Audit outcomes - Briefing to the Chairperson of the Department of Mineral Resources Portfolio CommitteePresenters:Jan van Schalkwyk Corporate ExecutiveLufuno Mmbadi Senior ManagerYaseen Jeewa Senior ManagerCarl Wessels Senior Manager

08 July 2014

Our reputation promise/mission

The Auditor General of South Africa has a constitutional Mandate and, as the supreme audit Institution (SAI) of South Africa, it exists to strengthen our country’s democracy by enabling oversight, accountability and governance in the public sector through auditing, thereby building public confidence.

Index

Oversight and Accountability Model Asserting Parliament’s Oversight Role In Enhancing Democracy

In the South African context, oversight is a constitutionally mandated function of legislative organs of state to scrutinise

and oversee executive action and any organ of state.

Oversight and Accountability Model Asserting Parliament’s Oversight Role In Enhancing Democracy

Oversight and accountabilityParliament has established mechanisms such as portfolio and other committees to fulfil its oversight and accountability mandates in terms of the Constitution.

Committees can interact with civil society organisations, organised business, experts and professional bodies as a way of enhancing accountability and can call Ministers and departmental heads to account on any issue relating to any matter over which they are effecting accountability within the ambit of the provisions of sections 56 and 69 of the Constitution and legislation.

Parliamentary committees have various tools of oversight, including departmental briefing sessions, annual and departmental budget analyses, calls for submissions and petitions from the public, the consideration of strategic plans and annual reports, and public hearings.

Oversight and Accountability ModelAsserting Parliament’s Oversight Role In Enhancing Democracy

Oversight and accountability - continuedCommittees can use the activities and reports from state institutions supporting constitutional democracy to enhance Parliament’s oversight functionsThe institutions are:• The Auditor-General of South Africa (AGSA);• The Commission for Gender Equality (CGE);• The Public Protector (PP);• The Electoral Commission (EC);• The South African Human Rights Commission (SAHRC); and• The Commission for the Promotion and Protection of the Rights of Cultural, Religious and• Linguistic Communities (CRL Rights Commission).

Partnership Between The Portfolio Committee and The AGSA To Strengthen Oversight

The AGSA is committed to support the realisation of a public service that has robust financial and performance management systems that contribute to enhanced oversight and public accountability through auditing.

In order to support the Portfolio Committee with their oversight role we would like to propose that we meet on a regular basis. We are confident that these engagements will enable both our institutions to contribute to a strengthened democracy in our country.

Partnership Between The Portfolio Committee and The AGSA To Strengthen Oversight

The AGSA plans our engagements to run concurrently with the oversight program of the portfolio committee to provide members of parliament with the necessary information/guidance to enable them to effectively execute their oversight function. We therefore recommend that we meet as follows:

•Before the annual performance plans for the portfolio is reviewed by the portfolio committee to discuss the findings identified from the pro-active audit of the predetermined objectives of the department•Before the portfolio committee compiles their Budget Review and Recommendation Report to brief the committee on the audit outcomes of the entities for the latest financial year•In addition, we can also come and brief the portfolio committee on our audit processes and audit messages during your work group if required.

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• Simplicity, clarity and relevance of messages• Identifying stakeholder needs and expectations of AGSA reports• Ensuring AGSA reports are written in simple, plain, non-technical

language that the target audience will understand• Contextualising audit messages to enhance understanding• Visibility of the leadership• Ensuring efficiency and effectiveness of stakeholder interactions• Developing required leadership competencies through mentoring,

coaching and leadership programmes and processes for effectively managing change

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Regularity Audit - process

Analysis of Prior Year Audit Outcomes for the Portfolio

1. Analysis of prior year audit outcomes for the portfolio (continued) Analysis of Prior Year Audit Outcomes for the Portfolio

Progress on Prior Year Commitments to Improve Audit Outcomes (DMR)

Considerations for Portfolio Committees when Reviewing the Annual Performance Plans and Budgets of Entities

• Are the Strategic Plans and Annual Performance Plans of the department and entities aligned to the National Development Plan

• Does the entities have adequate resources (human and financial) available to achieve predetermined objectives

• How are the entities ensuring that Strategic Plans and Annual Performance Plans will be achieved (performance contracts etc.)

• Are the indicators and targets realistic (achievable in the timeframe proposed)

• The portfolio committee can request the Department provides them with quarterly progress with regard to predetermined objectives and contributions to NDP. The feedback can be combined with actions implemented by the accounting officers and/or authorities to address areas where quarterly targets are not achieved in actual performance

• Review annual achievement of predetermined objectives by entities (Annual Reports)

• Review changes to strategic plans and annual performance reports

Pre-determined Objectives (Technical Guidance)

Performance indicator Guidelines ito FMPPI:•Reliable: the indicator should be accurate enough for its intended use and respond to changes in the level of performance.•Well-defined: the indicator needs to have a clear, unambiguous definition so that data will be collected consistently, and be easy to understand and use.•Verifiable: it must be possible to validate the processes and systems that produce the indicator.•Cost-effective: the usefulness of the indicator must justify the cost of collecting the data.•Appropriate: the indicator must avoid unintended consequences and encourage service delivery improvements, and not give managers incentives to carry out activities simply to meet a particular target.•Relevant: the indicator must relate logically and directly to an aspect of the institution's mandate, and the realisation of strategic goals and objectives.

Pre-determined Objectives (Technical Guidance Continued)

How should a target be defined?

A useful set of criteria for selecting performance targets is the "SMART" criteria ito the FMPPI chapter 3.3;•Specific: the nature and the required level of performance can be clearly identified•Measurable: the required performance can be measured•Achievable: the target is realistic given existing capacity•Relevant: the required performance is linked to the achievement of a goal•Time-bound: the time period or deadline for delivery is specified.

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Guidance to Departments for Indicators and Targets

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Guidance to Departments for Setting Indicators and Targets (Cont.)

Questions