INFORMATION SERVICES: RESEARCH
ANALYSIS OF THE ANNUAL REPORT OF THE DEPARTMENT OF WATER AFFAIRS AND FORESTRY FOR 2002/03
The annual report of the Department of Water Affairs and Forestry (DWAF) for 2002/03 was prepared in terms of the requirements of the Public Services Regulations of 1999 and the Public Finance Management Act. The report basically provides an overview of the Departmentís activities for the period 1 April 2002 to 31 March 2003.
This brief provides an assessment of the Departmentís annual report for 2002/03. The requirements of an annual report are considered and various aspects of the report are discussed.
2. The requirements of an annual report
2.1 Requirements of the Public Services Regulations, 1999
The Public Services Regulations of 1999 require the publication of annual reports as a means "to permit oversight by the public and legislatures". It is stipulated that the following information should be included in an annual report:
2.2 Requirements of the Public Finance Management Act, 1999
The Act requires that an annual report on the activities of a department must be prepared within five months of the end of a financial year. The Act determines that the annual report must:
3. Assessment of the annual report
3.1 Broad compliance
In providing an overview of a departmentís activities, an annual report should deal with the progress in implementing a departmentís line function duties as well as the management of its financial affairs and human resources.
The 2002/03 annual report of the DWAF consists of five parts and two appendices. Part 1 provides a general overview of departmental activities, including information on the ministry, the legislative mandate of the Department, and the public entities reporting to the Minister. Part 2 deals with human resources management, although the information for this section is actually provided in a table format in appendix 1 of the report. Information on the performance of the different departmental programmes is provided in part 3. The financial affairs of the Department are discussed in part 4 and 5 of the report. Part 4 presents the report of the Departmentís Audit Committee, while part 5 includes DWAFís financial management report for the reporting period as well as various reports by the Auditor-General on different financial statements of the Department. In addition to the already mentioned appendix 1, the second appendix provides information on the publications and key documents produced during the reporting period.
Through the different sections of the report mentioned above, the Departmentís annual report does cover the three different aspects of its line function duties, financial affairs and human resources.
3.2 Compliance with the Public Services Regulations of 1999
In general, the report can be considered to be in compliance with the guidelines of the Public Services Regulations for annual reports. However, the following aspects of the report may be deemed to insufficiently address the requirements of the Regulations:
3.3 Compliance with the Public Finance Management Act of 1999
The Act requires that an annual report should present the state of affairs in a department in a fair manner in relation to its business, financial results, performance against predetermined objectives, and its financial position at the end of the financial year concerned. This requirement is subjective in the sense that the manner of fairness is not clearly defined in the Act. However, the information in the annual report is provided in relation to all the aspects mentioned in the Act. The activities of the Department are discussed in relation to the various programmes and sub-programmes, with an indication of actual performance (see part 3 of the report). The report also includes detail on the Departmentís financial position and results, including audited reports from the office of the Auditor-General.
The Act also requires the provision of detail on material and financial losses. Although such information is provided, it is scattered throughout the report. For example, in the financial statements information is supplied on various material losses (see page 118) and irregular expenditure (see page 129). However, the report does not provide an indication of measures taken to address the causes of material losses, and the reasons for the irregular expenditure are not clear. Through the manner in which information on material and financial losses are presented, it is therefore difficult to have a clear grasp of the nature and extent of such losses, and the steps taken to deal with and prevent such losses.
3.4 Comparison with the 2001/02 annual report
The 2002/03 annual report follows a similar format to that of the 2001/02 report. However, the 2002/03 report includes additional information under part 1. These new sections Ė called the State of Water Resources Report and the State of Water Services Report Ė provide useful background data on the availability and use of water resources, the populationís access to basic water supply and sanitation infrastructure and the economic and financial costs of water service provision.
In comparison with the previous report, some information has been re-arranged in the 2002/03 annual report:
Under part 1 of the 2002/03 report the information on the Ministry omits any detail on national projects with which the Ministry was involved. However, the 2001/02 report included a section on national projects that referred to various ministerial activities such as the launching of projects and participation in various events.
Although the information provided on the Departmentís human resources management is similar to that in the previous annual report, it is not in all respects as detailed as in the previous report:
For oversight purposes, the audit reports by the Auditor-General on the financial matters of the Department (part 5 of the report) are of specific relevance. In comparison with the audit report of the previous reporting period, the problems highlighted in the audit report for the year ended March 2002 still occur in the audit report for the year ended March 2003. These problems are related to the fact that complete and proper records of the financial affairs of the trading entities have not been maintained separately from those of the Departmentís budget vote. As a result, the Auditor-General could not conclude on the accuracy and completeness of the inventories disclosed in the financial statements.
Similarly, the Auditor-Generalís report on the 2002/03 water trading account refers to a recurring problem also mentioned in his report on the 2001/02 water trading account, namely the difficulties with the recovery of revenue from municipalities in the Departmentís Limpopo Region. In addition, the Auditor-Generalís report on the 2002/03 water trading account highlights a number of other weaknesses in the Departmentís internal control of this account (see page 146 of the 2002/03 annual report).
3.5 Linkage of the annual report with the strategic plan
The manner in which information in part 3 of the annual report is presented, creates a clear linkage with the statement of strategic objectives in the strategic plan. This is due to the fact that the key outputs and service delivery indicators for each sub-programme is stated, which is then followed by an indication of the actual performance during the reporting period.
In most cases the information provided on the actual performance of sub-programmes includes quantitative data, e.g. the number of reports written or site visits conducted, which facilitates an assessment of a programmeís performance. However, in some instances quantitative data in terms of actual performance is lacking, especially for the reporting on the performance of the sub-programmes of Corporate Services. In other cases it is possible to provide additional data to indicate performance during the reporting period, e.g. under the Social and Ecological Services Sub-programme of the Water Resources Programme.
3.6 Reporting on outcomes sought by other agencies
It is mentioned in the annual report (see page 7) that the inclusion of the two new sections Ė the State of Water Resources Report and the State of Water Services Report Ė is the result of an attempt to address the information needs of other agencies, especially the South African Human Rights Commission (SAHRC). In its recently released fourth annual report on economic and social rights, the SAHRC referred to various aspects of DWAFís reporting to the Commission that are deemed unsatisfactory. The following aspects referred to in the SAHRC report can perhaps also be considered for inclusion in the Departmentís annual report:
The DWAF annual report for 2002/03 provides detailed information on departmental activities, human resources and financial affairs. While the report complies with the reporting requirements set for annual reports, this brief has highlighted certain aspects for which additional information can possibly be supplied.
Department of Public Service and Administration. Public Service Regulations, 1999. Obtained from website address: http://www.polity.org.za/html/govdocs/regulations/1999/reg99-679.html
Department of Water Affairs and Forestry. Annual report 2001/2002.
Department of Water Affairs and Forestry. Annual report 2002/2003.
Department of Water Affairs and Forestry. Strategic plan: multi-year 2002/03Ė2004/05.
National Treasury. The Public Finance Management Act, Act 1 of 1999 (as amended by Act 29 of 1999). Pretoria: Government Printer.
South African Human Rights Commission. Fourth economic and social rights report for 2000Ė2002.C:/MyDocuments/RReactive DWAF AnnualRep03.doc