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PRESENTATION TITLE Presented by: Name Surname Directorate Date

PORTFOLIO COMMITTEE OF WATER AND SANITATION ON WATER BOARDS (2013/14 FINANCIAL YEAR) 04 MARCH 2015 Presented by: Chief Executives: Water Boards Date: 04 March 2015. PRESENTATION TITLE Presented by: Name Surname Directorate Date. WATER BOARDS Sedibeng Water;

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PRESENTATION TITLE Presented by: Name Surname Directorate Date

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  1. PORTFOLIO COMMITTEE OF WATER AND SANITATION ONWATER BOARDS (2013/14 FINANCIAL YEAR) 04 MARCH 2015 Presented by: Chief Executives: Water Boards Date: 04 March 2015 PRESENTATION TITLE Presented by: Name Surname Directorate Date

  2. WATER BOARDS • Sedibeng Water; • Botshelo & Pelladrift (Represented by Sedibeng Water); • Bloem Water; • Overberg Water; • Umgeni Water; • Magalies Water. 2

  3. Sedibeng Water Presented by: Chairperson: Mr M Dikoko Acting Chief Executive: Mr RT Takalani 3

  4. Contents Page 4 Introduction Dash Board Area of Supply and Operation Corporate Governance Feedback on issues raised by Portfolio Committee Strategic Alignment and Annual Reporting on the Shareholders Compact Annual Performance Report 30 June 2014 Achievements and Challenges Promotion of PAIA / PAJA Annual Financial Statements 30 June 2014 Capital Expenditure Tariff Consultation 2015/16

  5. 1. INTRODUCTION

  6. 1. Introduction • Sedibeng Water was established as a Water Board in terms of the Water Services Act (Act 108 of 1997) • Section 29 of Water Services Act: • – The primary activity of a water board is to provide water services to other water services institutions within its area of operation. • Section 30 (2) of the Water Services Act: • - Other activities of a water board may include, but are not • limited to- • (a) providing management services, training and other support • services to water services institutions, in order to promote cooperation in the provision of water services; • Section 32 of the Water Services Act: • Duties of water boards • Every water board – must enter into written contracts when performing its primary and other activities.

  7. 2. DASH BOARD

  8. 2. Dash Board

  9. 3. AREA OF OPERATION

  10. 3. Area of Supply and Operation • Sedibeng Water is a Schedule 3B public entity and its core function is to provide water services to its clients, mainly in the form of bulk water, waste water treatment, retail water services, operate and maintenance of water infrastructure; and as an implementing agent in respect of capital infrastructure projects. The service area is spanning more than 100 000 km2 (square kilometers) across three provinces • Free state; • North west; and • Northern cape.

  11. 3. Area of Supply and Operation (cont…) ;

  12. 3. Area of Supply and Operation (cont…)

  13. 3. Area of Supply and Operation (cont…)

  14. 4. CORPORATE GOVERNANCE

  15. 4. Corporate Governance Structure: Shareholder PRESIDENCY Honourable Minister, NomvulaMokonyane Executive Authority National Parliament DWS National Treasury Auditor General Shareholder Compact Reporting Formats Corporate Business Plan Sedibeng Water Board Accounting Authority Annual Report Annual Assessment of Water Boards Quarterly Reports

  16. 4. Corporate Governance: Accounting Authority • Subsequently appointed – 1 September 2014** • Audit and Risk Committee comprises of majority independent and non executive members*** • The board achieved 85% against a target of 80% in respect of board attendance (fiduciary duties) Board and its sub-committees

  17. 5. FEED-BACK ON ISSUES RAISED BY THE FORMER PORTFOLIO COMMITTEE

  18. 5. Feedback on issues raised by Portfolio Committee Issues raised There was no presentation of the annual report for the Portfolio Committee for the 2012/13 financial year; however it is prudent to give progress on the matters raised previously. 1. Board Appointment Sedibeng Water submitted a shortlist of candidates to the Minister of Water and Environmental Affairs for the appointment of the Board. 1.1 Response to the matter raised The Minister of Water and Sanitation appointed the board as at 1 May 2013 – the matter was resolved. 2. Outstanding Debts Matjhabeng LM declared a dispute on their accounts and took the matter to court. The court ruled that the municipality must pay the current account less the disputed portion of the account until the Arbitration is settled. Sedibeng Water has requested the Minister to appoint the Arbitrator in line with the court ruling. 2.1 Response to the matter raised (matter is in progress) Minister of Water and Sanitation is currently engaging with the affected ministry i.e. the Minister of Corporative Governance and Traditional Affairs in order to find a lasting solution with regards to the following: non payment and credit management to the non paying customers; the municipalities; and arbitrating the dispute from her office with the Minister of Corporative Governance and Traditional Affairs.

  19. 6. STRATEGIC ALIGNMENT AND ANNUAL REPORTING ON THE SHAREHOLDERS COMPACT and PREDETERMINED OBJECTIVES

  20. 6. Alignment of Strategic Objectives • Sedibeng Water’s strategic plan is informed by the twelve (12) outcomes that are set out in the National Government MTSF (Medium Term Strategic Framework (2009-2014). • The six (6) MTSF outcomes that are specifically relevant to the Minister of Water and Environmental Affairs. • The five (5) Strategic Performance Outcomes that constitute the basis of agreement between the Minister and the President of South Africa. • The five (5) specific Ministerial Outcomes are set out below: • Enhanced quality and quantity of water resources; • Improve access to basic services; • Maintenance and supply of bulk water infrastructure (to ensure water security); • Effective institutions to address government outcomes; and • Co-operative governance mechanisms designed to achieve government outcomes.

  21. 6. Alignment of Strategic Objectives • Sedibeng Water Strategic Objectives and priorities are as follows: • Appropriate treatment of waste water and supply of potable water; • Ensure viability and sustainability; • Create an environment that is conducive to the growth and retention of skills; • Effective and efficient communications; and • Ensure compliance to all legislations, policies, standards and norms.

  22. 6. Five (5) Year Business Plan EXAMPLE OF THE ALIGNMENT OF THE SHAREHOLDERS COMPACT TO THE MINESTERAL OUTCOMES

  23. 6. Five (5) Year Business Plan EXAMPLE OF THE ALIGNMENT OF THE SHAREHOLDERS COMPACT TO THE MINESTERAL OUTCOMES

  24. 6.1 Alignment of Strategic Objectives

  25. 7. ANNUAL PERFORMANCE REPORT 30 JUNE 2014

  26. STRATEGIC OBJECTIVES AND OUTCOMES AGAINST ACTUAL PERFORMANCE RESULTS FOR JULY 2013 – JUNE 2014 26

  27. STRATEGIC OBJECTIVES AND OUTCOMES AGAINST ACTUAL PERFORMANCE RESULTS FOR JULY 2013 – JUNE 2014 27

  28. STRATEGIC OBJECTIVES AND OUTCOMES AGAINST ACTUAL PERFORMANCE RESULTS FOR JULY 2013 – JUNE 2014 28

  29. STRATEGIC OBJECTIVES AND OUTCOMES AGAINST ACTUAL PERFORMANCE RESULTS FOR JULY 2013 – JUNE 2014 29

  30. STRATEGIC OBJECTIVES AND OUTCOMES AGAINST ACTUAL PERFORMANCE RESULTS FOR JULY 2013 – JUNE 2014 30

  31. 8. ACHIEVEMENTS AND CHALLENGES

  32. 8. 1 Achievements 2013/2014 • Financial Viability and Sustainability • 1.1 Costs were prudently managed within budgetary limits • 1.2 The organization achieved its critical financial ratios and it is a going concern and solvent. i.e. it is financially viable. • 1.3 Cash resources of the organization improved by R87million compared to the previous year • 2. Operational Process Efficiency • 2.1 The plans for the construction of a quality control laboratory at Vaal Gamagara Water treatment plant were approved; construction has commenced and the completion date is the 30 June 2015. This facility will make significant contribution towards improvement of water quality management in this area. • 2.2 The existing laboratory situated in Balkfontein maintained its accredited status after being audited by SANAS (South African National Accreditation Standards) and an international auditor from ILAC (International Laboratory Accreditation Co- operation) • 2.2.1 The organisation complied and maintained the high quality water to its customers.

  33. 8.1 Achievements 2013/2014 (cont…) 3. Human Resources and corporate social investment 3.1 Employment Equity There are notable improvements in appointing people from designated groups especially in executive and middle management. 3.2 Training and Development 3.2.5 Retention of technical staff was kept below 1.88%. 3.2.6 Jobs created a total of 259 both direct and indirect labour 3.3 HIV/AIDS programme 3.3.1 Awareness campaigns were undertook throughout the whole organisation. 3.3.2 Voluntary counseling and testing was made available to employees 3.4 Corporate Social Investments • The organisation sponsored eight (8) fixed sponsor ships i.e. annually and eighteen (18) once off sponsorships.

  34. 8.2 Challenges Financial Viability and Sustainability 1. Cost Recovery and Contractual agreements 1.1 The organisation continues to experience challenges in cost recovery from the Water Services Authorities (WSA) and some Local Municipalities who fail to pay their outstanding account timeously. 1.2 Unwillingness by WSA to enter into long-term contractual obligations with the Water Board which is the Water Service Provider (WSP). Steps taken to-date to address 1.1 and 1.2 The matter was reported to the Minister of Water and Sanitation; in order for the department to take/declare the intergovernmental dispute and possibly exploit together with the Minister of Corporative Governance and Traditional affairs the invoking of Section 216 of the Constitution.

  35. 8.2 Challenges (cont…) • Operational process efficiency 2.1 Raw Water Quality The quality of raw water from the Vaal river is very poor, resulting in high purification cost. • 2.2 Costs Of Maintenance/ Chemical The high costs of maintenance/ chemicals impact on the high expenditure for the organisation, which result in higher water tariff.

  36. 9. PROMOTION OF PAIA AND PAJA 9.1 PROMOTION OF ACCESS TO INFORMATION ACT, ACT 2 OF 2000 (PAIA) 9.2 PROMOTION OF ADMINISTRATIVE JUSTICE ACT, ACT 3 OF 2000 (PAJA)

  37. 9.1 Promotion of Access to Information Act, Act 2 of 2000 (PAIA) The Chief Executive as information officer, enforces transparency and accountability to: • The stakeholders • The public • The employees Have access to relevant information as classified in the act through the following means: • stakeholders interaction, coordinating meetings with water service authority. • providing audited annual reports, news letters magazine on water quality and supply of water, which is accessible to the public. • Water quality and water problems are communicated well in advance through community radio stations.

  38. 9.2 Promotion of Administrative Justice Act, Act 3 Of 2000 (PAJA) • Sedibeng Water is fully compliant with the provision • of PAJA • The Water Board has policies and systems in place that: • Promotes Transparency; • Promotes Fairness; • Promotes Lawfulness; and • Promotes giving of reasons for all administrative actions.

  39. 10. ANNUAL FINANCIAL STATEMENTS 2013/14 Another Unqualified Audit Report 30 June 2014

  40. 10.1 Unqualified Audit Report 30 June 2014

  41. 10.2 Events After the Balance Sheet Date • The Minister of Water and Sanitation issued Gazette Number 38100, disestablishing Botshelo water board and Pella drift with effect for 1 October 2014, thereby extending the operations of Sedibeng water with the areas serviced by former Botshelo water including all the rural areas of NgakaModiriMolema District Municipality and areas serviced by former Pella drift. • The gazette superseded Gazette Number 243 issued on the 1 April 2014 by the former Department of Water Affairs.

  42. 10.3 Statement of Financial Performance for the year ended 30 June 2014

  43. 10.4 Statement of Financial Position as at 30 June 2014

  44. 10.5 Cash Flow Statement Cash reserves increased year on year over the past three (3) years by 38%;

  45. 10.6 Financial Ratios: Target Vs Actual 30 June 2014

  46. 10.7 Profitability Ratios 30June 2014 Due to draught; the raw water purchases were obtained from an expensive source i.e. the Vaal River instead the Sand Canal and mines. Net profit % increased to 13% following implementation of cost containment measures and an increase in revenue.

  47. 10.8 Statement of Financial Position Ratios – Year on Year Compared to the Markets Bench Marks The organistion is highly geared. The debt equity ratio decreased from 11% between 2010 to 2014 to 5%. This is and indication that the organisation is able to service its long term debt and could gain further access to borrowings from the markets. Current ratio year on year is at an average of 1.5:1 compared to the industry norm of 1:1.

  48. 10.9 Investments

  49. 10.11 Actual Performance vs. Budget

  50. 11. CAPITAL EXPENDITURE

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