Over 400 financial misconduct allegations investigated by Water and Sanitation

The Department of Water and Sanitation's internal audit unit investigated a total of 446 allegations of financial misconduct over the past five years.

Briefing the Standing Committee on Public Accounts on Tuesday, the department’s director-general Sean Phillips said the investigations confirmed 326 of the allegations while 120 were deemed unfounded and 73 were currently under investigation.

“Seven cases have not yet been investigated as they were received recently,” he said.

Phillips also said finalised cases were referred to the department’s employee relations unit to take disciplinary action against officials who committed financial and other acts of misconduct, and SAPS and the Hawks for criminal investigation.

There were also cases referred to the department’s legal services for civil recovery in instances where the department suffered financial loss.

Phillips stated that for the 326 cases confirmed to be true, most of the disciplinary processes have been completed and the remainder was still in progress.

“The disciplinary processes resulted in various sanctions against the transgressors. These sanctions included dismissal, demotion, suspension without pay and written letters.”

He added that the internal audit has conducted 140 awareness sessions during the five year period and 4307 officials were trained about anti-fraud and corruption measures.

Regarding the audit outcomes for 2024/25, Phillips said the department has implemented its financial recovery plan.

This saw the department move from near-bankruptcy in 2016/17 to a healthy financial state and moved from qualified audits to unqualified audits with findings.

“We are not satisfied with an unqualified audit with findings,” Phillips said.

He told Scopa that the problem of high under-expenditure on both the department’s budget and grants has been addressed.

The department is now achieving over 99% expenditure in its budget and grants.

This was ascribed to strengthened controls, and reducing irregular and unauthorised expenditure compared to the 2017/18 period.

Phillips said improving the implementation and monitoring of the department and municipal grant-funded projects was the key area requiring further improvement to achieve clean audit.

“Department of Water and Sanitation is engaged in the required process to regularise past irregular and unauthorised expenditure through taking disciplinary action, implementing improved controls and approaching the National Treasury for condonation.”

However, Phillips noted that the Auditor-General issued nine material irregularities in 2024/25.

“Three of these material irregularities have been resolved while six are still in progress.”

Phillips said they were taking disciplinary action against the implicated officials, recovering funds in instance where financial loss has been suffered and improving procurement and contract management processes.

Quizzed by ANC MP Helen Neale-May about guaranteeing that financial statements were prepared adequately, Minister Pemmy Majodina confirmed that the Auditor-General raised concerns in terms of full compliance.

“The issue of annual financial statements is not of a good standard.” Majodina said.

CFO Frans Moatshe said they have put in place corrective measures and also developed an audit plan.

“We noted most of the challenges come from projects through municipalities as well as water boards. We have strengthened oversight on implementing agencies,” Moatshe said.

He also said there were no standard operating procedures to deal with monthly reconciliations and that errors were picked early rather than at the end of the financial year.

EFF MP Veronica Mente said she was happy that the department was taking disciplinary action and had made referrals for criminal charges.

“This department has been faced with a lot of internal issues and a lot of arrogance. I must say that things have changed... hoping that everyone will take their jobs seriously,” Mente said.

Cape Times