First Term Programme & Outstanding Matters

Standing Committee on Auditor General

23 February 2012
Chairperson: Adv M Masutha (ANC)
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Meeting Summary

The Committee discussed and dealt with administrative as well as oversight related issues. The distinction was however made between issues that appeared on the Committee’s agenda that could be discussed and those that needed to be postponed. For example the Remuneration Committee issue and an in depth discussion on a planned international trip was postponed. The Committee did however agree that either Canada or Austria would be possible destinations of choice. Minutes dated 11 November 2011 was adopted unamended. The financial statements of the Committee as well as its First Term Draft Committee Programme ending 31 March 2012 was also considered. The issue of possible oversight visits to provinces was discussed and members were encouraged to make suggestions. There seemed to be overwhelming support for the eThekwini Municipality to be a visited given the recent bad audit report that it had obtained. The North West Province was another option which the Committee would consider. The Committee being able to do oversight visits to both eThekwini and North West would be considered a bonus

Meeting report

The Chairperson stated that the Committee had a proposed agenda for the meeting but that it had been changed before.

Issues on the agenda to be postponed:
The Committee hoped to get a Public Finance Management Act (PFMA) General Report 2010/11 presentation from the Auditor General (AG). The AG upon tabling of the Report had to present it to the Committee. At present the AG was chairing the International Body of Supreme Audit Bodies meeting in Austria. The AG’s deputy was also not available as he had suffered a personal bereavement. The Chairperson had been unsuccessful in getting hold of the AG’s deputy.

An update on the Remuneration Committee (Remco) issue would also be postponed. The Remco from the AG’s side advised the Committee on changes in salaries and benefits to the AG. It had almost been 2 years since the Committee had dealt with the issue. The Committee had made recommendations on the issue and the matter was at present being looked at by the legal section of the Presidency. The Committee intended to draft a response from Parliament to the Presidency. The Speaker had also written a letter to the Presidency regarding the recommendations made by the Committee. The Committee would have to put together a package which would include a draft response approved by the Committee which would be passed on to the Presidency.

The Committee’s planned overseas trip would also be postponed. Attempts by the Committee had failed in this regard. Initially the trip had been planned for July 2011 to Canada but had to be cancelled as the Committee’s hosts were not available. September 2011 was more convenient for the hosts. The Committee consequently made application for the trip to be shifted to September 2011 but the application was not met favourably by the powers that be. The Committee was in the process of reviving the issue of an overseas trip and would keep Members abreast of developments. The Chairperson informed Members that he had asked the Committee Researcher to look at Austria as an alternative to Canada based on a recommendation made by the AG that Austria was a good country for the Committee to visit. Hence the possible choices to the Committee were either Canada or Austria.

Committee Minutes
The Chairperson tabled the minutes from the previous year for consideration.

The Committee adopted minutes dated the 11 November 2011 unamended.

Report on Committee’s Financial Statements

Members perused the financial statements of the Committee as obtained from Committee Section. The Chairperson pointed out that when he had checked the Committee’s kitty balance at one point in time it had reflected a balance of R600. At present the kitty reflected a balance of over R100 000. He suggested that the Committee continue with its work and ignore the balances as it tended to fluctuate when funds got shifted.

Mr N Singh (IFP) stated that even though certain items from the agenda had stood down it must be reflected that those items were on the agenda as the Chairperson had commented upon them.

Ms S Shope-Sithole (ANC) addressed the issue of the Committee’s Funds and stated that from experience it was best for committees so submit budgets in terms of the amount of funds that were needed. It was a normal occurrence for funds to be shifted around to where it was more needed. She suggested that the Committee submit a budget reflecting how much funds it needed.

The Chairperson responded that the Committee had submitted a budget in 2011. He considered it a complex process. The Committee now intended to embark on an overseas trip and hence funds would be needed. The planned trip was part of the Committee’s work. A proposal would be put through to Committee Section. The Committee submitted a budget together with its Committee Programme every year.

Mr Singh stated that it would be helpful if the AG could furnish the Committee with a list of outstanding fees’ statements from departments and state owned enterprises. The Committee needed to be kept apprised of outstanding fees.

The Chairperson stated that the AG had been requested to furnish the Committee with regular updates. Perhaps the Committee needed to be more specific in terms of timelines. Perhaps the statements should be furnished to the Committee before the commencement of the current financial year.

Mr Johnny Ramrock Committee Secretary stated that R666 000 had been allocated to the Committee at the beginning of the financial year. The Committee had only spent R90 000 of the funds. As a result the House Chairperson’s Office had taken R400 000 from the Committee’s budget to use elsewhere. The Committee was thus left with R178 000 in its budget.

Mr Singh stated that there was no disputing the fact that funds had been taken away from the Committee’s budget. He however felt that the funds would not have been taken away from the Committee if the Committee had a sustainable Committee Programme with a packed schedule. He hoped that when the Committee needed funds it would be remembered that funds had been taken from the Committee’s Budget.

Ms Shope-Sithole pointed out that the transfer of funds from the Committee’s Budget was a virement and hence the funds could be returned.
Committee Programme
The Committee continued by considering its First Term Draft Committee Programme ending 31 March 2012. The Chairperson asked Mr Ramrock to present the Programme to the Committee.

Mr Ramrock stated that upcoming meetings for the Committee were the 3, 9 and the 16 March 2012. The main items on the agenda for those meetings would the Committee’s planned oversight visits. 

The Chairperson stated that the decision on where to undertake the oversight visit to would be informed by the AG’s Report. It would most probably be those provinces which had negative audit outcomes. The planned oversight visit was a priority. The Committee had to support the AG together with provincial and local government departments to obtain clean audits by 2014. The idea was not for the Committee to act as the Standing Committee on Public Accounts (SCOPA) of auditees, but rather to support the work of the AG for the efficiency and effectiveness of organisations. The Committee’s role was after all oversight and support. Once the Committee had the AG’s Report members could identify which provinces needed to be visited the most by the Committee.   He suggested that perhaps the AG could make a presentation to the Committee the following week or the week thereafter. Thereafter the Committee could decide on which provinces to visit.

The Committee agreed.

The Chairperson also stated that the matter of the draft responses to the Remco issue and preparations for the possible international visit would also be dealt with the following week.

The Committee engaged in discussion on the issue of possible provinces to visit for oversight.

The Chairperson asked Members to make suggestions on which provinces the Committee could possibly consider going on oversight to.

Ms D Nxumalo (ANC) suggested that perhaps the Committee could visit the North West Province as there were issues that needed to be dealt with in the province. The Committee had already visited Limpopo Province on its last oversight visit.

Mr Singh suggested that the Committee visit the eThekwini Municipality in Durban. The Municipality had for many years performed well up until a short while ago when many issues had arisen. The question was what the AG looked at when an audit was done. How was a clean audit obtained? What were the issues that commissions looked at when investigations were done? He found it hard to understand how eThekwini could have had a clean record for so many years until issues were discovered a short while ago. How had things transpired? These and many things needed to be discussed with the AG. He spoke of an example where the AG had not given the ServicesSETA a bad report for many years but then in the last year the ServicesSETA got a bad report. The only reason why the irregularities had surfaced was because of a whistleblower. Had it not been for the whistleblower how would the irregularities have surfaced?

Prof L Ndabandaba (ANC) supported the suggestion to visit eThekwini.

The Chairperson stated that the Committee had a model which it followed for oversight visits which covered all three spheres of government. The Committee had started with local government. It did not mange to cover provincial government in 2011 as the Committee had decided to rather visit the AG’s head office in Pretoria and its regional office in Johannesburg. The Committee should cover the provincial sphere within 2012. Hopefully in 2013 the Committee would be able to cover the national sphere ie to visit departments with problems. The Chairperson stated that the Committee could even consider visiting parastatals.

Mr John Steenhuisen (DA) also supported a visit to eThekwini Municipality. The Municipality had R2bn worth of unauthorised and irregular expenditure. Yet for all preceding years the Municipality had clean audits. How could the AG not have picked up the problem? He felt it fitting for the Committee to visit eThekwini.

The Chairperson stated that more effort should be made to get SA’s institutions to perform better.

Mr Singh suggested that the Committee researcher look at the eThekwini oversight issue and liase with the AG. He suggested that whilst members were in Cape Town the Committee should consider a visit to the Western Cape Provincial Administration. The Western Cape Province was performing well. The Committee should visit bad performing provinces as well as those performing well. The committee researcher should consider the two proposed options of North West Province and eThekwini Municipality and should inform the Committee which one or both to visit.

The Chairperson pointed out that the Committee should also take into consideration the provisions of section 100 of the Constitution that were invoked regarding the education crisis in the Eastern Cape Province and the financial crisis in the Limpopo Province.

Ms Shope-Sithole stated that the AG did not compile financial statements but rather verified them. It was up to parliament to pick up discrepancies.

The Chairperson stated that once the AG’s General Report was before the Committee, Members could engage on all the issues raised. The Committee also needed to reflect on the system as a whole. Where were the gaps? Were there gaps perhaps in the PFMA and the Public Audit Act for instance? How well was parliament as an institution doing? The overall system needed to be considered. The Committee could advise parliament on structural types of issues. The Committee should defer engaging on the issues till after members had received the AG’s General Report.
Both eThekwini Municipality and the North West Province would be considered for an oversight visit. If possible both would be visited. He stated that ideally oversight visits should be a team effort. Perhaps a joint visit could be undertaken with another committee ie perhaps with the Portfolio Committee on Finance. He asked if members had any other issues to discuss.

Mr N Koornhof (COPE) referring to the Committee’s planned international visit suggested that there was a gap in the Committee’s schedule from the 22 May 2012 – 28 June 2012. 
He also pointed out that June and July was a bad time to visit Canada and Europe. Perhaps the 20 June – 28 June 2012 was a perfect time to undertake the visit. Another option was to do the visit during September 2012. He suggested that the Committee Secretary Mr Ramrock consider the Committee’s Programme and come up with the best time.

The Chairperson stated that he had met with the House Chairperson to consider the best time to undertake an international visit. June 2012 seemed to be a good option. The information provided by Mr Koornhof was considered valuable to make a decision. The Committee needed to engage the House Chairperson with a firm proposal. Members also had to decide on Canada or Austria as possible options to visit.

The meeting was adjourned.



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