The meeting was an opportunity for the Auditor-General of South Africa to brief the Committee on its Strategic Plan and Budget for 2011 – 2014. The Auditor-General has a constitutional mandate and, as the Supreme Audit Institution of South Africa, it exists to strengthen South Africa’s constitutional democracy by enabling oversight, accountability and governance in the public sector through auditing, thereby building public confidence. The delegation presented an overview of the AGSA commitments, organisational environment, an overview of each goal and parts of the budget for 2011/12.
Some of the initiatives of its visibility and leadership goal included: stakeholder interaction programmes, which were monitored and assessed at business unit level every quarter; enhancement and timeous updating of the Audit Stakeholder Management Information System; extending the stakeholders’ capacity to optimally utilize its reports; cost-effective stakeholder surveys; and the AGSA 2011 Centenary. Some of the initiatives of the ‘lead by example’ goal included: aligning the organization with the King III guidelines on risk management; modernization of the environment, including technology and processes; ongoing implementation of the Go-Green programme; engagement with all relevant stakeholders on AGSA broad-based black economic empowerment (BBBEE); corporate social initiative (CSI) plan focusing on the rural schools programme; implementation of a high-level three-year plan on enterprise development; implementation of the BBBEE plan; and focusing on preferential procurement, employment, management control and skills development.
Members of the Committee raised questions on, among other issues, what would be happening once the municipal changes take place; the fact that a number of appointments and contract were finalised in the last few days or weeks of an administration; what kind of training was given to new recruits; how would the AG ensure that leadership co-operates with the roadshows; who was part of the special workshops; when would the special investigation reports be made available to the Committee; and how often visibility and stakeholder surveys were conducted.
AGSA Strategic Plan and Budget 2011 - 2014 presentation
Mr Terence Nombembe, Auditor-General of South Africa stated that the Auditor-General was committed to discharge its mandate in such a way that it provides value and benefits to the citizens of the country and to lead by example through being a model organization. The AGSA remained committed to the following goals in order to impact positively on all aspects of public sector accountability:
▪ ensuring simplicity, clarity and relevance of the messages contained in all its report;
▪ improving the visibility of its leadership through clear communication in championing the implementation of audit recommendations;
▪ focusing on the funding model with a view to stabilizing its margins and cash flow situation;
▪ strengthening the human resources strategy, with particular emphasis on the comprehensive trainee auditor scheme; and
▪ leading by example on matters of risk management, internal controls, transformation and quality and timeliness of its products.
Some of the initiatives of the first goal of ensuring simplicity, clarity and relevance of its report included: understanding new government and public sector development; technical development; enhancing the auditing capacity; providing appropriate technical training to new recruits; continually assessing the quality of engagements; conducting cost-effective stakeholder surveys; encouraging clean audit administration through both audit processes and stakeholder interactions; focusing on key control programmes; and managing the risk associated with changes in municipal administration in 2011.
Some of the initiatives of its visibility and leadership goal included: stakeholder interaction programmes, which were monitored and assessed at business unit level every quarter; enhancement and timeous updating of the Audit Stakeholder Management Information System (AS:MIS); extending the stakeholders’ capacity to optimally utilize its reports; cost-effective stakeholder surveys; and the AGSA 2011 Centenary.
Mr Kimi Makwetu, Deputy Auditor-General of South Africa continued by giving some of the initiatives of the funding goal which included: containing the cost of the audit; implementing interventions to collect debt and improve cash flow; controlling overheads; continually assessing the funding model; continually reviewing the cost structure; considering funding alternatives for discretionary audits; and generating sufficient surplus for re-investment in the business. Slides 11 to 13 of the presentation displayed the objective of the funding goal of the AGSA which was to execute the AGSA mandate economically, efficiently and effectively.
Some of the initiatives to strengthen human resources included: executive and leadership development through coaching and mentoring; leadership pipeline and succession planning for the AGSA; continual reviewing of the AGSA structure; effective teams and employee engagement; repositioning of the trainee audit scheme; continue to grow the number of qualified professionals; introducing 360 degree evaluation; entrenching the AGSA competency framework; performance management; value roll-out; and deepening public sector insights and knowledge.
Some of the initiatives of the ‘lead by example’ goal included: aligning the organization with the King III guidelines on risk management; modernization of the environment, including technology and processes; ongoing implementation of the Go-Green programme; engagement with all relevant stakeholders on AGSA broad-based black economic empowerment (BBBEE); corporate social initiative (CSI) plan focusing on the rural schools programme; implementation of a high-level three-year plan on enterprise development; implementation of the BBBEE plan; and focusing on preferential procurement, employment, management control and skills development.
Mr Makwetu then went on to look at the detailed budget for 2011/12. The budget assumptions included: tariffs were determined by applying a mark-up factor of 1.9 (average) to direct salary costs; budgeted for anticipated headcount rather than predefined vacancy percentage; available hours per annum were 2042 per head; tariff increases were impacted by market related salary increase of 8.5%; and recovery rate percentage reduced from an average of 66.6% to 63.7% (year-on-year).
Mr M Steele (DA) wanted to know what would be happening when changes were made to the municipal administration in 2011.
Mr Nombembe replied that changes were inevitable and business went on despite the leadership changes in the government because the reality is that government has a cyclical change every five years and they would be prepared for that particular risk.
The Chairperson commented that at an appropriate time the AGSA would need to interface with the Ministry In Co-Operative Governance And Traditional Affairs (COGTA) to look at how to plan to ensure the continuity of the administration at a municipal level beyond the transition because in the Committee’s oversight work they had discovered a high turnover at senior management level. This played a role in some cases causing fluctuations in the standards of good administration and governance. The question the AGSA should ask itself is: how would the AGSA interact with that particular ministry and collaborate with institutions to ensure clean governance and administration of certain programmes.
Mr Nombembe replied that the Auditor-General (AG) engaged with the MECs of COGTA in every province to drive clean governance and administration. Part of the visibility programme was to also engage with each entity that had a role to play. The AGSA would be linking up with all the relevant stakeholders so that these issues were given prominence.
Mr M Steele (DA) commented that there was a particular risk associated with political and leadership transition in which a number of contracts were finalised in the last days and weeks of an administration because this could be problematic at a later stage. The AG should look into this matter.
Mr L Ndabandaba (ANC) wanted to know how often the AG exposed new recruits to orientation and training.
Mr Nombembe replied that human resources would manage this aspect. Trainees went through a rigourous orientation programme and were also subjected to constant technical and practical training. Also, the trainees were studying at the same time as doing the technical and practical training. Guidelines were being continually developed.
The Chairperson commented that at a particular municipality that the Committee visited, leadership was not co-operating. The municipality disputed this.
Mr Nombembe replied that the management information system (MIS) was designed to track instances where this occurred. The 2011 Centenary of the AG would also be used to build and help the AG to revive and intensify the visibility programme with its stakeholders, own staff and everyone that understands that the work the office was doing was important and has a rich history.
Ms S Tsebe (ANC) wanted to know who was part of the special workshops. Who was the AG targeting?
Mr Nombembe replied that when the AG had door-to-door visits they had sessions with councillors, managers, mayors and leaders of the communities who have an understanding on how to collate certain service delivery information. Councillors were chosen because they have a greater responsibility to interact with the community.
Mr M Steele (DA) wanted to know when the special investigations report was going to be made available to the Committee; what was happening with the issue of information technology (IT) problems relating to access control, both internal and external that was affecting 80% to 90% of departments; and what measures would be put in place to improve the level of debt collection from municipalities.
The Chairperson commented that the question on the IT problems would be answered at the next meeting.
Mr Nombembe replied that the AG has adopted an approach of identifying what kind of special audits would be conducted. The special investigations report would be made available during the 2011/12 period.
Annexure 4 in the Strategic Plan and Budget of the AGSA 2011 – 2014 which was attached showed the performance auditing initiatives for 2011 – 2012.
Mr Ndabandaba (ANC) asked how often was visibility exercises and stakeholder surveys done.
Mr Nombembe replied that every quarter was the AG’s fallback position. The stakeholder survey was done annually to collaborate with experiences that the AG had picked up.
The Chairperson wanted to know to what extent were the quarterly visits informed by and response to findings that were made. Did he find it relevant in context to the roadshows that AGSA perform considering that it was at another level than the internal auditors.
Mr Nombembe replied that one had to first look at governance which dealt with the engagement with the audit committees and internal auditors. Secondly, one has to look at financial management and service delivery reports. Here one looked at whether the document management process was robust and intact. The system must not allow things to fall between the cracks. The last area that would be focused on was the cost-cutting initiatives.
The AGSA delegation could not complete their presentation due to time constraints. The Committee was scheduled to meet with them again on 4 November 2010 when they would complete the presentation and respond to further questions posed by the Committee.
The Chairperson thanked the delegation for its presentation and Members for their comments and input.
The minutes of the previous meeting was adopted.
The meeting was adjourned.
- We don't have attendance info for this committee meeting
Download as PDF
You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.
See detailed instructions for your browser here.