Audit Flags NWC Capital Project Delays After $44.92 Billion Budget

The National Water Commission set aside $44.92 billion for water and sewerage works across five financial years, but the utility repeatedly failed to meet the infrastructure goals attached to that spending. The Auditor General says those shortfalls are among the reasons many Jamaicans continue to face poor water and sewerage service.

The findings appear in the Auditor General’s Performance Audit Report of the National Water Commission’s Management of Capital Projects and Capital Budget, which was placed before Parliament on Tuesday. The review covered how the NWC handled capital projects and related spending from 2019/20 through 2023/24.

Auditors pointed to problems in how projects were delivered, ranked for attention, managed under contract, monitored financially and reported to oversight bodies. Over the period examined, the NWC budgeted $44.92 billion for capital works but missed its expenditure targets in four of the five years.

“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 audit said the capital programme reached its highest level in 2020/21 at $12.1 billion, then moved downward in later years. Apart from 2019/20, the commission’s actual capital spending remained below what had been planned, slowing upgrades that were meant to strengthen water and wastewater systems.

The Auditor General tied those project failures directly to what customers experience. “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.

Auditors also criticised the way the NWC chose which projects should get money. The report said the commission did not reliably record the reasons behind funding decisions and could not prove that one consistent ranking system was used across the entity.

That weakness, the Auditor General said, made it harder to determine whether limited funds were being channelled to the projects most needed operationally or most likely to improve service.

Delays were another major issue. Of 50 contracts reviewed, 29 ran behind schedule, with slippages ranging from three months to 29 months. The audit linked the delays to contractor performance problems, unresolved land acquisition matters, legal challenges, slow approvals, funding gaps and projects being started before they were ready.

The report also said the NWC did not always enforce consequences against contractors who failed to finish work within the agreed time.

Financial control was another area of concern. Auditors found that capital budgets were frequently built on revenue forecasts that did not materialise, creating funding gaps and holding up project execution. The report also said the commission’s unpaid obligations rose sharply over the review period, while amounts owed to the NWC did not grow enough to match its increasing commitments.

The audit examined the NWC’s Financial Information Management System, on which about US$3.6 million was spent. It found that multiple modules intended to support financial reporting, procurement, inventory control and operational monitoring were not working as expected.

Because the system could not be fully used, the commission hired another contractor for about US$198,000 to fix the shortcomings.

The Auditor General further reported that the NWC had not submitted audited financial statements and annual reports for four straight financial years, covering 2021/22 to 2024/25. The audit also raised concerns about information sent to the board and the portfolio ministry, saying reports did not consistently account for delays, cost increases or changes to project scope.

In response, the Auditor General recommended reforms to strengthen project delivery, financial discipline and oversight. The proposals include a formal framework for ranking projects, better checks on whether projects are ready to begin, tighter contract management, improved monitoring and reporting of capital works, stronger financial forecasting, and action to clear outstanding audited statements and annual reports.

The report also called for firmer supervision of information technology spending and safeguards to ensure systems are fully functional before final payments are made.

Auditors noted that roughly 70 per cent of NWC infrastructure is more than 40 years old, making effective planning and delivery of capital projects critical to water and sewerage service across Jamaica.