Auditor General flags unspent NWC project funds and delayed water upgrades

The Auditor General has criticised the National Water Commission’s handling of major capital spending after an audit found that billions of dollars approved for essential water and wastewater projects were not used as planned. The review covered the 2019/2020 to 2023/2024 financial years and examined how the utility managed its capital works programme.

According to the report, the NWC budgeted close to $45 billion for capital projects across the five-year period, but its actual expenditure was below the approved amounts in four of those years. The Auditor General said the shortfall meant some planned work on water, sewerage and treatment infrastructure was postponed or reduced.

The audit also pointed to gaps in how projects were chosen. It said the commission could not properly show why some projects were placed ahead of others, because there was no documented scoring or ranking method to guide decisions when funding was constrained.

Project delivery was another major concern. Of 50 contracts reviewed by auditors, 29, or 58 per cent, were finished after their scheduled completion dates. The delays ranged from three months to more than two years. The report cited several factors, including poor contractor performance, problems getting access to land, slow approvals and funding difficulties.

Auditors also found that a US$3.66 million financial information management system had not produced all the expected benefits, as important modules were still not fully functional because of continuing technical issues.

The report said the NWC did not submit audited financial statements and annual reports for four straight years, breaching statutory requirements and weakening public accountability. It also found that the commission missed key targets for revenue growth and operational efficiency during most of the period reviewed.

The Auditor General made 10 recommendations. They include creating a formal system for ranking projects, strengthening contract management, improving financial oversight and clearing the four-year backlog of audited financial statements. The NWC has accepted all the recommendations.