Quorum was an issue at the meeting, as not enough Members of the Committee were initially present. However, during the proceedings Members joined the meeting so that a quorum was achieved.
The Committee’s content advisor and researcher engaged with the Committee regarding the draft report of the Standing Committee on the Auditor General’s (AG) 2017/18 Integrated Annual Report. The report was adopted.
The Committee then considered the draft report on the AG’s draft budget for 2019/20, where concerns about what comprised “other income” and the AG’s capacity were discussed. The draft report was adopted.
The Committee’s draft 2018 Annual Report and its draft Fifth Parliament Legacy Report were briefly discussed, and the Committee decided that their adoption would be deferred to the first meeting of 2019.
Lastly, the Committee went on to consider the minutes of the meetings of 7 February, 2, 6, 7, 9, 13, 14 and 20 March, 4, 8, 11 and 22 May, 13 September, 9 and 12 October and 9 and 20 November. After making minor amendments, the minutes were adopted.
The Acting Chairperson thanked Ms G Tseke (ANC) for joining the meeting so that the Committee could have quorum, and said that more Members were expected to attend. There were no apologies and the documents had been sent to Members on the Monday preceding the meeting.
Consideration of reports and minutes
AG’s Integrated Annual Report
The Chairperson said that the first report to be considered and adopted was the draft report of the Standing Committee on the Auditor General’s (AG’s) 2017/18 Integrated Annual Report.
She asked for input and corrections, and then asked the Committee’s Content Advisor, Mr Xolisile Mgxaji, to summarise the report.
Ms Tseke suggested that the support staff go directly to the recommendations.
The Chairperson responded that the Committee had received the report during the previous week, but because the Committee was waiting for other members, the Content Advisor should provide his input in the meantime.
Mr Mgxaji highlighted issues raised in the AG’s Integrated Annual Report, such as the audit outcomes, and the fact that the Committee had since November 2017 requested that the AG to provide transformation plans to appoint an external auditor. Most auditors in the field were doing business with the AG. The AG was also requested to inform the Committee of what it plans to do with the retained surplus. Lastly, there was the issue of increasing the AG’s capacity in the performance audit. The budget had increased by 12%.
The Chairperson thanked the Content Advisor and added that most municipalities that could not pay the fee of the AG were assisted by the Department of Cooperative Governance and Traditional Affairs (COGTA). She welcomed Mr N Singh (IFP), and asked if any Members would move the adoption of the draft report.
Ms P Bhengu-Kombe (ANC) moved to adopt the report, and Ms R Adams (ANC) seconded her proposal. The report was adopted.
AG’s Draft Budget
The Chairperson welcomed Mr M Ntombela (ANC), and moved on to the consideration of the draft report on the AG’s draft budget for 2019/20, which the Committee had received the previous day.
Mr Mgxaji said that the AG had presented the strategic plan and budget two weeks prior to the meeting. Anything planned by the AG was done to achieve the four objectives, which were stipulated in the report. The Committee had suggested that campaigning plans be shared regarding the new Amendment Act. The important thing to note in the budget was the increase in audit fees and the increase in expenditure by 12%. The AG had requested R50 million from Treasury. The audit directive was another issue raised by this report.
Mr M Shackleton (DA) commented that it was in the country’s interest to capacitate the AG. He was happy that everything increased, including the workload, which was expected, but asked why the “other income” on page six of the report did not increase. What was this “other income”?
Mr Mgxaji said he was unsure about this.
Mr Mbuyiselo Hlekiso, Committee Researcher, remarked that perhaps the AG was unsure whether it would earn interest on that income.
The Chairperson said that the Committee was unsure of what ‘other income’ included, so how could they adopt the report?
Mr Mgxaji clarified that this included interest earned. He was unsure what the rationale for this was.
The Chairperson said that because the Committee did not have the Annual Report, it could not be approved, as the Committee needed to know what it was approving. All other income was increasing, except for the “other income”.
Mr Singh commented that although he had not been present at the meeting, perhaps this referred to income from international work done by the AG.
Mr Ntombela inquired whether the 5% increase was too much. Why was it not less?
The Chairperson said this had been answered at the previous meeting.
Mr Ntombela responded that he was not present at the previous meeting.
Mr Mgxaji answered that when the AG had presented the report, and when the Bill was discussed, issues had been resolved with Treasury. The AG had recently announced that they were considering lowering the scope. Auditing smaller institutions was too expensive to audit, as they could not afford full audits.
Mr Ntombela remarked that it sounds like an exacerbated issue, and raised a concern that institutions that were not financially well would experience the same problem.
Mr Singh said that at least Treasury was now on board, and 5% was feasible. There would always municipalities in distress.
Mr Hlekiso added that the AG stated they usually charged tariffs below the rate of inflation, but they pay contract workers at the rate of inflation. Therefore, to further reduce the amount would be problematic.
The Chairperson remarked that if they increased tariffs, entities would not be able to pay the AG on time. However, there were arrangements with Treasury and COGTA to ensure affordability. She asked if they could adopt the report.
Mr Shackleton proposed the adoption of the report, and Mr Ntombela seconded.
Committee’s Annual Report and Legacy Report
The Chairperson said that the Committee’s draft 2018 Annual Report and its draft Fifth Parliament Legacy Report would be deferred to the first meeting of 2019.
The Chairperson and Mr Singh said that the Public Audit Act (PAA) was the Committee’s greatest legacy. Mr Singh said it could be passed in January 2019.
The Chairperson added that without adopting the minutes, the Committee could not have a Legacy Report.
Mr Singh moved the adoption of the minutes of 7 February, and Ms Adams seconded.
Mr Ntombela moved the adoption of the minutes of 2 March, and Ms Adams seconded.
The adoption of the minutes of 6 March was proposed by Ms Bhengu-Kombe, and Mr Singh seconded the adoption.
Mr Singh moved the adoption of the minutes of 7 March, which Ms Bhengu-Kombe seconded.
The adoption of the minutes of 9 March was proposed by Ms Bhengu-Kombe and Mr Singh seconded the adoption.
Mr Singh moved the adoption of the minutes of 13 March, which Ms Tseke seconded.
The adoption of the minutes of 14 March was proposed by Mr Ntombela and Mr Singh seconded the adoption.
Ms Adams moved the adoption of the minutes of 20 March, with Mr Singh having seconded.
The adoption of the minutes of 4 May was proposed by Ms Adams, and Mr Ntombela seconded the adoption.
Mr Ntombela moved the adoption of the minutes of 8 May and Ms Adams seconded.
The adoption of the minutes of 11 May was proposed by Mr Singh and Mr Ntombela seconded the adoption.
Mr Shackleton commented that after 11 May, the DA was called the Democratic Party in the minutes.
Ms Bhengu-Kombe moved the adoption of the minutes of 11 May and Ms Adams seconded.
The adoption of the minutes of 22 May was proposed by Ms Adams and Ms Bhengu-Kombe seconded the adoption.
Mr Singh moved the adoption of the minutes of 13 September. It was unclear who seconded.
The adoption of the minutes of 9 October was proposed by Ms Adams, and Ms Khunou seconded the adoption.
Ms Khunou moved the adoption of the minutes of 12 October, and Ms Adams seconded.
The adoption of the minutes of 9 November was proposed by Mr Shackleton, and it was unclear who seconded. Ms Bhengu-Kombe corrected her attendance, as she was present.
Mr Singh moved the adoption of the minutes of 20 November, and Ms Khunou seconded.
The Chairperson informed the Committee that this was the last meeting for 2018. The meeting was adjourned.