ERWAT denies claims of expenditure
"Since the 2014/15 financial year, very strict measurements have been put in place to address irregular expenditure."
Claims made by Councillor Tiziana Burtone of ward 92 about expenditure at the East Rand Water Care Company (ERWAT) have been denounced by the company.
The marketing communications manager of ERWAT, Ms Wanda Annandale, said ERWAT did not agree with the press release made by Clr Burtone and wished to clarify the information.
Clr Burtone said the Ekurhuleni’s audit report for the 2015/16 financial year showed that ERWAT accumulated an estimated R39.3-million in irregular expenditure which could have gone to the the upgrading of ERWAT.
According to Clr Burtone, most of the irregular expenditure is related to the company failing to meet its own supply chain management (SCM) requirements when awarding tenders.
Clr Burtone, a member of the finance and ethics oversight committee in the City of Ekurhuleni, said on occasions the internal supply chain policy was overlooked and not adhered to by the accounting officer.
“It is worrisome that no internal control measures were put in place, such as internal audit measures to monitor expenditure, to ensure that the accounting officer is more proactive and timeous in mitigating wasteful, fruitless and irregular expenditure before eventually spiralling into millions being lost,” said Clr Burtone.
She said the alleged irregularly spent funds could have been used to expand ERWAT which according to her, is currently running under capacity.
“Twenty percent of ERWAT’s expenditure is spent on consultation and professional fees because the process was not clearly defined. Anything can be classified as consulting which could lead to fraud and corruption.”
As a result of the water scarcity in South Africa, Clr Burtone said Ekurhuleni should establish more control measures to budget and utilise money more efficiently and effectively.
In response to the claims Ms Annandale said the R39.3-million in irregular expenditure in the 2015/16 financial year mentioned by Clr Burtone refers to an event in the 2014/15 financial year.
“As most of ERWAT’s projects are multi-year projects, the relevant amounts are also reflected in the next financial year or until the project is completed,” said Ms Annandale.
“The irregular expenditure of R39.3 million was due to a technical error and did not result in any money lost that could have been ‘redirected towards the expansion of the ERWAT plant which is currently running under capacity’, as stated,” said Ms Annandale.
“Since the 2014/15 financial year, very strict measurements have been put in place to address irregular expenditure. In the 2015/16 financial year the total irregular expenditure amounted to R540 000,” said Ms Annandale.
Ms Annandale said the 2015/16 audit is currently performed by the Auditor-General and the final report will only be available at the end of November 2016.
In response to the claims made about the SCM processes when awarding tenders, MS Annandale said ERWAT follows strict processes when awarding tenders.
Ms Annandale said that the percentages for the consultation and professional fees were incorrect.
“During the 2015/16 financial year 1,94 percent was spent in consultancy fees,” said Ms Annandale.
She said this worked out to be R13.04-m of the total operating expenditure of R671.6-m.
“ERWAT has always been and will remain committed to deliver a quality, affordable and sustainable service to its communities and protect the environment as well as our most precious resource, water. ERWAT is also committed to good governance, striving towards transparency and ethical behaviour at all times,” said Ms Annandale.
