SCoAG introduction; Committee Legacy Report

Meeting report

Opening remarks
The Chairperson welcomed all members to the first official meeting of the Committee. He acknowledged the challenge of a Friday meeting time slot, which could affect attendance due to constituency obligations. However, he emphasized the importance of attending these meetings, particularly when stakeholders are present, to ensure that the Committee can effectively carry out its business.

He reminded members of the quorum requirements: four members to proceed with general business and six members to adopt minutes or reports. The Chairperson urged members to arrange for alternates if they are unable to attend to maintain the Committee's productivity.

Ms Cindy Balie, Committee Secretary, reported that apologies had been received from Ms T Bila (ANC), Ms N Hlonyana (EFF) – Alternate Member, Ms V Mente-Nkuna (EFF), Ms L Ligaraba (ANC), and Mr M Mcwango (IFP). There was an absence of a quorum.

Mr Subrathie (ANC) requested that, as this was the first formal meeting of the Committee, an introduction of those present be conducted.

Committee member introductions
The Chairperson, Mr W Wessels (FF+), introduced himself as a member of the Freedom Front Plus (FF+), having served as a Member of Parliament since 2017, and representing the Free State.

Mr Alan Beesley (Action SA), an alternate member from Action SA, introduced himself as being from KwaZulu-Natal.

Mr Iran Subratie (ANC) from the ANC, also from KwaZulu-Natal, mentioned his religious commitments and appealed for the meeting to proceed on time.

Ms Eleanore Spies (DA) introduced herself, apologizing for her late arrival.

Mr Ronaldo Gouws (DA), represented the Eastern Cape and expressed his enthusiasm for the Committee's work, particularly in supporting the Auditor General's functions.

Introduction to Committee Secretariat
Ms Balie introduced the team acknowledging that this was a concise presentation on the roles and responsibilities of the secretariat team due to prior introductions made during the election of the chairperson. The support team comprises six key members.

The Committee Secretary coordinates all support services for the Committee, ensuring that members are equipped with the necessary information to fulfil their duties. This role includes overseeing the drafting of the Committee programme, communicating with stakeholders, and ensuring the accurate documentation of Committee activities, including minutes and reports. She emphasized the importance of maintaining detailed records, particularly given the potential legal implications, such as those observed during the Zondo Commission.

The Executive Secretary is primarily responsible for managing the office of the chairperson. This role involves handling all administrative and logistical arrangements for the chairperson, coordinating travel arrangements, and supporting the Committee's management and meeting logistics.

The Committee Assistant provides administrative and logistical support during Committee meetings and is responsible for maintaining an archive of Committee reports. This requires close collaboration with the Committee Secretary to ensure smooth operation of Committee activities.

Mr Mbuyiselo Hlekiso, Committee Researcher, noted his role in providing research support to the Committee. He would elaborate on his responsibilities in his presentation.

Mr Xolisile Mgxaji presented on the role of the Content Advisor, a position that is currently vacant but remains crucial to the Committee's functioning. The Content Advisor is tasked with offering specialized knowledge and strategic advice to the Committee, ensuring that all outputs, such as content briefs and strategy plans, are of high quality and aligned with Committee objectives. This role also includes drafting and quality-assuring the strategic plan and annual performance plan (APs) of the Committee's activities over a five-year period. The Content Advisor develops tools to track the Committee's progress in meeting its targets.

Ms Faith Ndenze introduced herself as part of Parliamentary Communication Services and her primary role is supporting the chairperson as the official spokesperson of the Committee. Her responsibilities include managing the communication and media duties, ensuring that the Committee’s work is communicated effectively to the public, especially given the specialized nature of the content, and helping to foster public understanding and trust in Parliament.

Ms Ndenze noted the importance of public access to Committee meetings, referencing section 52 of the Constitution, which mandates that meetings should be open to the public. Only in cases involving sensitive or classified information can meetings be closed to the public.

She noted that public trust in Parliament has significantly declined, which she attributed partly to a lack of understanding of the differences between Parliament and government. Her objective is to support the chairperson in communicating effectively with the public to rebuild this trust. She mentioned various communication channels, including a WhatsApp group for journalists, social media platforms like X, Instagram, Facebook, LinkedIn, and an upcoming TikTok account. These platforms are used to share Committee meeting schedules, presentations, and media statements issued by the chairperson. She discussed plans for the chairperson to produce short videos summarizing Committee meetings and to write opinion pieces for in-depth analysis of critical issues. These opinion pieces have previously been published in print and online media, including outlets like Daily Maverick and News24.

She explained that although the Committee does not typically engage in public hearings or public participation, her team supports the chairperson during oversight visits and ensures that Committee meetings are accessible to the public, if through Parliament TV or live streaming on YouTube. She acknowledged the challenges posed by the fire that destroyed much of the parliamentary infrastructure but noted that the Good Hope Chamber, where this Committee meets, still has the necessary facilities for broadcasting.

Ms Balie concluded by expressing the team's eagerness to work with Committee members and she would share their contact details via email.

Discussion
The Chairperson thanked the staff members. He extended a welcome to Mr Andile Conga from the Office on Institutions Supporting Democracy (OISD), mentioning that the Committee would engage with OISD later in the term. He acknowledged the presence of Mr Adiel Kamedien and others from the AGSA Corporate Secretariat.

Mr Subrathie thanked the chairperson for introducing the support team and acknowledging their hard work behind the scenes. He asked the Content Advisor about the Committee’s objectives for the upcoming year. While there was a programme for the second term, he wanted to understand the Committee’s overall goals for the next twelve months, broken down by quarter, to gain a clearer perspective on what they were expected to achieve.

His second question was directed at the media team, asking if there had been any negative reports during the Sixth Parliament about the Committee or AGSA.

Mr Mgxali replied about the development of the strategic plan and the annual performance plan (APP). Each Committee is mandated to have a strategic plan which then forms the basis for the APP. The strategic plan outlines the activities planned for the financial year, and the APP includes the quarterly targets and programmes.

The Committee has recently developed a planning / reporting framework, which specifies the timeframes for creating and executing these plans. The strategic plan for the Committee is projected to be developed by next year, in alignment with Parliament's strategic plan. This timeline is necessitated by the fact that Parliament is still in the process of finalizing its strategic plan, expected to be completed by the end of November. Consequently, the Committee will be able to draft its strategic development plan next year.

Mr Mgxali explained that although the Committee should ideally have an APP in place, it is currently operating under interim arrangements due to issues flagged in the Legacy Report. These issues have influenced the current programme plus the statutory requirements the Committee has to address. For example, the Committee is expected to consider the AGSA annual report in September and October. The APP, once developed, will guide the Committee's work, including setting quarterly targets and informing the programme for the first and second terms.

Ms Ndenze responded that the Committee has not experienced negative media coverage. Instead, media coverage has been mostly related to AGSA, which is an institution known for its positive performance. The Committee’s work has generally been positively reported, although there has been an issue with under-coverage in the past.

She acknowledged that the Committee’s media presence had been limited, partly due to resource constraints. The unit responsible for media and communication is currently stretched thin, with only one resource for seven committees. To address this, new strategies are being developed to enhance Committee visibility, particularly on social media platforms. These strategies aim to increase the Committee’s outreach without requiring additional financial resources.

Ms Spies raised concerns about the availability of streaming facilities for Committee meetings. Some Committees receive priority for streaming, while other Committee meetings held in certain venues do not benefit from this facility. This needed clarity as it is important for public engagement and transparency.

In response, the Chairperson explained the limitations for streaming facilities. Some venues such as Rooms M46 and S12, are equipped with streaming capabilities, but not all venues have this technology. The 2022 fire at Parliament has exacerbated this leading to a shortage of facilities. However, there are ongoing plans to address this. The Chief Whips Forum has discussed potential solutions, including increasing the number of committee facilities and upgrading IT broadcasting equipment. The provision of interpreting services is also being reviewed, as this is crucial for ensuring accessibility in all 12 official languages.

Standing Committee on Auditor-General (SCoAG) roles and functions
The Chairperson said this induction presentation is particularly important as the Committee has a majority of new members, with no returning members from the previous term. This presentation will be followed by an induction session by AGSA next week, which will assist members in understanding its functions and the Committee’s operational context.

Mr Hlekiso explained that SCoAG is established by the National Assembly through the Public Audit Act No. 25 of 2004. The Committee’s primary function is to ensure the independence and effectiveness of the Auditor-General of South Africa. This involves supporting AGSA, advising the National Assembly on related matters, and managing the appointment of the Auditor-General.

SCoAG oversees AGSA's budget and appoints external auditors to review its financial performance. According to legislative requirements, the Auditor-General must submit an annual performance report to the National Assembly and consult with SCoAG on audit directives and fees. The Committee has a role in the appointment of the Deputy Auditor-General.

Mr Hlekiso addressed several key issues for the Committee, such as reviewing the legislative framework governing AGSA, enhancing the Committee’s capacity, and benchmarking international oversight practices. He discussed the importance of addressing factors that impact AGSA’s operations and ensuring its financial stability and regulatory compliance.

The core objectives of SCoAG include passing and considering legislation and regulations, conducting oversight of executive actions, scrutinizing strategic plans and annual reports, facilitating public participation through hearings, performing statutory functions, and participating in international conferences to stay informed on global issues.

Mr Hlekiso said that while SCoAG is tasked with overseeing the AGSA budget and appointing external auditors, there is an inconsistency in the Auditor-General appointment process. Although the Act specifies that SCoAG should handle the AG’s conditions of service, salary and benefits, Parliament often establishes an Ad-Hoc Committee to carry out the appointment. He expressed confusion over this practice, questioning why an Ad-Hoc Committee is used for the appointment instead of SCoAG, despite the Committee’s role in recommending terms and conditions.

Mr Hlekiso noted legislative requirements, including the need for the Auditor-General to submit an annual performance report to the National Assembly and to consult with SCoAG on audit directives and fees. It was important to review the legislative framework, enhance the Committee's capacity, and benchmark international oversight practices. Addressing operational factors affecting AGSA and ensuring its financial stability were emphasized.

Discussion
Mr Gouws sought clarification if SCoAG is responsible not only for assisting and protecting the Auditor-General but for holding them accountable. He inquired about the Committee's role in ensuring that the AG adheres to regulations and addresses audit findings.

Mr Hlekiso confirmed that SCoAG indeed has a dual role. While it assists and supports AGSA, it is responsible for holding the AG accountable, including overseeing their performance and addressing audit findings.

Mr Hlekiso shifted the discussion to the process of appointing the Auditor-General. Although SCoAG is meant to oversee the conditions of service, salary and benefits of the AG, Parliament typically establishes an Ad-Hoc Committee for the appointment instead of SCoAG handling the appointment directly. He was confused by this as the Act stipulate that SCoAG should be involved in these aspects.

Ms Spies echoed this confusion and suggested that it would be beneficial for SCoAG members, who have the relevant experience, to be directly involved in the appointment process. Ad-Hoc Committee members might lack familiarity with the Office of the AG and having SCoAG handle the appointment might ensure a more informed process. She expressed concern about maintaining both the accountability of and protection for the AG, emphasizing the importance of having an effective process in place, especially considering the high standard of the current Auditor-General.

The Chairperson agreed and said that this issue should be flagged for discussion. He acknowledged the upcoming need to appoint a new AG in 2027, as the current AG's seven-year term is non-renewable. This term length is significant for ensuring AG independence. The Committee should address the rationale for using an Ad-Hoc Committee and explore potential improvements to the appointment process.

Mr Beesley sought clarity on the AG’s term length, which the Chairperson confirmed as seven years, non-renewable, which helps maintain the AG’s independence.

The Chairperson noted that it is generally not beneficial for an auditor to review the same entity for an extended period.

Mr Subrathie supported SCoAG being involved in the AG appointment process, suggesting that direct involvement could provide valuable expertise. He proposed that having a mix of SCoAG members and independent members might prevent potential bias that could arise from long-term interactions with the AG’s Office.

The Chairperson acknowledged this point and agreed that research and discussion on this matter would be necessary in future meetings. The AG appointment process and the role of SCoAG would be revisited in subsequent sessions.

Deputy Auditor-General
The presentation continued on the appointment of the Deputy Auditor-General, which is handled internally by AGSA, though consultation is required. The Deputy AG, while responsible for administrative matters, is not the accounting officer for the AG but handles performance and strategy execution.

Discussion
Mr Gouws sought clarity on the roles of the AG and the Deputy AG. It was explained that while the AG focuses on auditing and ensuring departmental functions align with their objectives, the Deputy AG manages administrative and operational aspects. The two roles interact frequently, but the Deputy AG handles the day-to-day administrative responsibilities.

AGSA Annual Report
Mr Hlekiso explained the key aspects of the AGSA Annual Report and its associated audit processes. The Audit Committee within the Office of the Auditor-General is pivotal in overseeing the financial statements. This Committee's responsibility includes thoroughly reviewing the financial statements to ensure transparency and accountability. The annual report is typically presented during the last week of August or the first week of September. However, the exact timing may vary based on factors affecting the preparation of the report. Once the report is tabled in the House, it is referred to the Committee by the Speaker. This referral grants the Committee access to the report for detailed examination. The annual report had not yet been tabled, but it was expected to be available for review by early September. This timeline was provided to help the Committee understand when they could expect to receive and begin their review of the report.

Discussion
Mr Subrathie asked for a more detailed explanation about the timing and procedural steps associated with the Annual Report’s presentation. He sought clarity on why the report needs to be tabled at the end of August and the exact steps that follow its presentation.

Mr Hlekiso clarified that the Annual Report must be officially tabled in the House before the Committee can access it. The Speaker of the House plays a crucial role in this process, as they are responsible for referring the report to the Committee once it has been tabled. Following referral, the Committee has access to the report for its review and examination. Although the report was not yet tabled, it was anticipated to be available for review by the end of August or early September.

Mr Gouws raised concerns about the timing of the public release of the Annual Report and its accessibility. Would the audit outcomes related to the Municipal Finance Management Act (MFMA) and the Public Finance Management Act (PFMA) be available to the public through media channels simultaneously with the Committee’s review or would the Committee have access to the audit before it is made public.

Mr Hlekiso explained that the MFMA and PFMA audit outcomes follow a different process compared to the AGSA Annual Report. The MFMA and PFMA audit outcomes are made public following the AG’s presentation of these outcomes. In contrast, the Annual Report, which includes comprehensive financial and performance information about AGSA, is referred to the Committee for review before its public release.

Mr Subrathie sought details about the content of the Annual Report and the specific time frame within which the Committee is expected to address it. He wanted to understand what information is included in the Annual Report and the deadline by which the Committee is expected to complete its review.

Mr Hlekiso outlined the key components of the AGSA Annual Report. The report includes its financial statements, performance information, and details about human resources. The Committee is expected to address and review the Annual Report before the end of November. Ideally, the Committee should aim to complete its review by October or November to allow sufficient time for analysis and discussion before the deadline.

Mr Beesley inquired about the process by which audit findings of municipalities and departments are presented to the Committee. Does the AG present these findings directly to the Committee or is another body responsible for this task?

Mr Hlekiso clarified that the Committee does not directly oversee the auditing of municipalities and departments. Instead, the AG presents these audit findings to the relevant Portfolio Committee. This Committee’s role is to support and protect the AG, particularly in addressing challenges faced during audits. For instance, during the 2017/18 period, auditors encountered significant issues, including the need for police protection due to challenges encountered with local governments. The Committee’s role is to address these challenges and support the AG before the findings are made public.

Mr Mgxaji spoke about the timing and presentation of audit findings of municipalities and departments. The Auditor-General should present the MFMA and PFMA audit outcomes to the Committee before these findings are made available to the public. The importance of this practice was to allow the Committee to address any challenges arising from the audits before the findings are released publicly.

Mr Mgxaji clarified that while the Committee does not have a direct role in overseeing the auditing of municipalities or departments, it is crucial for the Committee to be informed of the overall audit outcomes and any issues faced during the audits. This ensures that the Committee can support the AG effectively and address any problems that may impact the audit results or process. By receiving these outcomes before public release, the Committee can provide timely feedback and support to address any challenges encountered during the auditing process.

The Chairperson emphasized the Committee’s primary focus of supporting the AG rather than directly overseeing municipal or departmental audits. The Committee’s role involves addressing operational challenges and advocating for necessary resources to support effective performance audits. He underscored the importance of performance audits beyond mere compliance with regulations, highlighting the need for adequate funding to improve service delivery.

The Chairperson’s remarks were aimed at ensuring that the Committee’s efforts are directed towards enhancing the audit process and supporting the AG in overcoming any difficulties faced during audits. This focus on operational support rather than direct oversight allows the Committee to play a crucial role in improving the overall effectiveness of the auditing process and ensuring that performance audits contribute meaningfully to service delivery improvements.

Ms Spies highlighted the significance of the Public Audit Act in auditing public entities and state-owned enterprises. She pointed out that the Committee’s role is to ensure that the Act aligns with desired outcomes and provides the AG with the necessary tools to conduct effective audits. The Public Audit Act is crucial for enabling comprehensive and effective audits of public entities.

Ms Spies said it was the Committee’s responsibility to review the Act to ensure robust auditing practices. This involves evaluating if the Act provides adequate support and resources for AGSA to carry out its duties effectively, ensuring that the auditing process meets the intended objectives to improve public sector accountability and performance.

In response to Mr Gouws asking who was responsible for drafting the Act, Mr Hlekiso clarified that it was the Ad-Hoc Committee that had formulated these mechanisms.

Mr Mgxaji corrected Mr Hlekiso and noted that the Committee no longer handles remuneration conditions for audit services. This responsibility was removed from the Committee’s scope following the amendment to the Public Audit Act.

Audit Fees
Mr Hlekiso discussed how the Auditor-General (AG) determines audit fees. The AG calculates these fees after consulting with the Standing Committee on the Auditor-General (SCoAG). The AG sets the fee percentage charged to the auditees. Historically, the AG has set fees below the market rate that private audit firms would charge. This was problematic because, due to capacity issues, the AG would sometimes outsource audits to external firms, which charged market rates. Thus, the AG would pay these external firms at market rates despite charging the auditees less. Mr Hlekiso questioned if this issue had been addressed or if the AG still sets its rates below the market rate, which had been a significant problem in the past. (For detailed information, see presentation).

Discussion
Mr Subrathie responded by emphasizing the critical nature of the matter. The financial viability and sustainability of the AGSA depend on charging fees that are both economical and viable. This is particularly crucial when it outsources work to other audit firms that charge market-related fees. There was a need to address this, especially focusing on the recoverability of fees from auditees. Ensuring the AG charges a market-related fee is vital to maintain its economic viability, especially when outsourcing work, to prevent compromising the institution's financial stability and operational efficiency.

The Chairperson acknowledged Mr Subrathie’s concerns and expanded on the problem of outstanding debt owed to AGSA. It faces a substantial backlog of outstanding payments, amounting to over R1.08 billion. This backlog affects AGSA’s ability to recover fees from struggling municipalities, especially in rural areas.

There is a need for a comprehensive discussion on AGSA’s funding model and its impact on the institution’s independence and financial capacity. While funding from Parliament might compromise AGSA’s independence, recovering outstanding debt and ensuring adequate funding is critical to enabling effective audits.

Mr Hlekiso expressed frustration with the current funding model, which he described as making AGSA act as a debt collector. He criticized the model for failing to ensure full payment of outstanding fees by National Treasury. While the funding model aimed to make the AG financially independent, it indirectly relies on funds from the fiscus, undermining its independence.

Mr Hlekiso suggested that adopting a model similar to that used in other countries, where the AG is funded through the fiscus, might be beneficial. He referenced the Asmal Kader Report from 2007, which recommended that Chapter 9 institutions’ budget should be managed through Parliament. This model could alleviate some of the financial constraints faced by AGSA and improve its ability to perform audits effectively.

Mr Subrathie acknowledged these points and agreed that discussion is necessary. He expressed interest in understanding how much of the AG’s resources are dedicated to debt collection and if non-collection of fees affects the efficacy and independence of the AG Office. He emphasized the practical implications of AGSA being forced to act as a debt collector and suggested exploring options to recover fees directly from government entities to relieve the AG from this responsibility. Addressing this is crucial for maintaining the AG’s operational efficiency and independence.

Mr Gouws agreed but pointed out a significant issue as the current model allows auditees to decide on payments thus compromising AGSA’s effectiveness. He requested an example of an auditee, such as a municipality, to illustrate this problem. He suggested that there should be legislative provisions ensuring that audit fees are prioritized and paid without negotiation, given AGSA’s importance in maintaining public trust. He proposed that audit fees should be addressed in the current administration to ensure that AGSA is not constrained by financial limitations that could impair its function.

Mr Hlekiso stated that the Public Audit Act provides specific mechanisms for the Auditor-General to collect debt. He called the current funding model “silly” as despite the Act’s provisions which support the AG’s ability to collect audit fees, the implementation remains problematic. These provisions were supposed to facilitate debt collection but have not effectively addressed this.

The Chairperson said it was of critical importance to address the funding model which warrants a thorough examination. The Committee had brought up the need to consider the establishment of an Ad-Hoc Committee to amend the Act. He proposed that a Committee researcher be tasked with investigating the entire process and decisions of the previous amendments. This investigation would aim to clarify why an Ad-Hoc Committee was established rather than utilizing the Standing Committee. This would enable the Committee to make informed decisions, especially given the issues in the Act that need to be revisited in this five-year term. The Chairperson stressed the necessity for specific amendments to streamline the Act.

Mr Beesley noted that the AG's Office is scheduled to present next week. He needed to thoroughly understand how the funding model affects the AG's ability to fulfil its mandate, employ staff and manage unpaid debts. He suggested that the Committee should ensure the AG is adequately protected and funded. He anticipated that the AG's presentation would provide insights into these issues.

The Chairperson agreed affirming the importance of engaging with AGSA next week to explore the implications of the funding model.

Sixth Parliament Legacy Report
Mr Mgxaji provided an overview of the key issues carried over from the Sixth Parliament for consideration in the Seventh Parliament. The Sixth Parliament SCoAG highlighted:

• SCOAG is tasked with maintaining the Auditor-General’s independence and overseeing its operations. The substantial outstanding debt of R1.08 billion primarily comes from local governments and state-owned enterprises (SOEs), and it poses a serious threat to the financial stability of AGSA. The Committee needed to engage with National Treasury to find solutions to this debt challenge.

• AG’s capacity to audit all state-owned enterprises listed under the Public Finance Management Act. Due to limited resources, the AG currently audits only a subset of these entities. Expanding audit coverage will require additional resources.

• The large-scale implementation of performance audits is constrained by resource limitations. Support from the Office of the Institutions Supporting Democracy (OISD) is needed to address this.

• The phased implementation of amendments to the Public Audit Act is progressing, with the AG required to report quarterly on the implementation status. Recommendations from the SCoAG study tour to Canada on performance audits should be prioritized to enhance AGSA audit practices.

• AGSA’s funding model relies predominantly on audit fees and has led to financial instability. A review of section 36(1) of the Act to improve the funding structure and ensure the AG’s financial sustainability was needed. (See document for details).

Discussion
Mr Beesley asked about section 36(1) and which Act was being referenced.

Mr Mgxaji replied that the reference was to the Public Audit Act, which governs AGSA.

The Chairperson requested Ms Balie circulate the Canadian study tour report to all Committee members. Although the report is accessible, forwarding it directly would ensure that all members have convenient access.

Mr Subrathie noted the significant emphasis placed on the performance audit methodology used by the Canadian Office of the Auditor General. This methodology includes evaluating not only financial statements but broader aspects such as economy, efficiency, effectiveness and environmental sustainability. As a new Committee, he suggested that members should be trained on these performance audit elements to better understand their value and to effectively support the AG.

Mr Subrathie inquired about the auditing status of entities listed in Schedule 2 of the PFMA. He asked which entities are currently not audited by AGSA and sought information on their financial accountability. All institutions receiving public funding should be audited, according to the Act, and he asked which entities have not been audited and the implications of this.

Mr Subrathie asked about the level of women empowerment in AGSA. In recognition of Women’s Month, the Committee should be informed about the progress of such initiatives.

The Chairperson agreed that these issues should be explored with AGSA during the induction session. The Act provides discretion for auditing Schedule 2 entities listed in the PFMA. Although AGSA may audit these entities, it is not a mandatory requirement. Many complex entities, such as Transnet and Eskom, are audited by external auditors rather than AGSA. This situation has led to inconsistencies and problems, which the Committee should address with AGSA. There was a need for establishing a standard for public audits and to obtain a comprehensive report on the progress made and the current status of audits for entities like Transnet and Eskom.

Mr Mgxaji confirmed that the performance audit methodology used by the Canadian Office of the Auditor General was a key focus during the study tour. This approach assesses not only financial statements but broader impacts such as economy, efficiency, effectiveness, and environmental sustainability. He agreed on the importance of the Committee understanding these elements to fully appreciate their value and to support the AGSA effectively.

Mr Mgxaji explained that section 43 of the Public Audit Act allows the AG to exercise discretion in auditing the 21 companies listed as Schedule 2 entities. In recent years, AGSA has implemented guidelines for appointing external auditors to cover SOEs not directly audited by AGSA. While AGSA has increased its involvement in auditing certain SOEs, such as Transnet and Eskom, it is not mandated to audit all listed entities. AGSA Annual Reports for 2022 and 2023 provide information on the list of entities and the age of outstanding debts. This data is included in AGSA financial statements and can be accessed by the Committee.

Mr Beesley requested a breakdown of AGSA outstanding debtors and the age of the debt. He asked if such summary reports are presented to the Committee or if it is bypassed.

The Chairperson confirmed that summary reports on the PFMA and MFMA audits would be provided to the Committee. These summaries will focus on the challenges and how the Standing Committee on Public Accounts (SCOPA) and the Portfolio Committee on Cooperative Governance and Traditional Affairs (CoGTA) address this with debtor auditees.

Mr Mgxaji noted that AGSA has made progress in taking over audits for entities like Transnet and is working on assuming responsibility for Eskom. Information on the list of audited entities and the age of outstanding debts is available in the AGSA Annual Report and financial statements.

The Chairperson thanked everyone for their contributions and noted that many of the discussed issues would be addressed in upcoming meetings.

Committee programme
The Chairperson outlined the schedule for upcoming meetings including:

Introductory meeting with AGSA – 30 August
Briefings by OSID and National Treasury on funding model – 6 September.
Briefing by AGSA on MFMA outcomes – 13 September.
Briefing by AGSA on its Annual Report – 18 October.
Follow-up meeting with National Treasury – 25 October.
Consideration of Committee report on AGSA Annual Report – 1 November.
Briefing by AGSA on its draft strategic plan and budget – 15 November.
Committee report on AGSA strategic planning and budget – 22 November.
Briefing on PFMA audit outcomes – 4 December.

Discussion
Mr Subrathie asked if the Annual Report is tabled in Parliament before being presented to the Committee on 18 October, and if so, how the process unfolds. He inquired about the quorum requirements for Committee meetings to ensure full attendance and effective decision-making.

The Chairperson explained that "tabling" refers to the process where a report is submitted to the Speaker of Parliament, who then forwards it to the Committee. Although the term "tabled" is used, it is akin to the legislative process where a document is merely referred to a Committee without a formal debate. In practice, the AGSA Annual Report is submitted to the Speaker and then referred to the Committee. The Chairperson clarified that this procedural understanding ensures the report is properly reviewed by the Committee.

On quorum, the Chairperson stated that a third of the members, which equates to four members, is needed to continue with committee business. For making decisions, a majority is required, meaning 50% plus one member, which totals six out of eleven members. Currently, with only nine members on the Committee due to two vacancies, maintaining a quorum of six is necessary for decision-making.

Mr Gouws raised concerns about absenteeism in previous meetings and suggested that the Committee should consider implementing rules for handling members who do not attend. All members need to participate actively, regardless of political affiliations, to ensure effective functioning and decision-making in the Committee. He urged that the matter be addressed promptly to avoid challenges in future meetings.

The Chairperson acknowledged Mr Gouws’s concerns and referenced Rule 38(1) of the National Assembly Rules, which stipulates that members who miss meetings consecutively should seek permission from their party. However, parties often grant permission for political or constituency work, which can lead to absences. To mitigate this, the Chairperson encouraged parties to appoint alternate members to ensure quorum and effective participation.

Mr Subrathie, representing the ANC, expressed his commitment to ensuring maximum representation from his party on the Committee. He suggested that members should prepare thoroughly for meetings by reviewing all reports in advance to facilitate productive and timely discussions. Being well-prepared would help the Committee manage its time effectively and contribute to robust discussions.

The Chairperson agreed and underscored the importance of receiving documentation well in advance. The Committee has requested stakeholders, including National Treasury and AGSA, to provide presentations at least seven days before meetings to ensure thorough preparation and productive engagements.

Ms Spies appreciated the timely and well-structured preparation for this meeting. This level of organization is not always experienced in other Committees. She commended the Chairperson and the support staff for their efforts. It was disappointing to see some members absent despite the advance notice. She suggested that others could learn from the Committee’s work ethic.

The Chairperson acknowledged the support staff’s role in organizing the meeting efficiently and expressed gratitude for their efforts. Their hard work is crucial for smooth Committee operations.

Mr Subrathie seconded appreciation for the meeting's preparation. He complimented the Chairperson and support staff for their effective coordination, which contributed to a productive meeting.

The Chairperson concluded the meeting by thanking everyone for their contribution. Continued attendance and participation and the need for collaboration and preparation was important as the Committee moves forward with its work.

Meeting adjourned.