Johannesburg Water Quarter 14 January 2019-20 Mid Year Report
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JOHANNESBURG WATER STATE-OWNED COMPANY Registration No: 2000/029271/30 1 | P a g e 2019/20 Mid-year Report Approved: 14 January 2020 (In terms of Section 121 of the Municipal Finance Management Act, No.56 of 2003 and Section 46 of the Municipal Systems Act, No.32 of 2000) JOHANNESBURG WATER SOC LIMITED COMPANY INFORMATION: Company registration number 2000/029271/30 Registered Address: 17 Harrison Street Marshalltown Johannesburg 2107 Postal address: P.O Box 61542 Marshalltown 2107 Telephone number: (011) 688 1400 E-mail Address: [email protected] Website: www.johannesburgwater.co.za Bankers Standard Bank of South Africa Limited Auditors The Auditor-General of South Africa Vision To be a water and sanitation utility that works. Mission To provide all the people of Johannesburg with access to quality water and sanitation services by: . Delivering a professional, sustainable, affordable and cost-effective service; 2 | P a g e . Upgrading services in marginalised areas (Pro-poor development); . Creating a customer-focused culture that responds to the needs of citizens customers, and business; . Valuing and developing its employees to build a sustainable capacity; . Safeguarding public health and safety within the City of Johannesburg; . Preserving natural resources for future generations; and . Managing assets and leveraging on technology. Approval of the Report Date of approval: _______________ _________________ _________________________ Name & Surname Signature Financial Director Date of approval: ________________ _________________ _________________________ Name & Surname Signature Managing Director Date of approval: ________________ _________________ _________________________ Name & Surname Signature Chairman of the Board Date of approval: ________________ _________________ _________________________ Name & Surname Signature Member of Mayoral Committee 3 | P a g e TABLE OF CONTENTS CHAPTER ONE: LEADERSHIP & CORPORATE PROFILE ................................................ 7 Section 1: Chairman’s Foreword ........................................................................................... 7 Section 2: Managing Director’s Report .................................................................................. 8 Section 3: Financial Director’s Report ................................................................................... 9 Section 4: Corporate Profile and Overview of the Entity ...................................................... 11 Section 5: Strategic Goals/or Objectives ............................................................................. 13 CHAPTER TWO: GOVERNANCE ...................................................................................... 14 Section 1: Composition, Key Activities & Remuneration of the Board of Directors ............... 15 Section 2: High-level Organisational Structure .................................................................... 23 Section 3: Risk Management .............................................................................................. 24 Section 4: Anti-corruption and Fraud Investigations ............................................................ 29 Section 5: ICT Governance ................................................................................................. 29 Section 6: Compliance with Laws & Regulations ................................................................. 34 CHAPTER THREE: SERVICE DELIVERY PERFORMANCE ............................................. 35 Section 1: Highlights and Achievements ............................................................................. 35 Section 2: Service Delivery Challenges ............................................................................... 40 Section 3: Response to Strategic Direction ......................................................................... 41 Section 4: Performance against Service Standards – Batho Pele ....................................... 41 Section 5: Performance against Predetermined Objectives ................................................. 45 Section 6: Stakeholder Relations and Communications ...................................................... 50 CHAPTER FOUR: HUMAN RESOURCES AND ORGANISATIONAL MANAGEMENT .... 54 Section 1: Employee Remuneration (Total Costs including Executives) .............................. 54 Section 2: Staff Complement and Key Vacancies ............................................................... 54 Section 3: Employment Equity ............................................................................................ 55 Section 4: Skills Development and Training ........................................................................ 57 Section 5: Performance Management ................................................................................. 61 Section 6: Disciplinary Matters and Outcomes .................................................................... 61 4 | P a g e Section 7: Leave & Productivity Management ..................................................................... 62 Section 8: Employee Wellness ............................................................................................ 63 Section 9: Employee Benefits ............................................................................................. 63 Section 10: Occupational Health & Safety Programmes ...................................................... 64 CHAPTER FIVE: FINANCIAL PERFORMANCE AND EXPOSURE ................................... 65 Section 1: Statement of Financial Position and high-level notes .......................................... 65 Section 2: Statement of Financial Performance and high-level notes .................................. 67 Section 3: Cash Flow Statement ......................................................................................... 69 Section 4: Capital Projects & Expenditure ........................................................................... 69 Section 5: Ratio Analysis .................................................................................................... 87 Section 6: Supply Chain Management (SCM) and Broad-Based Black Economic Empowerment (B-BBEE) .................................................................................................... 90 Section 7: Pending Litigations and Possible Liabilities ........................................................ 96 Section 8: Insurance Claims ................................................................................................ 97 Section 9: Amounts Owed By Government Departments and Public Entities ...................... 97 CHAPTER 6: INTERNAL & EXTERNAL AUDIT FINDINGS ............................................ 100 Section 1: Progress on Internal Audit Plan ....................................................................... 100 Section 2: Progress on Resolution of Internal Audit Findings ............................................ 101 Section 3: Progress on Resolution of AGSA Audit Findings .............................................. 101 Section 4: Overall State of Internal Controls ...................................................................... 103 5 | P a g e ABBREVIATIONS AGSA Auditor-General of South Africa AIDS Acquired Immuno Deficiency Syndrome ARC Audit and Risk Committee AWOL Absence Without Leave BAC Bid Adjudication Committee B-BBEE Broad-Based Black Economic Empowerment BEC Bid Evaluation Committee BSC Bid Specification Committee CAPEX Capital Expenditure cfu colony-forming unit CAE Chief Audit Executive CoJ City of Johannesburg CLO Community Liaison Officer COSO Community of Sponsored Organisations DIFR Disabling Injury Frequency Rate DPSA Department of Public Service and Administration dti Department of Trade and Industry DWS Department of Water and Sanitation EAP Employee Assistance Programme EFT Electronic Fund Transfer EPWP Extended Public Works Programme FY Financial Year GDARD Gauteng Department of Agriculture and Rural Development GDS Growth and Development Strategy GFIS Group Forensic Investigation Services GIS Geographic Information System GRAP Generally Accepted Accounting Principles HIV Human Immunodeficiency Virus HOW Head of Works IAD Internal Audit Department ICT Information and Communications Technology IMQS Infrastructure Management Query System ISPPIA International Standards of Professional Practice of Internal Auditing IT Information Technology JMPD Johannesburg Metropolitan Police Department JW Johannesburg Water SOC Ltd KM Kilometres ME Municipal Entity MFMA Municipal Finance Management Act NEMA National Environmental Management Act PAIA Promotion of Access to Information Act PMA Pressure Management Areas PWD People with Disabilities RSSC Revenue and Shared Services Centre SALGA South African Local Government Association SANS South African National Standard SCADA Supervisory Control and Data Acquisition SCM Supply Chain Management SDBIP Service Delivery Budget Implementation Plan SMME Small Medium and Micro Enterprises TOR Terms of Reference VIP Ventilated Improved Pit-Latrine WSP Workplace Skills Programme WWTW Wastewater Treatment Works 6 | P a g e CHAPTER ONE: LEADERSHIP & CORPORATE PROFILE Section 1: Chairman’s Foreword Potable water is crucial for human survival. Water is increasingly becoming scarce partly due to climate change. Its scarcity begins by considering the distribution of water on the planet. Although more rainfall has the capacity to increase freshwater resources, heavier rainfall leads to quick movement of water