VALUE FOR MONEY AUDIT PRESENTATION ON MANAGEMENT OF DAM CONSTRUCTION AND WATER SUPPLY PROJECTS BY ZIMBABWE NATIONAL WATER AUTHORITY (ZINWA) PRESENTED TO THE SADCO PAC CONFERENCE MAY 8,2012 BY SPEARS T MUTSAU-DEPUTY AUDITOR GENERAL

TO BE THE AUDIT NERVE CENTRE BY 2020 MISSION MISSION  TO EXAMINE, AUDIT AND REPORT ON THE PUBLIC ACCOUNTS OF ZIMBABWE INCLUDING ALL ACCOUNTING OFFICERS, RECEIVERS OF REVENUE AND OTHER PERSONS ENTRUSTED WITH PUBLIC MONEYS AND STATE PROPERTY.

It is a parastatal under the Ministry of Water Resources Development and Management. Its main goal among others is to provide adequate raw and treated water supplies for agriculture, urban industry, mining, households, etc

The audit was motivated by public outcry on the delays by ZINWA to complete its projects countrywide with some remaining uncompleted for several years. Some of the projects had remained uncompleted for over 10 years

The purpose of the audit was to : report on problems affecting the efficient and effective management of dam construction and water supply projects by ZINWA and suggest ways of improving its operations.

The audit was conducted in accordance with  International Organisation of Supreme Audit Institutions’ guidelines on conducting performance audits,  internal guidelines for planning, execution and reporting and follow ups for the Value for Money (VFM) audit(s).

The following methods were used:  Interviews with management, engineers, contractors and other stake holders  Documentary review – project files, financial reports and contract agreements and  Physical inspections - visited 26 project sites for both dam and water supply.

Projects taking to long to complete, Selection of incompetent contractors, Awarding too many contracts to one company, Delays in payment of certificates of contractors, Lack of adequate number of technicians and engineers

It was observed that management were allocating resources to new projects without giving priority to existing ones. This resulted in too many projects being undertaken at the same time, thereby constraining available resources.

 From the interviews, physical inspection and document reviews that were made, it showed that ZINWA failed to make effective selection of contractors in awarding projects.  Failure to select contractors who met all the requirements had a negative effect on the early completion of projects.  The contractors were failing to execute them as expected.

 The audit also revealed that there was shortage of technicians and engineers.  This shortage contributed to the delay in completion of projects due to lack of expertise.  In addition continuity of work was affected as any new engineers had to familiarise with the project first.

 It was also revealed that ZINWA was taking too long to pay some of the contractor’s resulting in work stoppages.  The late payment of certificates resulted in additional costs to the project in the form of penalties on the outstanding amount as well as stand-in charges for machinery on site.  The delays on payment period took as much as 140 days instead of 30 days and work stoppages between 8 to 11 months.

 Contracts were awarded to some companies who already had work in progress that they were failing to complete or were poorly performing.  This meant that the resources for these contractors were overstretched as they moved between projects hence affecting the completion of the projects.

The VFM audit report generated a lot of interest -  the public felt that these provide valuable information on service delivery unlike the financial statements which they do not really understand, and are unable to interpret. VFM reports provide to questions like - “ ARE THE MINISTRIES AND PARASTATALS FULFILLING THEIR PURPOSE IN LIFE”

Comments from the public also indicated that the following questions were answered  what is the role of ZINWA in the Zimbabwean economy?  Why are cities running dry ?  why so many projects were incomplete?

The public also had this to say:  ZINWA was failing to deliver the services.  there was corruption at ZINWA.  there was poor management at ZINWA.

 The management of ZINWA acknowledged the findings.  highlighted the challenges of hyperinflationary environment, underfunding or complete non availability of funds for projects as major reasons for non completion of projects.

 ZINWA management appreciated the audit and indicated that this had assisted them to - 1. Strategize the way forward 2. Identify some latent weaknesses 3. Highlight to other stakeholders the challenges ZINWA was likely to face in project execution and the role they could play to enable the authority to perform better.

 High staff turnover – this affects the time required to complete audit assignments.  Untrained staff members - more on the job training is required and more time will be required to complete an assignment,  VFM audits are expensive to carry out,  VFM is a new concept to the Ministries and Parastatals hence a bit of resistance is experienced at times due wrong perception.

 To address the above problems the Audit Office Act was:  Passed on April 1, 2010  Operationalised on April 1, 2011  To enhance the independence of the Office  Awaiting full appointment of Commissioners Activities Waiting for the above issues to be addressed the Office is doing the following  Contracted consultants to work on;  Strategic plan linked/allied to the new Act  New Office Structure and regulations for the Act  Development of new policies  Set up committees to work with consultants

 Currently there are eight (8) audit projects being carried out by 35 staff members undergoing AFROSAI-E VFM 3 Module Course.  The Office plans to produce and table four reports per year.

THANK YOU