Presentation to the Portfolio Committee: Water

1
Presentation to the Portfolio Committee Water
Environment
METHODOLOGY AND CRITERIA USED ON THE PERFOMANCE
TARGETS/INDICATORS IN DWA ENTITIES
27 February 2013
2
Policy and legislative mandates

• The key government policies pertaining to water
  are set out in two policy papers as follows the
  National White Paper on Water Policy (1997) and
  The Strategic Framework for Water Services (2003)
  
• The legislative mandates follow from these
  policies and are set out in three pieces of
  legislation The National Water Act (Act 36 of
  1998) , The Water Services Act (Act 108 of 1997),
  The Water Research Act
• In terms of the current policy and legislative
  mandates, it is the Minister who is the custodian
  , policy maker, and regulator for the water
  sector.
• The Minister is also a shareholder in all DWA
  entities listed under the Public Finance
  Management Act.

3
PFMA CLASSIFICATION OF STATE ENTITIES
Classification Definition INSTITUTIONS
Schedule 2 Major Public Entities (Operates under business principles) TCTA
Schedule 3A National Public Entities (Fully or substantially funded through the public funds, tax levy imposed through legislation or water use charges ) Inkomati CMA Breede-Overberg CMA Water Research Commiission Kobwa
Schedule 3B National Government Business Enterprises (Operates under business principles with a borrowing limit) 12 Water Boards
UNCLASSIFIED WATER USER ASSOCIATIONS IRRIGRATION BOARDS 179

4
The Minister as a Shareholder has distinct
responsibilities
Shareholder Responsiblity

• Appoint all Board members .
• Conclusion of binding shareholder compacts.
• Approval of Strategic Plans and Corporate
  Plans/Annual Performance Plans.
• Issuing of a strategic intent statement.
• Approval of significant material transactions.
• Recommendations of borrowing limits to National
  Treasury.
• Access information to monitor and evaluate
  performance.
• Enforce accountability and take remedial action.

5
as distinct from the Board and Management.
Board and Management Responsibility

• Responsible for ensuring the financial
  sustainability of the company through coherent
  utilisation of companys assets
• Responsibility for development and implementation
  of the strategy
• Development of strategic and business plans and
  subsidiary plans. (Financial, risk management,
  operational, marketing, etc).
• Appointment of management and staff.
• Management of all aspect of operations.
• Development of detailed company policies (e.g.
  remuneration, procurement, etc) within guidelines
  defined by practice notes and implementation of
  company practice in adherence to the policy.

6
Relationships between institutions and DWA

1. Oversee institutional establishment
2. Oversee governance (manage board appointment
   processes, training etc.)
3. Oversee shareholder compact
4. Oversee business plans, quarterly performance
   reports and financial statements etc.

Minister
Parliament
DWA
Portfolio Committee reviews reports and plans
(hearings, visits)
Minister appoints boards approves shareholder
compacts, Corporate Plans Annual Reports
Public institutions report to the public and
Parliament through Annual Reports and Annual
Financial Statements and to the Department with
quarterly performance reports
WB 12
WB 2
CMA 2
CMA 1
Water board 1
TCTA
WRC
7
They derive their mandate from the Water Services
Act, 1997 and are listed as schedule 3b under the
PFMA , 1999.

• OVERVIEW of WATER BOARDS

8
Oversight role over WBs
List of Documents submitted to the Minister Legislation
Policy Statements Sec 39 of Water Services Act, 1997
Shareholder Compacts Treasury Regulation 29.2
Corporate Plan projection of revenue, expenditure borrowings Sec 52 of PFMA, 1999 Treasury Regulation 29.1
Business Plans Sec 40 of Water Services Act, 1997
Quarterly Reports Treasury Regulation 29.3.1
Annual Reports Sec 44 of Water Services Act, 1997 Sec 55(1)(d) 65 of PFMA, 1999
Tariff Increases Sec 42 of MFMA, 2003
Financial misconduct procedures report Treasury Regulation 33.3.1
Materiality Significance Framework Treasury Regulation 28.3.1

8
9
Minister is the sole shareholderThe
shareholder management process
Quarterly reporting Annual Reports including
financial statements submitted by end of November
every year. Tariff Submissions to Parliament by
15 March every year. Reporting to Portfolio
Committee once a year .
10
Selected Objectives Indicators for Water Boards
Performance Objective Alignment Alignment Outcomes /Impact Indicators Measure
Performance Objective Ministerial Outcomes DWA Strategic Plan Outcomes /Impact Indicators Measure
1. Water Quality Compliance MO A, OP1, Ta) c). MO B, OP2, Ta) SO 2.5 3.4 Water quality standards met Test results, SANS 241 compliance
2.Non Revenue Water MO A, OP1, T a) MO B,OP2, T a) SO2.2, 2.5, 2.6,2.7 Reduced levels of unaccounted for water (UAW) Water lost as a of total water produced
3. Reliability of supply MO A gt G OP1, Ta), b) c). OP2, Ta) So1.1, 1.21.3 No unplanned interruptions to supply exceeding 24 hours number of days supply disrupted divided by total number of possible supply days
4. Financial Reporting Compliance MO A gt G SO 6.5 6.6 unqualified audit report Annual external audit Qualified/ Unqualified
13. Increased Access to Services MO A, B D OP1, Ta), b) c). OP2, Ta) SO 1.1,1.2, 1.3,2.2 and 4.1 Contribution to national objectives CAPEX spend /projects CAPEX spend or number of expansion projects
11
Rationale and criteria for selecting indicators

• Ensure that entities are aligned to government
  objectives to support and drive development in
  key sectors.
• Mobilisation of additional financial resources
  required to support developmental strategy.
• Roll out of key infrastructure to enable economic
  and social development
• Indicators to support building a solid
  institution run on business principles
  -financial viability and good governance.

12
(No Transcript)
13
(No Transcript)
14
(No Transcript)
15
Risk Management Process

• Objective setting (what is our mandate,
  objectives, etc)
• Risk identification (what can go wrong, what can
  prevent objectives being achieved, causes of
  risk?)
• Risk analysis (what are the chances of the risk
  occurring LIKELIHOOD, what will be the effect
  when it occurs (IMPACT).
• Risk response (avoid, accept, reduce or share the
  risk by developing controls, procedures, etc to
  reduce risk to acceptable levels).
• Control activities (policies and procedures are
  established and implemented to ensure the risk
  responses are effectively carried out).
• Information and communication (information is
  captured and communicated so that people are able
  to carry out their risk management duties).
• Monitoring (ongoing management activities and
  separate evaluations).

16
OVERVIEW of other entities
17
Trans-Caledon Tunnel Authority (TCTA)

• Established in 1986 in terms of the National
  Water Act, is categorized as a Schedule 2 major
  public entity and is subject to the PFMA.
• TCTA is engaged in project financing and
  implementation together with being a specialized
  liability management entity. It finance and
  implements bulk raw water infrastructure in a
  cost effective manner to benefit water consumers.
• Projects under management by the TCTA
• Lesotho Highlands Water Project Debt under
  management is R16.8 billion, paid for from
  revenue generated from water sales. Loan raised
  on explicit government guarantees.
• Berg Water Project Debt under management is
  R1,6 billion, paid for from revenue generated
  from water sales, and loan raised by implied
  government guarantees.

17
18
Trans-Caledon Tunnel Authority (TCTA)

• Vaal River Eastern System Augmentation Project
  Debt under management is R2,7 billion, paid for
  from revenue generated from water sales, and loan
  raised by implied government guarantees.
• Four new mandates have been issued to the TCTA
  including the Olifants River Water Resources
  Development Project Phase 2, the Komati Water
  Scheme Augmentation Project, the Mooi-Mgeni
  Transfer Scheme, the Mokolo-Crocodile Water
  Augmentation Project, Metsi Bophelo Borehole
  Project and Acid Mine Drainage.

18
19
Trans-Caledon Tunnel Authority (TCTA)
20
Water Research Commission (WRC)

• Established in terms of the Water Research Act,
  1971
• Plays an important role in water research by
  establishing needs and priorities for research,
  stimulating and funding water research according
  to priority, promoting effective transfer of
  information and technology and enhancing the
  knowledge and capacity of the water sector.
• Key research areas includes
• Water resource management
• Water linked ecosystems
• Water use and waste management
• Water utilization in agriculture
• WRC mainly derives its income from a levy on raw
  water tariffs which is currently 4.60 cents a
  cubic meter for domestic use. It also obtains
  leverage income.

20
21
WATER RESEARCH COMMISSION (WRC)

• The process conducted to develop the Corporate
  Plan was characterised by three important
  elements.
• Firstly, it has been an on-going and iterative
  process.
• Secondly, it has been consultative,
  incorporating discussions and considerations from
  DWA and WRC stakeholders in various forums.
• Thirdly, it has employed both a forecasting and
  back-casting approaches to the development of
  strategic objectives, involving an analysis of
  the WRCs current positioning in the sector as
  well as a reflection on developments and
  potential developments in the external and
  organisational environment that could have an
  impact on the five-year planning cycle. All of
  this been has been under the guidance of the WRC
  Board.
•  

22
WATER RESEARCH COMMISSION (WRC) cont.

• The formal planning process commenced in May 2012
  with a corporate planning workshop that included
  the operationalization of the WRC Knowledge Tree
  as well as the following elements
• Business management process analysis.
• The internationalisation of the WRC and its
  implications.
• A focus on improving the WRCs impact with a
  focus on bottom of the pyramid (BOP)
  interventions, coupled with closing the
  innovation chasm.
• The introduction of the WRC Lighthouses in the
  five-year plan. These are key flagship projects
  or programmes that would become trailblazers for
  the WRC and its stakeholders, both internally and
  externally.

23
WATER RESEARCH COMMISSION (WRC) cont.

• exercise which should inform the WRCs core
  business.
• The top four Lighthouses proposed include
• the green village concept
• water governance
• water-sensitive urban design with a focus on
  wastewater
• the water-energy-nutrition/food nexus.
• Climate change interventions
• .

24
Water Research Commission (WRC)

• WRC reports progress against its key performance
  areas in terms of new projects, finalised
  projects and new innovations as follows
• Knowledge generation
• Knowledge dissemination
• Workshops
• Issues of Water Wheel
• Technical and policy briefs
• Issues of Water SA
• Capacity building (number of students)
• Expansion of the Fund Management System
  (including short term research projects)

24
25

• OVERVIEW of Catchment Management Agencies

26
Enabling legislation

• Catchment Management Agencies (CMAs) are
  established in terms the National Water Act, Act
  36 of 108 of 1998 (Chapter 7)
• CMAs are subject to the Public Finance Management
  Act (PFMA) and related Treasury regulations
  categorized as a Schedule 3A entity service
  delivery public entity
• The purpose of the CMA is to delegate water
  resource management to the catchment level and to
  involve local communities in the decision-making
  processes.
• Broadly, the initial role of a CMA is articulated
  in the Act as
• managing water resources in a WMA,
• co-ordinating the functions of other institutions
  involved in water related matters and
• involving local communities in water resource
  management

27
DWAs OVERSIGHT ROLE OVER CMAsCompliance
monitoring
List of Documents submitted to the Minister Legislation
Annual Report Audited Financial Statements PFMA Sec 55 (d)
Business Plans TR 30.1.1 and Schedule 4 of the National Water Act, 1998
Budget of estimated revenue expenditure for the year PFMA Sec 53(1)
Quarterly Reports on actual revenue expenditure for the quarter projection of expected expenditure revenue for remainder of financial year TR 26.1 TR 30.2.1
Financial misconduct procedures report TR 33.3.1

27
28
Dwas oversight responsibilities

• Schedule 4 Part 4
• Institutional planning outlines the
  responsibilities of the CMA GB and staff,
  particularly in terms of the CMA Business Plan,
  General matters to be included in business plans,
  which is the main tool for formal oversight,
  including
• Organisational / institutional matters
• Governance
• Functions
• Financial (PFMA) requirements
• Transformation and HR
• EE policy, etc (organ of state and must comply)
• Schedule 4 Part 5 outlines the monitoring and
  intervention by the Minister
• Schedule 4 Part 6 outlines records and reports
• The catchment management strategy provides the
  mechanism to influence the vision, priorities and
  direction that the CMA takes.
• The catchment management strategy is most
  important instrument for the integrated
  management of water resources in a Water
  Management Area as well as an oversight tool for
  DWA to audit the CMA

29
Selected Objectives Indicators for CMAS
Performance Objective Alignment Alignment Outcomes /Impact Indicators Measure
Performance Objective Ministerial Outcomes DWA Strategic Plan Outcomes /Impact Indicators Measure
Validation and Verification of water use MO A, OP1, Ta) c). MO B, OP2, Ta) SO 2.5 3.4 Updated and completed registrations Number of validations and verifications completed Number
Water quality monitoring MO A, OP1, Ta) c). MO B, OP2, Ta) SO 2.5 3.4 Enhance and maintain water quality Test results, SANS 241 compliance
Water Resource pollution prevention MO A, OP1, T a) MO B,OP2, T a) SO2.2, 2.5, 2.6,2.7 Good water quality Number of interventions over incidents number
Establishment/transformation of WUAs MO A gt G OP1, Ta), b) c). OP2, Ta) So1.1, 1.21.3 WUAs established /transformed Number established Number
Establishment/transformation of WUAs MO A gt G SO 6.5 6.6 WUAs established /transformed Number transformed
30
End