Government’s multibillion-rand War on Leaks project, which was to train 15,000 unemployed youth as plumbers to fix leaking countrywide taps, has been referred to the Special Investigating Unit.
A scathing internal department of water and sanitation memo, written to minister Lindiwe Sisulu in April, about alleged wasteful expenditure of R3.3bn on the project, forms the backbone of the complaint laid with the SIU.
The April memo was written by Susan Shabangu, the ministry’s disciplinary advisory committee chairperson.
The memo raises serious concerns about senior department officials’ failure to take action over two damning internal investigation reports into the project.
In her memo, Shabangu calls for criminal charges to be laid against now former director-general Margaret Diedericks, who she describes as a “central figure in this unauthorised project”. Diedericks has told Sunday Times Daily she was unaware of the claims against her.
Launched in 2015 by then water and sanitation minister Nomvula Mokonyane, the project, which involved Rand Water, was to train youth as plumbers and artisans and find them and jobs fixing leaking taps in communities across SA.
Shabangu’s memo, however, reveals there was never an approved plan or budget for the project, with senior department officials allegedly ignoring National Treasury instructions to cease it, and flouting the Public Financial Management Act (PFMA).
The memo states that instead of training 15,000 people, since 2015 only 1,865 artisans and 4,671 water agents have been trained at a cost of “R500,000 per trainee”.
Shabangu states the project needs to be referred to the SIU for further investigation “due to the scale and complexity”.
She said key findings from a departmental 2019 risk management report and a 2020 internal audit report were that there was “unauthorised, irregular, fruitless and wasteful expenditure incurred” during the project.
The two reports were based on internal investigations into apparent noncompliance with legal financial management laws needed for the project to be implemented and from an audit on water-use efficiency.
“The reports found that the then DG commenced implementation of the War on Leaks project immediately after the directive of the minister at the time.
“The DG signed contracts and appointed … a service provider and the training authority. Those appointments and approvals were concluded without following the supply chain management and other legal financial management prescripts required for such a project.
“Since April 2015, the reports found that no budget or funding was allocated for the project in the DWS budget, resulting in unauthorised and irregular payments.”
Shabangu said no records or information existed as to whether the DG applied for approval condoning unauthorised or irregular expenditure in terms of the PFMA. Nor was there approval for the project from National Treasury.
“A few officials in DWS, the implementing agency and the service provider transgressed various legal financial management prescripts … during implementation of the project.
“[The] internal audit report found 30 different and major transgressions in the project. The transgressions are around noncompliance with the legal financial management prescripts.”
Shabangu said despite National Treasury advising the department in December 2016 to stop the project, the advice was ignored.
“The estimated costs at completion of this project was R4.2bn, [which was] to be spent over a five years. The target was to train 15,000 unemployed youth as plumbers and other artisans, to be employed at the local level on completion of the training, to eradicate water loss through leaking taps.
“Records show that during the first two phases [2015 and 2016] only 1,865 artisans and 4,671 water agents were trained, or are at present finishing training. There is no record of their subsequent placement or employment, at a local level or anywhere else. The project was then discontinued at the end of phase two.”
She said a financial report by the department’s acting chief financial officer “records that War on Leaks project incurred an expenditure of R3.3bn from April 1 2015 to date.
“This expenditure was incurred without an approved budget. Out of the amount spent, R2.3bn, about 70% of the budget, was irregular expenditure and R348m was unauthorised expenditure.
“In summary, R3.3bn was spent over a five-year period to train 1,865 artisans and 4,671 water agents, translating to at an average cost of more than R500,000 per trainee.”
R3,3bn was spent over a five-year period to train 1,865 artisans and 4,671 water agents, translating to at an average cost of more than R500,000 per trainee.
Shabangu said there were immense challenges around the investigations, with the Risk Management Unit met “with a lot of resistance and obfuscation.
“The unit was not given free and complete access to information and documentation … No aspect of the risk management report was ever implemented by the department.
“It is legally feasible to discipline officials for implementation of an unauthorised project, because their actions or inaction caused huge amounts of unauthorised, irregular and wasteful and fruitless expenditure.”
Shabangu recommended the minister refer the two internal reports to the SIU for investigation, the SIU be requested to recover any lost monies, criminal charges be laid against Diedericks for allegedly violating the PFMA, and disciplinary charges be laid against officials.
“The War on Leaks project investigation has been difficult to … account for, because of the lack of relevant documentation … and for its seemingly complete lack of compliance with almost every legal financial management prescript applicable to such a government project.”
SIU spokesperson Kaizer Kganyago confirmed they had received the allegations and had identified the need for an investigation.
“The proclamation has been drafted and submitted to the presidency.”
Department spokesperson Mpumzi Zuzile said the minister had begun to implement the committee’s recommendations.
“Last month the department suspended six senior managers with a number facing disciplinary hearings.”
With regard to criminal charges against Diedericks, Zuzile said the department was awaiting the SIU to furnish it with its findings and any recommendations.
“When the minister took over the portfolio one of her major concerns was to root out corruption and irregular expenditure within the department. The advisory committee’s memo and the approaching of the SIU is part of her strategy to address corruption and criminality within the department. She will not sit back and defend criminality.”
Diedericks said she was unaware of the memo, the internal reports or their findings and recommendations.
“I reserve my comment on the contents of these.”
She said as far as she was concerned the principals for the project were sound.
“It was developed because of substantial water losses from leaking pipes and taps, with unemployed youth identified to fix these leaks.”
In regards to the Treasury’s instruction to cease the project, she said she was unaware of it.
“I left the department in June 2016. In my time there was no such instruction from Treasury. When an implementing agency is appointed, the DG is then at arm’s length distance.”
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