Auditor General’s performance audit report-‘PUC has many hurdles to surmount’


09-August-2012

Auditor General Marc Benstrong made this comment in a performance audit report on the PUC which was laid before the National Assembly last week.

“I consider it difficult that the PUC can achieve value for money without developing a realistic and strategic plan which underpins its operations,” says Mr Benstrong.

The report however acknowledges the efforts of the PUC in taking measures to introduce a more planned way of working.

Referring to the PUC’s very first Water Master Plan (2008 – 2030) in May 2011, the report says that while being a good first step, the plan covers too large a period and does not make provision for how the PUC will achieve the stated objectives nor does it cater for much needed strategic direction.

“This is a major weakness in a complex organisation which cannot be allowed to fail. The plan alone will prove to be an insufficient driving force, and will not ensure whether value for money is obtained. The PUC has not placed sufficient priority in assessing the business risks that it faces and thus no action plan was produced to manage and seek ways of mitigating those risks,” says the report.

Capacity building has been identified as another matter of concern within the PUC as the senior management is actively involved in, rather than overseeing operations because of shortages of staff in key positions with gaps in the structure and skill sets, notes the report.

The report notes that the PUC has taken steps to improve upon an intermittent supply of potable water to meet continuously increasing demand by purchasing seven desalination units in June 2011 at a cost of $11.55 million.

“However, the PUC failed to ensure that the commissioning of the units was managed properly on time, to a budgeted cost and meeting appropriate environmental standards,” notes the report, adding that the full commissioning of the seven units should have been completed by August 25, 2011.

“To date, one unit (Bel Ombre) still remains un-commissioned. Efforts to achieve successful commissioning and long-term operation of the seven units were only made when the current chief executive came into office in February 2012. The on and off usage of the desalination units has delayed their full and vital operation. Furthermore, the PUC has failed to appropriately maintain the units leading to considerable deterioration in some cases. These shortcomings with the units must be addressed if value for money is to be secured,” the report remarks.

Although PUC has attempted to address the pipe leakage situation, efforts have been found to be insufficient, says the report.

“Lack of funding is partly to blame for limited progress; however there are means which could have been pursued by PUC to alleviate the problem such as the purchase and use of modern, high standard leak detection equipment,” the report suggests.

“As a result of the lack of intervention, ‘Non Revenue Water’ lost through leakage has increased from 15 per cent to 45 per cent in the period of 2009 to 2011.”

Another concern, the report notes, is that approximately 61 per cent of the meters in use are over ten years old, which is beyond their usefulness.

“Given that the meters are old and in dire need of replacement the PUC does not have a complete and accurate picture of the amount of water consumed, jeopardising the company’s maximisation of revenue from water services.

The Office of the Auditor General performs the external audit function of public funds on behalf of the National Assembly. The purpose of the Office of the Auditor General is not just to identify and report upon shortcomings but also to assist and advise managers throughout the government on how to improve financial performance and ensure good governance.

Both the financial and performance audits being undertaken by the Office are geared towards promoting value for money, transparency and accountability within the government.

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