Auditor-General appointment: interviews

Appointment of the Auditor General

20 August 2020
Chairperson: Ms N Tolashe (ANC)
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Meeting Summary

Video: Ad Hoc Committee on the Appointment of the Auditor-General 20 August 2020       Part 2

The Ad Hoc Committee interviewed with six shortlisted candidates for the position of the Auditor-General (AG). The Committee had shortlisted eight candidates but two candidates withdrew. The Chairperson emphasized that the interview process would be fair and transparent by ensuring public participation. The public had been requested to comment on the shortlisted candidates. These public comments were raised with candidates during their interviews and candidates were requested to respond to the Committee in writing. The Committee questioned candidates on their leadership, strategic management and technical skills and personality traits as well as about governance, ethics, credibility and adherence to the Constitution. Candidates were asked how they would deal with the certain challenges facing the Office of the Auditor-General, particularly the implementation of the Public Audit Act and the threats against public auditors.

Meeting report

The Chairperson offered assurance that the interview process would be open and transparent. The Committee has noted the public’s comments. After advertising the position of the Auditor-General, people applied and were shortlisted for interview in an open meeting. Eight candidates were shortlisted and two withdrew their candidacy. Standard questions will be asked in the interview to assess leadership, management, strategic and technical aspects. Candidates will then be given an opportunity to respond to comments received from the public. The Chairperson said the nation was watching to ensure the Committee carried out its mandate without fear, favour or prejudice.

Candidate 1: Mr Zakanya Hoosain [2:40, YouTube]
The Chairperson explained the interview procedure to the candidate and asked the candidate to tell the Committee about himself and why he should be considered for the position of AG.

Ms N Mente (EFF) said that the candidate mentioned that the position has quite a reputable history and Office of the Auditor General is a respected institution. Being a Chapter 9 institution, it has to strengthen democracy, but with the history of the audit outcomes and the amendments that have been carried out to further strengthen the Office to give it more power to act, it still seems the institution was falling short. She asked what the candidate would do differently and what laws he thought would help strengthen the Office of the AG to ensure that all irregular, fruitless and wasteful expenditure are eliminated so as not to find the country where it is today.

Mr S Buthelezi (ANC) asked what the candidate considered to be the key challenges facing the country and the role that he would play in addressing this. The auditing profession lacks transformation and asked if the candidate agreed with this. If yes, how does the lack of transformation manifest. Does the candidate see the AG playing a role in transforming the profession and what would this role be and how would the candidate execute this function? He asked the candidate to share some of his achievements in bringing about transformation in some of the institutions he has worked in before.

Ms D Peters (ANC) said that the candidate referred to trust waning in state institutions. Some of these institutions would continue to receive clean audits from the AG. Given that the AG is an institution entrenched in chapter 9 of the Constitution and should hold a particularly high standard of independence, what would the candidate do to safeguard the constitutional and legislative independence of the Office. Many of the AGSA staff are professionals who are members of audit bodies that would probably have some type of influence over the AG. How would the candidate carry out the work of the AG to avoid the influence of these professional bodies to ensure the constitutional and legislative imperative of the independence of the AG Office is upheld.

Mr S Somyo (ANC) said South Africa is faced with the COVID-19 pandemic which is ravaging society. Government has availed about R500 billion to intervene and ensure that the country eases the burden on people’s livelihoods and saves lives. Some within government and society have turned into scavengers and benefitted from this fund in a way that was allegedly seen as corruption. What did the candidate think could be done when faced with such a situation and how would he assist the country in preventing people from benefitting irregularly from the corruption of public finances?

Mr N Singh (IFP) said the candidate was well aware that the Office of the AG has a mandate to audit all state departments and public entities, but the Office has not been able to do this alone. He asked why the candidate thought it has not been able to carry out this function across the board. Except for the recent past, a number of state owned entities were audited by private firms and it is public knowledge that some of these firms are in trouble due to the quality of the audit reports they produced for these state owned entities. If the candidate were appointed, what would he bring to the table to ensure that audit reports are credible and what restrictions did the candidate think there should be. What innovation would he bring to make this happen.

Mr W Wessels (FF+) said it has become more prevalent over the last couple of years that during the course of audits, Auditor General South Africa (AGSA) has found more and more resistance by auditees. This resistance is sometimes about non-cooperation or where auditees refuse to table their annual report because they dispute the opinion of the AG. Years have passed in some cases where provincial departments or municipalities do not table their annual reports. He asked how the candidate would mitigate this resistance and lack of co-operation where these entities refuse to accept the AG’s opinion. How would the candidate ensure that the audit report is tabled. Why did the candidate think that in some cases the AG does not use the powers given in the Public Audit Act?

Ms D Dlakude (ANC) said the AG Office is one of the institutions which support South Africa’s constitutional democracy and currently corruption is one of the biggest threats to democracy. The report the AG presents to Parliament is a compilation of various auditing reports. How would the candidate ensure that these reports are credible and reliable?

Ms Mente said the candidate mentioned that when one is an auditor and has to make decisions, it has to be professional and not personal. From the candidate's professional experience, has he come across unethical behaviour in auditing and how did he deal with this to ensure that the reputation of the institution he served did not become questionable? You will deal with many stakeholders such as SOEs and national departments which will be difficult at times as they will ask the AG for favours. This is where personal and professional decision-making has to be distinguished. How would the candidate deal with situations where he is confronted with difficult stakeholders?

Ms Peters said we believe that a country is not free until its women are free. The President recently referred to gender-based violence (GBV) as a pandemic. In the candidate’s view, in evaluating and auditing key departments with responsibility for ensuring an adequate response to dealing with GBV, what have been the limitations and challenges previously? What would the candidate do to ensure that what has been promised will be carried out and that the audits prove this, such as the way in which the Police respond and Correctional Services in deal with rehabilitation?

Ms Mente said the candidate indicated that he would redefine clean audits. This is a good direction. Understanding smart criminals and the ways they find of stealing, would the candidate be able to redefine irregular expenditure and how would he do this?

The Chairperson thanked the candidate for availing himself for the interview and said he would be kept abreast of the developments in appointing the new AG.

Candidate 2: Dr Moses Gasela [2:16:48, YouTube]
The Chairperson explained the interview procedure to the candidate and asked the candidate to tell the Committee about himself.

Mr Buthelezi said there was no doubt about the candidate’s credibility in balancing the books. The Office of the AG has a reputation for more than a hundred years since its inception. Considering the recent amendments to the Act, what should be the critical focus for the next decade. He asked what the candidate considered to be his strongest leadership qualities and asked him to demonstrate this with examples.

Mr I Morolong (ANC) asked, given the responsibility of the Office of the AG, what the candidate thought were the key challenges facing South Africa. What is the role of this Chapter 9 institution in ensuring that South Africa’s democracy is strengthened.

Ms Peters asked to what extent the credibility of the audit profession was impacted by some incidents involving private sector audit firms. What role could the AG play in restoring trust and confidence in the auditing profession and auditing firms.

Mr Somyo said one of the key tenets of the AG Office is independence. Knowing the country and the scope of influence in various quarters, how would the candidate work to ensure that the constitutional independence of the Office would not be tampered with.

Mr J De Villiers (DA) said that the country was in the midst of a very serious crisis with the COVID-19 pandemic. This has led to a second virus called corruption that has once again reared its head in our society. Almost daily the media reports on allegations of corruption over COVID-19 funds. These are very serious allegations as is all corruption. It is the theft of public and taxpayers' money which should go to those in need, to fill the pockets of those who already have money to further enrich themselves. If appointed as AG, what would the candidate do to deal with this challenge?

Mr Singh said the candidate spoke about amendments to the Public Audit Act and these amendments were hailed by Parliament as being very progressive. In the candidate's view, what are key amendments of the Act and what challenges does he anticipate in the implementation of these amendments? What mitigation strategies would the candidate propose to ensure the successful implementation of the Act?

Mr Wessels said one of the biggest challenges in the country was the state of its state-owned entities which is a huge threat to the fiscus and which pushes South Africa closer to the fiscal cliff. There are some people who say that the AG should conduct all the audits for Schedule 2 state-owned entities and that this can go a long way in ending corruption and irregularity. Does the candidate agree with this? What would be the benefits/advantages and disadvantages of AGSA conducting all those audits?

Ms E Spies (DA) said a huge part of the duties of the AG Office is for auditors to go out and audit at the workplace of the auditees. A new phenomenon is auditors have experienced resistance and threats, placing them at risk which has led the AG to begin a process of litigation. Given the situation, what would the candidate do to mitigate such resistance?

Ms Dlakude said South Africa was faced with corruption at all government levels and public funds are being misused. The Office of the AG does not yet conduct the full scope of the audit owing to some limitations. What are those limitations and how would the candidate ensure that the Office of the AG conducts the full scope of the performance.

Ms Mente said that National Treasury can authorise institutions in government to deviate from the  procurement process. However, when Parliament looks at these deviations during its oversight, we establish that the deviation was unnecessary and it was only the way in which the motivation was crafted that the prescripts allowed the deviation. One also finds that a certain department gets a clean audit but this does not correlate with what people see on the ground. She asked the candidate how he would ensure that clean audits do not appear on paper only but are credible and all auditors within the Office of the AG have integrity and adhere to ethics. What would the candidate do if the auditor does not adhere to this?

Mr Buthelezi said ethics was important and that sometimes stakeholders demand a conflict with our own ethics and the organization that we represent. He asked the candidate about the ethical and integrity challenges he has encountered and how he dealt with these. Mr Buthelezi thought it is important as a leader to be able to deal with stakeholders. He asked the candidate which stakeholders were important to the AG Office and how he would go about interacting with them. Is it necessary to interact with those stakeholders?

The Chairperson thanked the candidate for availing himself for the interview and said he would be kept abreast of the developments in appointing the new AG.

Candidate 3: Mr Michael Sass [3:42:12, YouTube]
The Chairperson explained the interview procedure to the candidate and asked the candidate to tell the Committee about himself.

Mr Morolong said the AG Office is a reputable institution that has existed for over a century. Given recent amendments to the Act guiding the institution, what does the candidate think should be the focus areas for the next decade?

Ms Peters said South Africa is facing a lot of challenges and one of those is gender-based violence and the scourge of child abuse that the President has classified as a pandemic itself. Equally, there are challenges of corruption, accountability and a lack of consequence management. What are the key challenges South Africa is faced with and what should the role of the AG be in strengthening South Africa’s democracy. She asked the candidate to talk about the role of the AG in ensuring the GBV is adequately addressed by those entrusted to deal with it and what have been the shortcomings of those entrusted over the years.

Mr Somyo said in recent times in South Africa the credibility of private audit firms in their audit function has been impacted. The AG has a role to play in the restoration of trust. What does the candidate think he would primarily do to improve this?

Mr De Villiers asked the candidate, when considering state capture, what he would do to safeguard the constitutional independence of the Office of the AG.

Mr Singh said COVID-19 has brought a lot of heartache to millions around the world and to South Africans, but it has also brought opportunities such as PPE procurement and grants. There is corruption in all of this and the AG Office has been asked by the President to assist in fighting corruption, but this is not the normal duty of the AG Office. He asked the candidate how he would ensure proper fiscal management if appointed as AG.

Mr Wessels said the candidate alluded to the amendments to the Public Audit Act and that these were good amendments. Does the candidate foresee any challenges in the implementation of the amendments? If so, what are those challenges and how would the candidate mitigate these challenges to successfully implement these and the regulations?

Ms Dlakude said that corruption is the cancer that is slowly crippling our democracy and the people on the ground are suffering. There are people who view state institutions as their vehicle to enrich themselves. In this process these people threaten those who want to expose their corrupt activities. Auditors are experiencing resistance and threats and the AG had to litigate in court. She asked the candidate what he would do to mitigate such resistance if appointed as AG.

Ms Mente said the Zondo Commission sought to find who was responsible for the money that disappeared. The AG has been auditing the same departments implicated in the Zondo Commission. She asked the candidate to identify the limitations of the AG and how he would ensure that auditors do audits without being hindered over resources or anything else.

Mr Morolong said stakeholder interests and demands clash with the ethics of organizations that we represent including principles of good governance. He asked how the candidate has dealt with issues of integrity, ethics and good governance in the past. There are stakeholders that are demanding. How has the candidate navigated his relationship with demanding and unreasonable stakeholders?

The Chairperson said the process has been very transparent and that the public was called upon to give their views on shortlisted candidates. In the candidate's case, the public had a particular view and the Committee had requested that the candidate put his response to this in writing. She asked the candidate to respond to the issue.

Ms Mente referred to the Integrated Financial Management System (IFMS) project at Treasury. Almost R1.2 billion was paid for a system that does not exist to date. She referred to the candidate saying he would teach people what the audit outcomes mean, particularly irregularities. She asked if the candidate fired anyone due to the irregularities of the IFMS project since he was in charge of the entire project. If the candidate did not fire anyone, did he think it was fair that the Committee should have to consider him as AG who is the most important person in guiding government and protecting the public purse knowing very well that there were elements of corruption in the IFMS project. She found it disturbing that the candidate said sometimes people cannot prove unlawful instructions.

The Chairperson thanked the candidate for availing himself for the interview and said he would be kept abreast of the developments in appointing the new AG.

Candidate 4: Mr Shabeer Kahn [0:16, YouTube]
The Chairperson explained the interview procedure to the candidate and asked the candidate to tell the Committee about himself.

Ms Spies said the AG Office is a Chapter 9 institution and is viewed as being extremely important to ensuring that fiscal management and controls are in place. In light of this Office being a reputable institution for over a hundred years and considering the recent amendments to its legislation, what did the candidate think should be the critical focus areas of the AG Office for the next decade?

Mr Wessels said South Africa was facing severe challenges, even prior to COVID-19. He asked the candidate how he viewed the role of the AG in addressing some of these challenges and how would he strengthen democracy in South Africa.

Mr Singh said auditing is a noble profession, yet amongst auditing firms, there are those that are dishonest which became evident recently in the SOEs and the way some private audit firms conducted themselves, as revealed at the Zondo Commission. He asked the candidate what influence the AG could have in restoring public trust and confidence in the profession.

Mr De Villiers said if it was so important that the Office of the AG must be independent, what the candidate would do to safeguard this position and essentially protect the Office of the AG against State Capture?

Mr Somyo said the country is experiencing hardship caused by the COVID-19 pandemic and the state has intervened to save the lives of people and their livelihoods. However, many have tried to benefit from these funds illegally through the procurement process. If appointed as AG, how would the candidate deal with this?

Ms Peters asked what challenges the candidate anticipated in the implementation of the Public Audit Amendment Act and its regulations and what mitigation strategies would he propose. Which proactive approaches would the candidate implement to ensure successful implementation of the amendments?

Mr Morolong said the challenges that confront SOEs are of a complex nature and there has been a growing position that the AG must take full charge of auditing all Section 2 state-owned enterprises. He asked if the candidate agreed with this position and to give reasons for his opinion.

Mr Buthelezi said some auditors are currently experiencing resistance and threats during audits. He asked if the candidate has experienced this type of resistance as an auditor. If so, how did he deal with it and if not, the candidate should create a scenario where there is resistance and explain how he would deal with this threat.

Ms Mente said the candidate mentioned that he would love to see the AG perform the full scope of auditing within the next decade and this includes performance audits. She asked why the candidate thought this was currently not happening and what challenges the AG was facing. If appointed as AG, what would he do to ensure the full scope of the Office is undertaken without hindrance?

Ms Dlakude said she would take the candidate back to the holy book where Jesus Christ was tempted for forty days and nights by the devil; fortunately as the Son of God he resisted those temptations. The people leading the various business units in the AG Office are not immune to temptations and one way or the other, corrupters will try to tempt them. Various business heads compile reports that the AG tables in Parliament. With the rate of corruption in South Africa, how would the candidate ensure that the reports are reliable and credible?

Ms Spies said the candidate made reference to the new tools the AG has received through the Amendment Act and with these new tools comes greater transparency and responsibility. In most institutions, the participation of stakeholders is important and particularly the management of the relationship with the stakeholders. Sometimes stakeholders can be demanding and this can contradict personal ethics and those of the organization we represent. She asked how the candidate would manage unreasonable stakeholder expectations and how he has addressed ethical and corporate governance challenges in past and if he achieved the desired results.

The Chairperson thanked the candidate for availing himself for the interview and said he would be kept abreast of the developments and outcome in appointing the new AG.

Candidate 5: Ms Tsakani Maluleke [1:22:26, YouTube]
The Chairperson explained the interview procedure to the candidate and asked the candidate to tell the Committee about herself.

Mr Wessels said the AG Office was a reputable one that has been around for a century, but times are changing and the country is facing dire social and economic circumstances. The legislation governing the institution has also changed. Taking that into account, what did the candidate view as the focus areas for the AG for the next decade in the short, medium and long-term?

Mr Singh asked what she thought were the key challenges South Africa was faced with at present and what role the AG could play in strengthening democracy and the transformation of the auditing profession.

Mr De Villiers said private sector firms did not always act in the public’s interest and in the last five years, there has been massive publicity over private sector corruption and massive accounting fraud of businesses audited by private firms. This has ultimately caused the audit profession itself to lose credibility. He asked about the role the AG would have in restoring the confidence and trust of the public in the auditing profession itself.

Mr Somyo asked the candidate how she would stick to the Constitution and strengthen the independence of the Office of the AG.

Ms Peters said the candidate talked about the values her parents instilled in her. Considering the announcement by the President to minimise the impact of the COVID-19 pandemic on the citizenry, some were salivating on the money announced for this. There have been many COVID-19 corruption allegations. If appointed as AG, how would the candidate deal with such challenges, in particular procurement opportunities that could be a potential avenue for corruption? How would the candidate ensure that the auditees are able to mitigate against this in future procurement opportunities?

Mr Morolong asked the candidate what she anticipated to be potential impediments in the implementation of the Public Audit Amendment Act and what she would propose as approaches or strategies to ensure successful implementation of the amendments.

Mr Buthelezi asked the candidate what she thought must be done to ensure that the private sector does not just pay lip service to transformation, but walks the talk. With her past experience and as the second most important individual at the Office of the AG, what are your achievements and what have you done to ensure transformation? What is the candidate's position on AGSA doing the auditing for SOEs rather than private audit firms? What are the advantages and disadvantages of AGSA becoming involved and what is the candidate’ preference on this?

Ms Mente said levels of GBV were rising in an uncontrollable way. She recalled the experience of a young female police investigator – to paint a picture of the vulnerability of women, even though we understand that we must take up these spaces and cement ourselves in them. There are trends that you come across in your line of duty, especially as women. You will be facing a trend of being undermined, bribed, raped and followed into dark corners. She asked the candidate if she had faced being undermined and how she had dealt with this. If appointed as AG, how would she deal with these trends? The AG had to litigate in court as entities refused to accept the audit. This could be aggravated if a woman was in that position. How would the candidate deal with this?

Ms Dlakude said she was proud the candidate was a woman and was the first woman to be interviewed of the shortlisted candidates. Corruption is a third pandemic in this country and is a serious threat to constitutional democracy. She asked the candidate if she had any shortcomings as a woman and if it would hamper her ability in her work, if appointed as AG. What has the candidate done to deal with her shortcomings if there are any. There are limitations preventing AGSA conducting the full scope of an audit. She asked the candidate what these limitations are and how she would ensure the full scope of a performance audit is conducted without these limitations.

Ms Spies said the AG reports tabled in Parliament are a compilation of the various reports of business units within AGSA. If appointed as AG, how would the candidate ensure those reports are credible and reliable?

Mr Wessels asked if the candidate ever came across a situation where the demands of a stakeholder conflicted with her ethical values or those of her organization. How did she address this and how would she address it? Stakeholder relations are important and given the unreasonable demands of stakeholders, how would the candidate manage this if appointed as AG.

The Chairperson said the process has been very transparent and that the public was called upon to give their views on shortlisted candidates. In the candidate's case, the public had a particular view and the Committee had requested that the candidate put her response in writing. She asked the candidate to respond to the issue.

Ms Mente said the candidate issued audit findings in all three spheres and it is a dismal, problematic picture. She would imagine a number of certificates of debt have been issued and irregular practice identified. There is a tendency in South Africa to go to court to delay the process and to lose focus.  If appointed as the AG, what would the next step be? What would the candidate do to ensure that process was finished within the right time frame without any delay tactics?

Mr Buthelezi asked the candidate if the AG Office had jurisdiction over the Independent Regulatory Board for Auditors (IRBA). The Committee simply wanted to get her response to the public's comments.

Mr Wessels asked if the candidate thought there was too much emphasis on compliance as opposed to performance. Is the standard that should be maintained to obtain a clean audit or unqualified audit insufficient in the current circumstances? Is there a need for a new definition of a clean audit that takes service delivery and value for money into account?

Mr Singh read out a public comment which alleged the candidate she did not adequately address a racism complaint reported to her. The Chairperson asked if the candidate wanted to respond to this.

Mr Morolong said the Committee was not in a position to tell the candidate what to do about these allegations and that he agreed with Mr Buthelezi. The Committee’s sole interest was to know how the issues were handled. He suggested that the candidate expand on how she intends to deal with the matters going forward so the Committee can do its best in deciding how to deal with this concern.

The Chairperson thanked the candidate for availing herself for the interview and said she would be kept abreast of the developments and outcome in appointing the new AG.

Candidate 6: Mr Edmond Shoko-Lekhuleni [3:27:36, YouTube]
The Chairperson explained the interview procedure to the candidate and asked the candidate to tell the Committee about himself and why he should be appointed as AG.

Mr Singh clarified that the Chairperson simply wanted the candidate to tell the Committee who he was, where he was from and a bit more about himself.

Mr Morolong said the AG Office is a reputable institution and its existence spans over a century. Considering the recent amendments to its legislation, he asked the candidate what he thought should be the critical focus areas for the next decade.

Ms Peters asked the candidate over and above the scourge of child abuse and the GBV pandemic, what the candidate thought were the key challenges facing the country and what role should the AG play in strengthening South Africa’s democracy.

Mr Somyo said that considering that a number of private sector audit companies had affected the credibility of the auditing profession, how would the candidate restore credibility to the profession.

Mr De Villiers said the candidate alluded to how state institutions have been captured by placing compromised individuals in certain positions. If appointed as AG, what would the candidate do to safeguard the constitutional independence of the Office of the AG?

Mr Singh said the world was battling with the COVID-19 pandemic and emergency goods and services had to be procured. This has led to unscrupulous service providers who are involved in corrupt activities. The President called upon the AG Office to assist in coming up with strategies to monitor this spending and procurement. He asked how the candidate would have responded to this call if he were the AG at the time.

Mr Wessels asked the candidate to explain his view of the scope of the Act’s amendments and what challenges he anticipated in the implementation of these amendments. How would the candidate ensure successful implementation of the new amendments if appointed as the AG?

Ms Spies said throughout the day it was stated that the Office of the AG has earned its stripes as a credible and reputable Chapter 9 institution. Over the past year or more many state-owned entities have found themselves in a mess. With this in mind, there is a perception that AGSA should be tasked with auditing all Schedule 2 state-owned enterprises. She asked for the candidate's view and to give reasons.

Ms Peters said auditors are currently experiencing resistance and threats during audits to an extent where the AG has had to litigate in court. She asked what the candidate would do to mitigate such litigation. How would the candidate ensure the safety of auditors and female auditors in hostile environments where auditees are dissatisfied with previous processes and feel threatened by the potential outcome of an audit?

Ms Mente said the candidate introduced four different audits in his answer. Those audits would mean a full scope audit to curb the leakages of the fiscus and stop corruption. She asked what the candidate thought were the challenges and how he would address those challenges to stop leakage of funds.

Mr Buthelezi said there was no doubt about the candidate's accounting proficiency. He asked the candidate to share what he thought were his strong points in leadership and where he had experienced a situation where he needed to display strong leadership qualities. The AG reports tabled in Parliament are a compilation of the reports of the business units within AGSA. If appointed as AG, how would the candidate ensure those reports are credible and reliable?

Mr Morolong said stakeholder interests and demands clash with the ethics of the organizations we represent, including principles of good governance. He asked how the candidate has dealt with issues of integrity, ethics and good governance in the past. There are stakeholders that are demanding. How would the candidate navigate his relationship with demanding and unreasonable stakeholders?

The Chairperson thanked the candidate for availing himself for the interview and said he would be kept abreast of the developments and outcome in appointing the new AG.

The meeting was adjourned.

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