WASH Workshop Session: Value for Money in the Water, Sanitation and - - PowerPoint PPT Presentation

WASH Workshop Session: Value for Money in the Water, Sanitation and Hygiene Sector

Presentation to CABRI

Presented by: : Iqbal Mahomed Alli| 7 June 2018

Water & Sanitation

1. National Treasury’s role and DWS Vote 2. Water & sanitation infrastructure grants

• Budget trends and challenges

3. Water and Sanitation links with other sectors

• MIG budget trends and challenges

4. WASH MTEF budget allocations and 5. Current fiscal policy stance 6. Conclusion

2

NTs mandate

• Broader NT’s role is that of fiscal policy formulation.
• NT also:

– coordinate intergovernmental financial and fiscal relations. – manages, oversees & monitors public sector budgets through applicable legislations. – Manages the budget preparation process. – Exercise control over the implementation of the annual national budget. – Facilitates the implementation of fiscal legislation.

3

Water & Sanitation Infrastructure Grants

• 1. Bucket Eradication grant
• The eradication of bucket systems in formal areas.

Ended in 2016/17. WSIG and RBIG used to finalise backlogs in NC and FS.

• 2. Regional bulk infrastructure grant
• To develop new, refurbish, upgrade and replace

ageing water & sanitation infrastructure that cuts across multiple municipal boundaries.

• Implement bulk infrastructure to address water

conservation & demand management.

• 3. Water Services Infrastructure grant
• To assist Water User Authorities to reduce water &

sanitation backlogs. DWS administered, direct and indirect allocations to LG

4

WASH Grants Budget Trends

5

Final appropriation Audited

• utcome

Under Spending Final appropriation Audited

• utcome

Under Spending Final appropriation Audited

• utcome

Under Spending Final appropriation Actual Expenditure Under Spending 899 175 281 779 617 396 975 399 962 285 13 114 512 797 831 390 (318 593) - - - Rural Houshehold Infrastructure grant:Direct Grant 65 624 22 649 42 975 48 182 25 539 22 643 - - - - - - Rural Houshehold Infrastructure grant:Indirect Grant 47 624 - 47 624 67 328 19 200 48 128 - - - - - - Regional Bulk Infrastructure grant: Direct Grant

• -
• - - -

1 850 000 1 849 791 209 1 865 000 1 829 002 35 998 Regional Bulk Infrastructure grant: Indirect Grant 3 986 896 3 287 817 699 079 4 857 588 4 857 588

• 3 478 829 3 478 829
• 2 973 359

2 454 957 518 402 Water Services Infrastructure grant: Direct grant 535 608 470 130 - 1 803 932 1 803 932

• 2 844 982 2 830 982 14 000

3 329 464 3 305 237 24 227 Water Services Infrastructure grant: Indirect grant 548 826 319 385 229 441 591 729 546 256 45 473 362 145 297 688 64 457 852 055 852 055 Total over & under spending on grants 1 636 515 129 358

(239 927)

9 019 878 8 441 251 578 627 As from 2016/17 the Rural Household Infrastructure Grant has been merged with the Water Services Infrastructure grant The Bucket Eradication Programme grant ended in 2016/17. From 2017/18 the Water Services Infrastructure grant was used to support the programme in formal areas. Bucket Eradication programme grant 2017/18 R'000 R'000 R'000 R'000 Programmes 2014/15 2015/16 2016/17

Challenges related to WASH grants

1. Underspending by the department and municipalities. 2. Poor technical and financial capacity DWS and LG. 3. Poor project and budget management, leading to cumulative budget shortfalls and accruals. 4. Lack of co-funding from municipalities. 5. Misalignment between raw, bulk and reticulation plans, leading to wastage. 6. Misalignment of sectoral plans: weak nexus across government. 7. Water and sanitation infrastructure grants provides less for O&M, despite high water losses. 8. Use of infrastructure allocations for current expenditure. 9. Poor infrastructure commitment and accrual management.

• 10. Contract management deficiencies.

6

Water & Sanitation: Multi-sector phenomenon

1. Department of Human Settlements

• Urban Settlements Development Grant

The Integrated city development grant has been integrated into the urban settlements development grant to achieve the objectives of the Integrated Urban Development Framework. 2. Department of Basic Education

• Schools Infrastructure Backlogs Grant

Eradication of all inappropriate school infrastructure; provision of water, sanitation and electricity to schools only until 2018/19. 3. Department of Cooperative Governance

• Municipal Infrastructure Grant (MIG)

MIG supports the development of new and the upgrading of infrastructure to provide basic services (water, sanitation, refuse), roads and social infrastructure for poor households in all non-metropolitan

• municipalities. It also allows for the renewal of infrastructure servicing the poor.

Largest infrastructure grant allocation to municipalities. 50% of the MIG is for W&S. Most underspending is on W&S.

• Local government equitable share grant (LEGS)

Share of national revenue that is paid to local government for the provision of free basic services to poor households, funding for institutional capacity & support to weaker municipalities in terms of Section 214 of the Constitution.

7

MIG Expenditure Performance

Challenges related to MIG

1. Inadequate ability to plan for a municipal capital budget (3 year horizon) informed by IDP process which requires the participation of relevant stakeholders such as sector departments. 2. Lack of capacity to manage and monitor MIG projects (PMUs and Sector Departments). 3. High technical staff turnover of municipalities with lower municipal grading 4. Appointing service providers or contractors who cannot deliver. 5. Late appointments and payment of service providers. 6. Council decisions take too long (approval of projects, budgets and appointments). 7. Unnecessary delays in MIG project processes i.e. Technical Reports & EIA 8. Use of MIG funds for operational budget pressures.

9

Water & Sanitation and related grants (capex and

• pex)

10 10

Table 2: Water & Sanitation Local & Provincial Government direct & indirect grants Transfering Department 2018/19 2019/20 2020/21 TOTAL Programme. Purpose R'000 R'000 R'000 Local government equitable share grant (O&M for water) Department of Cooperative Governance 14 761 229 16 362 142 18 121 897 49 245 268 Local government equitable share grant (O&M for sanitation) Department of Cooperative Governance 11 269 052 12 292 246 13 372 492 36 933 790 Municipal Infrastructure Grant Department of Cooperative Governance 15 287 685 15 733 731 16 599 086 47 620 502 Sub-total: 41 317 966 44 388 119 48 093 475 133 799 560 Urban Settlements Development grant Department of Human Settlements 11 306 137 11 880 786 12 534 479 35 721 402 Human Settlement Development grant Department of Human Settlements 18 166 520 18 832 802 20 101 904 57 101 226 Sub-total 29 472 657 30 713 588 32 636 383 92 822 628 Water Services Infrastructure grant: Indirect Bucket Eradication Programme grant :Bulk Department of Water and Sanitation 440 000 440 000 Bucket Eradication Programme grant :Bulk Department of Water and Sanitation 608 175 608 175 Sub-total Bucket Eradication Programme 1 048 175 1 048 175 Regional Bulk Infrastructure Grant: Direct Grant Department of Water and Sanitation 1 957 000 2 066 360 2 180 005 6 203 365 Regional Bulk Infrastructure Grant: Indirect Grant Department of Water and Sanitation 2 440 922 3 038 825 3 207 205 8 686 952 Sub-total: Regional bulk infrastructure grant 4 397 922 5 105 185 5 387 210 14 890 317 Water Services Infrastructure Grant :Direct grant Department of Water and Sanitation 3 481 056 3 669 319 3 870 972 11 021 347 Water Services Infrastructure Grant:Indirect grant Department of Water and Sanitation 642 233 677 556 1 319 789 Sub-total: Regional bulk infrastructure grant 3 481 056 4 311 552 4 548 528 12 341 136 Schools Infrastructure Backlogs grant Department of Basic Education 1 471 826 1 327 048 969 036 2 296 084 Total 79 717 776 84 518 444 90 665 596 254 901 816

Additional funding for WASH

• There are NO additional resources available for allocation over the 2019

MTEF period within the expenditure ceiling set in the 2018 Budget due to fiscal constraint.

• This means that additional allocations to a programme will need to be

funded by reductions in funding for another programme within the department’s budget.

• Should there be a need to invest in WASH, DWS and linked sectors must

reduce expenditure in programmes (repriotise) from 2018 MTEF baselines.

11 11

Thank you

12 12