Remuneration of Auditor-General & Committee Programme

Standing Committee on Auditor General
17 August 2006
remuneration of auditor-general & committee programme

Acting Chairperson: Ms B Hogan (ANC)

Documents handed out;
Establishment of the oversight mechanism of the Auditor General

Summary
The new Standing Committee on the auditor general discussed their coming agenda and the Auditor-General’s remuneration in terms of finding the best means of identifying an appropriate package for the Auditor-General. The meeting did not last as long as expected but it was deemed fit that the process continue in the following week when the present Auditor-General presented his immediate package, so that the Committee would have real figures to work with.

Minutes
The Chairperson commenced the meeting by handing out a document containing the statutory requirements for the Standing Committee of the Auditor General, so that members would know what was expected of the Committee.

The Committee discussed potential meeting times and agreed to meet on Wednesday afternoons at 14:00.

The chairperson drew attention to the criteria for the appointment of the Auditor-General, Section 7 of the Act (AUDITOR-GENERAL ACT, 1995, NO. 12 OF 1995) which stated that the committee responsible for conducting the oversight must consult the person appointed with regard to their salary. According to the section the Committee was also responsible for making recommendations to the President about the conditions of employment for the nominee appointed to the position of Auditor-General. The Committee would also have to make recommendations on the Auditor-Generals salary and benefits, taking into the account their knowledge and experience was required to be of the same caliber as that of the top echelon, and which had to be paid from the funds of the Auditor-General. The conditions of the agreement were said to be unalterable by the President.

Mr W Trent (DA) mentioned that the committee also had the obligation of making sure that the Auditor-Generals contract would not last more than 10 years, or last less than 5 years.

Ms J Fubbs (ANC) asked if point 3 (of the document handed out) would be amended in the Act.

Ms B Hogan (ANC) responded saying that the point would not be removed and asked how recommendations to the President would be made. Ms Hogan went on to suggest that a subcommittee be set up which could debate and go into detail on what the recommendations would be based upon.

The chairperson expressed an urgent need to acquire information on the Auditor-General’s earnings, as well as the background to Section 219 of the Constitution and stated that a distinction would have to be made between the packages of the Auditor-General and the Deputy Auditor-General.

Ms Hogan asked if it would be constitutional to place the Auditor-General’s salary in the same range as that of judges and what would be considered to be the top echelon.

Adv F Jenkins (Parliamentary Legal Adviser) advised the committee that when they discussed salaries they were looking at the salaries of judges and not magistrates, because there were already enough issues surrounding magistrates salaries. Comparing the salary of the Auditor-General to top judges would be comparing the salaries to the ‘top echelon’. The definition was said to be left vague so that the Committee would be able to make the recommendation at their discretion.

Ms Fubbs reminded the Committee that when comparing the Auditor-Generals salary to that of the judges, it had to be kept in mind that the judges salaries were market-based and not fixed, thus calculations of the Auditor-Generals salary would have to consider such factors.

Ms Hogan discussed the framework on which the Auditor General and the Deputy Auditor Generals’ salaries were decided, and remarked that these were other areas of concern which needed to be taken up with the President as they left the Auditor-General vulnerable.

Mr Trent mentioned that Auditor-Generals’ were fond of performance contracts, thus the Auditor-General must also be given a performance contract which they would be monitored and judged by.

Ms Fubbs raised the issue of bonuses and said that in instances where Auditor-Generals would be offered a bonus, judges could not because of the type of work they were involved in. Ms Fubbs also mentioned that the process the Committee was going through could get complicated if they were to focus on designations such as ‘top echelon’ and were opposed to focusing on the guidelines available.

Mr Trent asked who decided the judges and public protectors’ salaries and suggested that the Committee work with the legislation they had because of the deadline facing them.

Ms Fubbs responded saying that there was a framework in place which was used to determine their salaries, and also mentioned that the budget would have to be presented in six months.

Adv Jenkins mentioned that Section 7 had to do with the conditions of employment, and mentioned that the appointed Auditor-General might be coming from a good salary and thus they would have to be offered more money, unless they had little experience which would allow for their salary to be negotiated for a lesser amount.

Dr G Woods (NADECO) questioned whether, once the Committee knew what judges were earning and what the appointed auditor general was earning, they would be in a position to offer and negotiate bonuses in the future once they had established a starting salary. Dr Woods recommended that they call in an expert who had done research into the area to obtain new views and advice if they found themselves having difficulties.

Ms Hogan stated that the most senior salary was set at R728 000 per year. The chair continued to discuss the package earned by judges, before suggesting that an actuary be called in to break down the figures.

Mr Trent mentioned that they must be aware of the fact that the salary was in his opinion more or less that earned by judges, thus the Auditor-General could negotiate for more money.

Ms Hogan remarked that the Committee would have to bring in a human resource person and an actuary, and would need to determine when the President would need a report from the Committee.

Mr Trent enquired if the Committee had a budget because actuaries were regarded as not cheap to employ.

The chairperson said that the process should be completed by mid-September and read through the legislation with the Committee. He said that the Act was clear on what the Committee was supposed to do.

Mr S Asiya (ANC) thought that there was a need for the Committee to learn from other countries and expressed his hope for the committee to reach a common understanding.

Mr Woods stated a need for regular reports from the audit committee

The meeting was adjourned.