Committee Reports on AGSA 2015/16 Annual Report & 2017-2020 Strategic Plan

Meeting report

Apologies
The Chairperson asked if there were any apologies.

Mr P Topham (DA) submitted apologies. He was currently in hospital.

Ms D Carter (DA) had also sent in her apologies - she was sick and suffering from a long-term illness.

Agenda
The Chairperson went through the agenda and asked the Committee whether they were happy with the report.

The Committee was happy with the agenda.

Consideration and Adoption of Draft Minutes
4 November 2016
Mr A McLoughlin (DA) had made grammatical corrections to the draft minutes last week Friday.

The Chairperson asked that Ms Carter be noted under apologies as she was sick and suffering from a long-term illness.

Mr McLoughlin asked that line 6 under 3.1 on page 6 be corrected from “only one of who has” to “only one of whom has”.

Th Committee agreed to this amendment and the minutes were adopted.

The Chairperson thanked Mr McLoughlin, the Committee Secretary and Mr N Singh (IFP) for the minutes. He stated that they were of good quality.

Committee Report on the Integrated Annual Report of the Auditor General for the Financial Year 2016/17
Mr McLoughlin suggested minor changes to the wording in recommendation 2 on page 6.

The Chairperson asked that recommendation 8 state that the Standing Committee approves the appointment of the External Auditor.

He further asked that the last paragraph be marked as recommendation 9.

Mr Singh asked that the names of the Auditors be included in the report.

Mr McLoughlin asked that recommendation 9 be corrected from “the Auditor General is satisfied by the performance of the AGSA” to “the Auditor General is satisfied with the performance of the AGSA”.

Mr Singh asked that recommendation 3 be corrected from “auditees that have already receiving clean audits” to “auditees that have already received clean audits”.

Mr M Maswanganyi (ANC) explained that it was written down as “receiving” because those people were continuously receiving clean audits.

Mr Singh stated that that needed to be made clear in the sentence because as it stands it is not clear. He said that the “have” then needs to be changed to “are”, in order to make that clear.
 
Mr Maswanganyi asked for clarity on recommendation 4.

The Chairperson explained that the Public Audit Act (PAA) gave certain powers but those powers are not taken seriously as they have no consequences when enforced and not complied with.

Mr Singh suggested that the recommendation state “Consider reviewing the PAA” instead of “To amend PAA”, in order to protect the Chairperson and the Committee.

The Chairperson agreed to this.

Mr McLoughlin asked for a number of amendments to recommendation 4. He asked that “similar powers with” be corrected to “similar powers to”. He asked that “This will resolved” be corrected to “This will resolve”. He asked that the last sentence be corrected and restructured.

It was agreed that the last sentence would only state: “This will resolve the problem of ineffective use of the audit findings”.

Mr Maswanganyi stated that the Committee needed to be cautious with the wording of recommendation 4 because the Auditor-General and Public Protector have very different functions and powers.

The Chairperson agreed and emphasised the fact that the Committee understood that the Auditor-General and Public Protector could never have the same powers. The point that the Committee was trying to get across is that the powers of Chapter 9 institutions, especially that of the Auditor-General are not taken seriously. He stated that for years the Auditor-General had made the same findings about the same departments, yet nothing changed and nothing was done.

Mr Maswanganyi stated that it should also be noted that the Committee and Auditor-General should start concentrating on the auditees that are not performing well and not receiving clean audits.

Mr Xolisile Mgxaji, Committee Content Advisor, pointed out that terminology might be standing in the way of municipalities performing. He stated that the terminology needed to be more accessible to the municipalities.

The Chairperson noted these comments. He said that it was difficult to come up with terminology that would be accessible because accessibility was very subjective.

The Chairperson emphasised the Committee’s recommendation for the Auditor-General to focus more on performance audits in order to ensure the principle of ‘value for money’ in the public sector.

Recommendation 3 was amended to “should increase focus on performance and value for money audits”.

Recommendation 5 was amended to “The Committee supports the retention of the total surplus of R105 million in the 2015/16 year as a general reserve. The Committee will monitor future surplus amounts in terms of provisions of the Public Audit Act.”

The report was adopted with amendments.

Committee Report on the Auditor-General South Africa’s 2017-2020 Strategic Plan and Budget

The Committee went through the recommendations.

Mr McLoughlin suggested minor amendments.

Mr Singh amended recommendation 5.2. to read as follows: “The AG should be allowed to budget for a surplus due to the nature of its funding model which poses a risk to its financial sustainability, provided that the surplus does not arise from significant increases in audit tarrifs.” Recommendation 5.3 was amended to read as follows: “The AG should gradually increase the number of SOEs being audited by the Office of the AG.”

Mr Singh asked if there was such a thing as “half-yearly audit outcomes”.

The Chairperson said that there was no such thing.

Mr Maswanganyi suggested taking recommendation 5.3 out of the report.

The Chairperson explained that the recommendation was there in order to increase the Auditor-General’s contact with the public, and in order to support the Auditor-General’s visibility programme. There needed to be more consistency, it was problematic that the public only had contact with the Auditor-General at the end of the year.

Mr Maswanganyi suggested that it be taken out of the report again.

The Committee reached a consensus and decided to remove the recommendation from the report.

Recommendation 5.5 was amended to read as follows: “The Committee approved the increased Audit Tariffs proposed by the AG.”

Recommendation 5.6 was amended to read as follows:  “The Committee approved the proposed Audit Directives issued by the AG in its current form.”

The report would be edited and circulated to the Committee the following day.

The draft report was adopted with changes.

The meeting was adjourned.