Committee Five-year Strategic Plan , Auditor-General remuneration issues, Chairperson's report on meetings with Auditor-General South Africa

Standing Committee on Auditor General

13 May 2010
Chairperson: Adv M Masutha (ANC)
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Meeting Summary

The Chairperson tabled a letter from the Remuneration Committee of the Auditor-General of South Africa (AGSA), relating to the salary of the Auditor-General. The Chairperson suggested that a smaller task team be established to consider the letter and make recommendations to the Standing Committee and he asked that parties submit their nominations. This multiparty task team would need to consider the information provided, solicit additional information, note the Annexures, benchmark the environment, and give consideration to the total package and whether the current arrangements were in compliance with the legislation. The task team may need to meet during recess and should have time frames within which to report back.

The Chairperson tabled his report on his attendance at, and matters considered by the Auditor-General of South Africa (AGSA’s) Quality Control Assessment Committee. This oversight body assisted the Auditor-General and his Deputy to fulfil their responsibilities in implementing a quality control system, and also had reviewed the disciplinary processes and appropriateness of the disciplinary codes, and had considered the overall analysis and possible root causes of the review results for 2009/10. The Chairperson also reported that he had attended a meeting on 20 April with senior managers of AGSA, followed by an awards ceremony and a workshop. The current campaigns were striving to promote clean audits.

The Chairperson finally noted that the Committee’s Five Year Strategic Plan was still in draft, since the facilitator had been on leave since the workshop had been held. Members had received the latest draft only the previous day and needed time to consider it. Members commented that administrative backup was urgently needed and suggested ways to improve communications in the Committee.

Meeting report

Auditor-General remuneration: consideration of document
Mr M Steele (DA) referred to the submission made in regard to the remuneration of the Auditor-General. He said that the Standing Committee needed to establish a process, as the document submitted was inadequate for the purposes of real engagement.

The Chairperson noted Mr Steele’s concern and requested that this matter be formally placed on the agenda for discussion.

The Chairperson asked the Committee Secretary to read the contents of the letter, with its annexures regarding the AG’s salary, to the Committee. He noted that although this letter was addressed to “the Chairperson” it must be considered by the entire Committee, who must make a decision on it.

The Chairperson, however, proposed that the Committee should set up a smaller task team to consider the correspondence received from the Remuneration Committee of the AG. The task team would promote interaction between the Standing Committee and the Remuneration Committee of the AG. That task team should also solicit additional information. He would refer it to be a multiparty task team, and in this regard he noted that the Committee included representatives from the African National Congress (ANC), the Democratic Alliance (DA), the Congress of the People (COPE) and the Inkatha Freedom Party (IFP).

Mr Steele (DA) noted that the Chairperson’s proposal was technically correct, and, even if the Committee did not currently have a quorum, it could still recommend the establishment of a multiparty task team. Such a body would have to report to the full Committee in any event to get its mandate.

Mr Steele emphasised the importance of noting Annexures A and B to the task team and the Standing Committee.

Mr J Matshoba (ANC) agreed with Mr Steele. He thought that time frames should be set for the task team’s work.

Mr Matshoba also noted a small correction on point 5.1 on the document, which should read ‘implementation of’.

The Chairperson said that all the parties needed to submit names of suitable Members for the task team. He suggested that he would be willing to be the representatives for the ANC. However, he added that representative issues would not be at the fore, since the task team was not going to be a decision making body, but rather a technical and advisory body. Once he had received the nominations, he would set up the task team.

Ms S Tsebe (ANC) agreed with the Chairperson. However, she emphasised the importance of assigning a time frame to the nomination process. She suggested that all names of nominees for the constituency of the task team should be submitted to the Chairperson’s office by 12:00 on 18 May. This matter deserved to be treated urgently.

The Chairperson noted the challenges faced by the Committee pertaining to time frames. He stated that he would not be in Parliament from 24 to 28 May, as he would be dealing with the appointment of new magistrates at the Magistrate’s Commission.

Mr Steele began to suggest that Committee Members take some time during a conference on 25 and 26 May to meet, but was reminded that the Chairperson would not be present.

The Chairperson noted that he would be at Parliament on 26 May 2010, for the voting of Schedules of the Budget.

Mr Steele suggested that, given the urgency, the Committee might have to schedule a meeting during the Parliamentary recess period.

The Chairperson said that the meeting might even take place outside Cape Town. He said that the Committee needed to agree on developing a framework. He noted that the AG’s letter had made the point that the manner in which the AG’s salary was calculated did not take certain matters into account, especially benchmarking of the environment in which the AG operated. He said that people in office had remarked that the AG himself was a great asset, and suggested that all attempts should be made to keep him in that position, despite the highly competitive environment. His level of skills would attract “serious money” in the marketplace generally. He noted that the salary alone had been considered, and not the total package. The task team would have to look at all aspects of the matter and objectively assess and recommend whether the current arrangements were fully compliant with the relevant legislation.

Mr Matshoba suggested that the Committee look at the salaries of all AGs.

The Chairperson noted that that was an issue the task team could engage on.

Mr Steele asked for confirmation of the cut-off date for nominations of task team members and suggested that the members liaise by phone.

Chairperson’s reports
The Chairperson tabled his report on the Auditor-General of South Africa (AGSA’s) Quality Control Assessment Committee. An assessment was done annually to ascertain whether the AG’s offices were credible. The Quality Control Assessment Committee was an oversight body that assisted the AG and the Deputy AG in the fulfillment of their responsibilities for the implementation of a quality control system. Its responsibilities included doing quality control reviews in accordance with the International Standards on Auditing (ISA).

The Quality Control Assessment Committee had had its annual meeting on 28 April 2010. It had reviewed the results of the disciplinary process taken with regards to poor performance during the 2008/2009 performance year. It had also considered the appropriateness of AGSA’s disciplinary codes.

The Quality Control Assessment Committee had also embarked on positive recognition for excellent results and approved the quality control review process that needed to be followed for 2010/11.

The status of firm level review readiness of the AGSA, as well as feedback from the Difference of Opinion Committee meeting was noted.

The Chairperson said that the Quality Control Assessment Committee had also considered the overall analysis and possible root causes of the review results for 2009/10.

The Chairperson also noted that he had attended a meeting on 20 April with all the senior managers of the AG’s office. This meeting occurred every two years, to reflect on the progress and work performance of the AG’s office. It was followed by an awards ceremony and a workshop. The Chairperson had delivered a presentation on the reinforcement of the relationship between Parliament and the AG. He felt that much had been achieved at the workshop. He noted that the current campaign was one that was aiming to promote clean audits.

Committee Strategic Plan discussions
The Chairperson said that the Strategic Plan was still in draft form and that a facilitator had been appointed by the Committee Section of Parliament to deal with issues around the plan.  There had been a workshop, but the facilitator had gone on leave the day after this workshop.

The Chairperson noted that the Standing Committee was having problems in securing the attendance of the facilitator, and this, and other matters, were impacting negatively on the Committee’s ability to finalise the document.

Time constraints were also a problem. Committee Members had received the first draft only two weeks earlier. Committee members had only received the current draft on the previous day, and needed more time to peruse it, as it was a very technical document. The Chairperson assumed that the final document would be made available during the recess. He noted that the text needed to be finalised before it could be tabled in Parliament.  

The Chairperson said that it was very important to adopt the Strategic Plan as, without it, the Committee would have no point of reference from which to work.

Ms Tsebe emphasized administrative backup as vital. She suggested methods for improvement of communication in the Committee.

The Chairperson said that sometimes Members committed themselves to attending meetings but then failed to attend. He was not sure if Members would be telephonically available. The best that the Committee could do would be to find out and confirm a date that would suit most Members in the following week to discuss the issues further.

The meeting was adjourned.


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