Rand Water | Integrated Annual Report 2025

Consolidated Annual Financial Statements for the year ended 30 June 2025

INDEPENDENT AUDITOR’S REPORT (CONTINUED)

33. The material findings on compliance with the selected legislative requirements, presented per compliance theme, are as follows:

Procurement and Contract management

34. Some of the goods, works or services were not procured through a procurement process which is fair, equitable, transparent and competitive, as required by section 51(1)(a)(iii) of the PFMA. Similar non-compliance was also reported in the prior year. 35. Some of the contracts and quotations were awarded to bidders based on pre-qualification criteria stipulated in the original invitation for bidding and quotations, in contravention of the 2017 Preferential Procurement Regulation 4(1) and 4(2). Similar non-compliance was also reported in the prior year. 36. Some of the construction contracts were awarded to contractors that did not qualify for the contract in accordance with section 18(1) of the Construction Industry Development Board (CIDB) Act and CIDB Regulations 17 and/or 25(7A). Similar non-compliance was also reported in the prior year.

Consequence Management

37. Disciplinary steps were not taken against some of the officials who had incurred and/or permitted irregular expenditure, as required by section 51(1)(e)(iii) of the PFMA..

Expenditure Management

38. Effective and appropriate steps were not taken to prevent irregular expenditure as disclosed in note 40 to the annual financial statements, as required by section 51(1)(b)(ii) of the PFMA. Strategic planning and performance 39. The corporate plan submitted to the director-general of Department of Water and Sanitation (DWS) designated by the executive authority did not include the affairs of the subsidiaries listed below as required by the section 52(b) of the PFMA: • Rand Water Foundation • Rand Water Services 40. The accounting authority is responsible for the other information included in the annual report. The other information does not include the consolidated and separate financial statements, the auditor’s report and the selected objective presented in the annual performance report that has been specifically reported on in this auditor’s report. 41. My opinion on the consolidated and separate financial statements, and my reports on the audit of the annual performance report and compliance with legislation do not cover the other information included in the annual report and I do not express an audit opinion or any form of assurance conclusion on it. 42. My responsibility is to read this other information and, in doing so, consider whether it is materially inconsistent with the consolidated and separate financial statements and the selected objectives presented in the annual performance report or my knowledge obtained in the audit, or otherwise appears to be materially misstated. 43. I did not receive the other information prior to the date of this auditor’s report. When I do receive and read this information, Other information in the annual report

182

Rand Water | Integrated Annual Report 2025