Presentation to the Portfolio Committee:
Water & Environment
METHODOLOGY AND CRITERIA USED ON THE
PERFOMANCE TARGETS/INDICATORS IN DWA
ENTITIES
27 February 2013
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.
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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

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The borrowing powers is the differentiating factor between the
classification

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.
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…as distinct from the Board and Management….
Board and Management Responsibility
• Responsible for ensuring the financial sustainability of the company
through coherent utilisation of company’s 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.
5
Relationships between institutions and DWA
Parliament
Portfolio
Committee
reviews reports
and plans
(hearings, visits)
(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
DWA
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
TCTA
CMA
1
CMA
2
Water
board
1
WB
2
WB
12
WRC
OVERVIEW of WATER BOARDS
THEY DERIVE THEIR MANDATE FROM THE WATER SERVICES
ACT, 1997 AND ARE LISTED AS SCHEDULE 3B UNDER THE
PFMA , 1999.
7
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
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Minister is the sole shareholder
The shareholder management process
• Minister meets with Chairpersons of entities to outline the Strategic Intent which is used to articulate her vision
and her expectations of the entities.
Strategic Intent
•
The DWA Strategic Plan is a guide to entities in terms of vision and strategic direction.
Statement/
DWA Strategic
Plan
Shareholder
Compact
• Minister and The Boards conclude a shareholder compact annually (Treasury Regulation 29.2) .
• Documents the mandated key performance measures and indicators to be attained by the entity in delivering the
desired outcomes and objectives as agreed between the entity Board and the Minister.
• Entities submit corporate plans and budgets annually to Minister and National Treasury at least one month before
the start of financial year (PFMA Sec 52).
• Entities corporate plan must contain implementation details to attain the key performance measures and
indicators outlined in shareholder compact and desired outcomes and objectives outlined in the strategic intent
Corporate Plan
statement.
Performance
Monitoring &
Evaluation
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 .
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Selected Objectives & Indicators for Water
Boards
Performance
Objective
Alignment
Ministerial
Outcomes
DWA
Strategic
Plan
Outcomes
/Impact
Indicators
Measure
1. Water
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 > G
OP1, Ta), b) &
c). OP2, Ta)
So1.1,
1.2&1.3
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 > 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
Quality
Compliance
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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.
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13
14
Risk Management Process
1. Objective setting (what is our mandate, objectives, etc)
2. Risk identification (what can go wrong, what can prevent objectives
being achieved, causes of risk?)
3. Risk analysis (what are the chances of the risk occurring
[LIKELIHOOD], what will be the effect when it occurs (IMPACT]).
4. Risk response (avoid, accept, reduce or share the risk by developing
controls, procedures, etc to reduce risk to acceptable levels).
5. Control activities (policies and procedures are established and
implemented to ensure the risk responses are effectively carried
out).
6. Information and communication (information is captured and
communicated so that people are able to carry out their risk
management duties).
7. Monitoring (ongoing management activities and separate
evaluations).
15
OVERVIEW OF OTHER ENTITIES
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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.
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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
Trans-Caledon Tunnel Authority (TCTA)
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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.
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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 WRC’s 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.
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 WRC’s 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.
WATER RESEARCH COMMISSION (WRC)
cont.
• exercise which should inform the WRC’s 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
• .
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)
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OVERVIEW of Catchment Management Agencies
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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
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DWA’s OVERSIGHT ROLE OVER CMAs
Compliance 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
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Dwa’s 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
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Selected Objectives & Indicators for CMAS
Performance
Objective
Alignment
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
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
Water Resource pollution
prevention
MO A, OP1,
T a)
MO B,OP2, T
a)
MO A > G
OP1, Ta), b)
& c). OP2,
Ta)
SO2.2, 2.5,
2.6,&2.7
Good water quality
Number of interventions
over incidents
number
So1.1,
1.2&1.3
WUAs established
/transformed
Number established
Number
MO A > G
SO 6.5 &
6.6
Establishment/transformat
ion of WUAs
Number
% compliance
Number transformed
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END
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