Troubled state-owned water supplier Rand Water spent almost a billion rand buying steel and pipes without following proper procurement processes.
These details are contained in the state-owned entity’s latest annual report which is due to be tabled before Parliament on Friday.
The copy – which City Press has obtained – revealed that Rand Water had an irregular expenditure amounting to R952 778 000 as disclosed in its financial statements.
Auditor-General Kimi Makwetu wrote that the water supplier’s “financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework and supported by full and proper records, as required by section 55(1)(b) of the PFMA. Material misstatements of property, plant and equipment identified by the auditors in the submitted financial statement were corrected and the supporting records for non-current assets held for sale were provided subsequently, resulting in the financial statements receiving an unqualified audit opinion.”
Makwetu said: “Most of the irregular expenditure was caused by emergency procurement not in accordance with instruction note 3 of 2016-17, and the use of panel of steel pipe manufacturers which was not in accordance with the requirements of section 51(1)(iii) of the PFMA.”
Makwetu also found that “some of the goods, works or services were not procured through a procurement process which is fair, equitable, transparent and competitive, as required by section 51(1) (a)(iii) of the PFMA. In some instances, the procurement of goods and services were split into smaller parts to avoid procurement through a tender process.”
Makwetu said “some quotations were accepted from bidders that had not scored the highest points in the evaluation process, as required by section 2(1)(f) of the Preferential Procurement Policy Framework Act and Preferential Procurement Regulations.”
Rand Water, which supplies water to Gauteng, parts of Mpumalanga, North West and Free State, has come under strain recently following the dry weather patterns with water levels in the Vaal Dam dropping to below 50% last month.