Makwetu flags R469m impairments at Rand Water
Auditor-general Kimi Makwetu has flagged material impairments in the financial statements of Rand Water, one of the country's biggest water boards, to the value of R469m. This would likely result in Rand Water being under pressure in coming years.
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Makwetu identified internal control deficiencies and failure of the board to review its corporate plan and apply Treasury regulations to ensure its corporate plan was properly effected.
Rand Water supplies water to Gauteng, the Free State and North West. The number of people receiving drinking water from Rand Water has increased from 11-million to 19-million in the past decade.
Water and Sanitation Minister Nomvula Mokonyane has been locked in a dispute with the auditor-general over its 2016-17 financial year audit results. Makwetu raised concern about a drop in the value of assets under Rand Water's ownership following its takeover of Bushbuckridge, as had been directed by Mokonyane. "Material impairments to the amount of R469m were incurred as a result of past default experience. A significant part of this impairment relates to the Rand Water Mpumalanga segment," he said.
The board had failed to review its corporate plan adequately. "Management did not correctly apply the requirements of the Treasury regulations to ensure that the five-year corporate plan included performance objectives, indicators and targets that covered at least a three-year period," he said.
Rand Water CE Percy Sechemane said the board had carried out the takeover under the directive of the minister and that the cost of the impairment would be recovered from the government.
Source: Business Day
Source: I-Net Bridge
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