DESPITE budgeting $44.92 billion for water and sewerage projects over five years, the National Water Commission (NWC) repeatedly fell short of its infrastructure targets. That is one of several weaknesses the auditor general says helps explain persistent water and sewerage service problems affecting several Jamaicans.

The findings are contained in the Auditor General’s Performance Audit Report of the National Water Commission’s Management of Capital Projects and Capital Budget, which was tabled in Parliament on Tuesday.

The audit assessed the NWC’s management of capital projects and capital expenditure between the 2019/20 to 2023/24 financial years and identified shortcomings in project delivery, project prioritisation, contract management, financial oversight and reporting.

According to the auditor general, the NWC budgeted $44.92 billion for capital projects during the review period but fell short of its spending targets in four of the five years examined.

“Across the review period, NWC delivered substantially less capital work than its budgets called for, with implications for water and wastewater service reliability,” the auditor general stated in the report.

The report noted that the capital budget peaked at $12.1 billion in 2020/21 before declining in subsequent years. And, except for 2019/20, actual expenditure consistently lagged behind planned spending, resulting in delays to infrastructure upgrades intended to improve water and wastewater services.

The auditor general linked the findings to the quality of service experienced by customers.

“If you have experienced low water pressure, irregular water supply, or unreliable sewerage services, the weaknesses found in this audit help explain why,” the report stated.

The audit also found weaknesses in the way projects were selected and prioritised for funding. The auditor general reported that the NWC did not consistently document the rationale used to determine which projects should receive funding, and could not demonstrate that a standardised prioritisation framework was applied across the organisation.

According to the report, this limited the ability to assess whether available resources were directed towards the projects with the greatest operational need or potential impact on service delivery.

Project implementation delays also featured prominently in the findings.

A review of 50 contracts found that 29 experienced delays ranging from three to 29 months. The report attributed the delays to factors including contractor underperformance, unresolved land acquisition issues, legal disputes, delayed approvals, funding constraints, and inadequate project readiness before implementation.

The auditor general also found that the NWC did not consistently take action against contractors who failed to complete projects on time.

The audit further found weaknesses in financial management.

According to the report, capital budgets were often based on projected revenues that were not realised, contributing to funding shortfalls and delays in project execution.

The report also found that the NWC’s unpaid bills increased significantly during the review period, while the money owed to the commission was not enough to keep pace with its growing financial commitments.

Auditors also reviewed the implementation of the NWC’s Financial Information Management System, for which approximately US$3.6 million was spent.

The report found that several modules intended to support financial reporting, procurement, inventory management, and operational oversight were not functioning as intended. As a result, the NWC was unable to fully use the system and thus engaged another contractor at a cost of approximately US$198,000 to address deficiencies.

The report also stated that the NWC failed to submit audited financial statements and annual reports for four consecutive financial years, from 2021/22 to 2024/25. It also found weaknesses in the information provided to the board and the portfolio ministry, noting that reports did not consistently explain project delays, cost overruns or changes in project scope.

In response to the findings, the auditor general made several recommendations aimed at improving project execution, financial management and oversight.

Among the recommendations are the establishment of a formal project-prioritisation framework, improved project readiness assessments, stronger contract management practices, enhanced monitoring and reporting of capital projects, improved financial forecasting and measures to address outstanding financial statements and annual reports.

The report also recommended strengthening oversight of information technology investments and implementing measures to ensure systems are fully operational before final payments are made.

According to the audit, approximately 70 per cent of the NWC’s infrastructure is more than 40 years old, underscoring the importance of effective planning and execution of capital projects to support water and sewerage services across the island.