Finance strategic outputs
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Finance strategic outputs. Presented by Mr Onesmus Ayaya Chief Financial Officer Department: Water Affairs (DWA) 18 August 2009. outline. Key functional areas Overview of the past key achievements Past challenges facing the branch Key Performance Areas Rationale for selecting the KPAs

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Finance strategic outputs

Finance strategic outputs

Presented byMr Onesmus AyayaChief Financial OfficerDepartment: Water Affairs (DWA)18 August 2009



  • Key functional areas

  • Overview of the past key achievements

  • Past challenges facing the branch

  • Key Performance Areas

  • Rationale for selecting the KPAs

  • Funding

    • WTE

    • MEA

  • Monitoring

  • Departmental expenditure trends

  • Departmental indicate 2010 MTEF allocations

Key functional areas in the branch

Key functional areas in the branch

  • Supply Chain and Asset Management

  • Revenue and debtors management

  • Financial Accounting and Reporting

  • Management Accounting

  • Budget and Planning (including expenditure management)

Overview of past key achievements

Overview of past Key achievements

  • The separation of the Department’s two accounts, namely; Main Account and the Water Trading Entity

  • The strengthening of the capacity was also realized through the filling of key management position to provide effective leadership in financial management

  • Verification and valuation of major bulk water supply assets

  • Creation of an updated asset register

  • Development of financial management processes and policies

  • Implementation of Enterprise Resource Planning systems for WTE

  • Verification and valuation of biological assets

Past challenges facing finance

Past Challenges facing finance

  • Clean audit (financial management and skills)

  • Non-integrated financial systems for MEA

  • Minimal transformation in terms of organisational systems and processes

  • Financial governance: relationship between regions and head office

Past challenges facing finance cont

Past Challenges facing finance (cont)

  • Systems that requires proper implementation and post implementation refinements– long term, user requirements (SAP, LOGIS etc)

  • Inadequate capacity (lack of skilled resources)

  • Improperly linked staff to either Main Account or Trading Entity

  • Extensive infrastructure assets –magnitude, spatial distribution/location: Auditable assets plans needed

Wte specific challenges extent of infrastructure

Wte specific challengesextent of infrastructure

  • 240 schemes

  • 334 dams (34 billion cum storage)

  • 6929 km canals

  • 171 km tunnels

  • 990 km pipelines

  • 56 pump stations – 211 MW

  • Other infrastructure

    • 28 wastewater treatment works

    • 34 water treatment works

    • 2581 buildings

    • 3006 measuring facilities (1070 hydro, 1724 geohydro,212 meteorological stations)

  • Land – 795,563 Ha plus 137,264 Ha servitudes

Wte challenges


  • Escalating risk of service failure

    • renewal backlogs are R10 billion and growing

    • infrastructure maintenance is insufficient

    • insufficient funding - price capping and exemptions reduce potential income from R4.4 billion pa (adequate) to actual of R1.8 billion pa (completely inadequate)

  • Customer complaints over raw water tariff increases

  • Ineffective and inefficient structure of the sector as a whole

  • Multiple WTE roles – regulator, custodian, planner, constructor

  • Organisation’s technical capacity eroded (even if additional funding made available, the WTE will need commensurate increase in skills and capacity, and improved systems)

  • Less than satisfactory processes for billing, collection, budgeting, expenditure control, and reporting

  • Less than satisfactory financial and asset management systems

  • Negative cash-flow

Key performance areas

Key Performance Areas

Rationale for selecting the kpas

Rationale for selecting the KPAs

  • Qualified audit reports and opinions of the previous financial years

  • Financial management is crucial to the successful functioning the org since it relates to how resources available to the organisation are used.

Main account funding specific to financial management

Main Account: Funding specific to financial Management



  • Review of milestones achieved in the action plan formulated to address financial weaknesses identified by AG

  • Bi-weekly review of specific projects supported by external service providers at dedicated steering Committee meetings.

  • In Year monitoring (financial and non financial reports)

  • Quarterly reports

  • Financial statements as at 30 September

  • Inputs to the Annual Report

Departmental expenditure trends


2008 09 budget vs actual expenditure

2008-09:BUDGET VS Actual Expenditure

Main account reason for underspending


The unspent budget allocation of R505,047 million is mainly due to the under expenditures on the De Hoop Dam project.

  • The Department requested the National Treasury to utilise the funds that could not be spent on this project for other projects (Nandoni and Inyaka water treatment works and the Hluhluwe regional water scheme), but the request was not approved- R265m

  • Unpaid invoices as at 31 March 2009: R227m

    Action taken by the department:

  • The Department requested the National Treasury to roll-over R272,3 million of the underspending to the 2009/10 financial year for the continuation of the De Hoop Dam project.



  • Disbursements of the funds i.r.o De Hoop was not made as a result of the delays in the conclusion of the negotiations to finalise a memorandum of agreement with the 23 different mines.

  • The memorandum records the principles for the sharing of the project cost and was essential to conclude the negotiations prior to the commencements with preparations for project implementation.

  • Against this situation, the DWA requested the NT for approval to utilised the unspent funds for the benefit of other bulk water supply infrastructure projects that were nearing completion.

  • The necessary approval was not received from the National Treasury and consequently these funds remained unspent within the Vote while WTE continued to implement the relevant bulk water services projects using funds meant for recurrent expenditure items.

  • Had the approval from NT been received R262,67 million would have been paid out to the WTE to augment the Capex on other bulk water infrastructure projects.

Challenges identified

Challenges identified

2009 10 earmarked vs un earmarked

2009/10: Earmarked Vs Un- earmarked

Exchequer funding earmarked in 2009 10

Exchequer funding earmarked in 2009/10

  • Thus the total amount earmarked for the 2009/10 financial year for the Department amounts to R3 170 163 000 for the following purposes:

  • Rent of buildings 138 331 000

  • Working for Water 455 724 000

  • Working on Fire 123 608 000

  • Refurbishment of water scheme 30 000 000

  • De Hoop Dam (Phases 2B to 2G) 600 000 000

  • Additional capacity: Internal Audit and Finance 6 000 000

  • Sanitation at school and clinics 350 000 000

  • Regional Bulk infrastructure 611 500 000

  • Operating subsidy (Water Services) 855 000 000

  • Total earmarked funding3 170 163 000

Changes on 2009 mtef baseline

Changes on 2009 MTEF Baseline

Office of the dg 2009 10

Office of the DG2009/10

Branch corporate services 2009 10

Branch: Corporate Services 2009/10

Branch finance 2009 10

Branch: Finance2009/10

Branch policy and regulation 2009 10

Branch: Policy and Regulation 2009/10

Branch national water resource infrastructure 2009 10

Branch: National Water Resource Infrastructure 2009/10

Branch operations regions wrm expenditure to date 31 july 2009

Branch: Operations Regions (WRM)EXPENDITURE TO DATE: 31 JULY 2009

Branch operations regions cont 2009 10

Branch: Operations Regions (Cont)2009/10

Branch operations regions ws expenditure to date 31 july 2009

Branch: Operations Regions (WS)EXPENDITURE TO DATE: 31 JULY 2009

Branch operations regions ws expenditure to date 31 july 20091

Branch: Operations Regions (WS)EXPENDITURE TO DATE: 31 JULY 2009

Main account 2009 mtef allocations


2010 mtef allocation new programme stricture

2010-MTEF Allocation New Programme Stricture

Donor funding r 000

Donor funding (R’000’)

Wte revenue vs expenditure

WTE: Revenue Vs Expenditure

Mtef allocation wte

MTEF allocation - WTE

Mtef allocation wte cont

MTEF allocation – WTE (cont..)

Mtef allocation wte cont1

MTEF- allocation – WTE (cont)

Mtef allocation wte cont2

MTEF allocation – WTE (cont…)

Mtefallocation wte cont

MTEFallocation – WTE (cont)

Finance strategic outputs

I thank you

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