.

He did not give details of the investigations.

The only information given to the media was that irregular expenditure of R937 million was "carried forward from previous years" and that R466 million incurred in 2020-'21 came from multi-year contracts.

READ | Umgeni Water’s R1,4 billion irregular expenditure due to old contracts 

"We tried to explain that a major portion of these irregular expenditures that we are sitting with relates to variation orders for contracts and projects that are already ongoing."

Mkhwanazi lamented that while the contracts were irregular, work was done.

"The service is done, but we did not follow normal processes. Ninety-nine percent of the time services are performed, just an issue of non-compliance."

Umgeni Water board chairperson Ziphozethu Mathenjwa attempted to explain the nine disciplinary cases that were completed, but also justified some of the actions of officials.

"Some [disciplinary processes] are not related to companies, some are actually positive."

ALSO READ | Msunduzi Municipality says vandals are behind city’s water woes

She said in one case an engineer signed off on a project but "in our documentation, we indicated that only the head of the department is supposed to sign off".

"Those are transgressions. What they did was not wrong. They were qualified to do it, but in our files, the head of the division has to sign off. They did good for the organisation but the process was not followed. In some cases, we had to revise the procedure.

"But in cases where it involves two people not following a specific process, we have gone through the disciplinary process and policy. Where the policy says suspension, then we suspend. I am confident we have applied the policy."

Never miss a story. Choose from our range of newsletters to get the news you want delivered straight to your inbox. 

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Voting Booth
Zama zama crackdown: What are your thoughts on West Village residents taking the law into their own hands?
Please select an option Oops! Something went wrong, please try again later.
Authorities should bring in the army already
8% - 382 votes
Illegal miners can't be scapegoated for all crime
59% - 2951 votes
What else did we expect without no proper policing
30% - 1505 votes
Vigilante groups are also part of the problem
3% - 142 votes
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.