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Environment in which SCoAG operates – AGSA mandate and stakeholders

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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.

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AGSA mandateConstitution: Establishes the AG as the external auditor of all national and

provincial state departments and municipalities, and any other institution or accounting entities required by legislation

Recognises the independence of the AG, subject only to the requirements of the Constitution and the law

Requires the AG to be impartial and to perform his/her powers and functions without fear, favour or prejudice

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AGSA mandate (cont.)Constitution (cont.): Prohibits any person or organ of state from interfering with

the functions of the AG Requires the AG to submit audit reports to any legislature or

any other authority prescribed by national legislation, and that all audit reports be made public

Provides for the granting of additional powers and functions as prescribed by national legislation

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AGSA mandatePFMA and MFMA Acts

Regulate and secure sound and sustainable financial management

Ensure that all revenue, expenditure, assets and liabilities are managed efficiently and effectively

Stipulate responsibilities of persons entrusted with financial management in all public sector organisations.

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AGSA mandate PFMA and MFMA Acts (cont.):

The AG audits and reports on all the accounts, financial statements and financial management of defined public sector administrations, institutions and entities in accordance with the standard of compliance with the PFMA/MFMA and related Acts, guidelines and procedures.

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Stakeholders of AGSA

The AGSA’s reputation promise is:

The Auditor-General 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.

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Stakeholders of AGSA In order to do deliver on its mandate effectively,

the AGSA has to be known, understood and recognised by all stakeholders as:

the Supreme Audit Institution of South Africa; which has a constitutional mandate and which exists to strengthen our country’s democracy;

an organisation that enables oversight, accountability and governance in the public sector, thereby building public confidence.

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Stakeholders of AGSA• A stakeholder is any person or group with a direct interest,

involvement or investment in an organisation, and who can either hinder or assist the AGSA’s ability to impact.

• Instead of using the traditional “external”/”internal” categories to group all relevant stakeholders together; a segmentation was done based on the nature of the relationship the AGSA has with the various stakeholders.

• There is not just one single reason for managing stakeholder relationships – different needs require different relationships.

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Stakeholders of AGSA• The AGSA has four categories of stakeholders based on the

nature of the relationship and the desired outcome .• The nature of these relationships are characterised by: - dependencies (need to influence);

- supporting (need to empower);

- partnering (need to get agreement);

- delivery (need to manage service delivery against agreed

standards priorities & legislation). Pay for service/product.

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Stakeholders of AGSA• The AGSA stakeholders are therefore categorised and

segmented as follows: - Beneficiaries;

- Ambassadors;

- Partners; and

- Suppliers/customers

• The stakeholder segmentation is done based on the purpose and nature of the relationship, interaction and the desired outcome.

- AGSA Audit Committee- Media- AGSA employees and leaders- Professional bodies- Audit firms

Relationship based on:

- Partnering* Need to get agreement

Type of interaction: - Business interactions, guided by some form of agreement.

Relationship Type of interaction AGSA stakeholders

Beneficiaries:

Stakeholders who benefit from the effective delivery of the AGSA’s mandate or whom the AGSA is dependent on.

Relationship based on:

- (Inter) dependency to benefit * Need to influence

Type of interaction: - Relationship-building- Liaison - Information-sharing

- Legislators/Non-executive- Executive - Media- Auditees (including international Auditees)- Governance structures - Chapter 9s- SA public- AGSA employees & leaders - Tertiary Institutions- International bodies (SAIs)

AGSA stakeholder segmentation

Influence

Demand

Partners:

Stakeholders who work with the AGSA to help effectively deliver on its mandate, or whom the AGSA regard as partners.

- Ex-employees- Ex- trainees

Relationship based on:

- Loyalty to the organisation* Need to influence & empower

Type of interaction: - Liaison- Information-sharing

Ambassadors

Stakeholders who can promote the AGSA’s mandate/performance to other stakeholders, based on their feelings of loyalty to the organisation.

- Relationship based on: - Demand for service delivery* Need agreed terms/conditions

Type of interaction: - Official/formal business interactions, guided by SLA/contracts

Suppliers/customers:

Stakeholders who work for the AGSA to help deliver on its mandate, or whom the AGSA provides a service/product to.

Relationship Type of interaction AGSA stakeholdersInfluence

Demand

AGSA stakeholder segmentation (cont)

- Audit firms- Suppliers- Internal Auditors- External Auditors - Professional bodies- Media- Employees

AGSA Types of Stakeholder Groups

The AGSA has two types of stakeholders: 1. Constitutional - stakeholders that have direct involvement with the AGSA’s audit reports. 2. Non-Constitutional – stakeholders whose relationship helps the AGSA to meet its goals and operate outside boundaries of the constitution.

Constitutional Stakeholders

Stakeholder Group Stakeholder sub-group

Professional Bodies South African Institute of Chartered Accountants, Information Systems Audit and Control Association, South African Institute of Professional Accountants

Service Providers Audit Firms, Internal and External Auditors, Professionals/consultantsVendors Vendors

Media Print and Broadcast media

Prospective Employees University StudentsEmployees EmployeesSA Public SA PublicSAI INTOSAI, AFROSAI

Non- Constitutional Stakeholders

Stakeholder Group Stakeholder sub-group

Legislative Legislators

Executive ExecutiveMedia Print and Broadcast media

Auditees CFO’s, National Accounting Officers, Provincial Accounting Officers, Local Accounting Officers

Governance Structures Governance StructuresChapter 9 Institutions Chapter 9 Institutions

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Stakeholders of AGSA (cont.)Relationship between the AG and SCOPA: SCOPA is the mechanism through which the National

Assembly exercise control over the expenditure of public money which it has appropriated to meet the needs of the country

Only by ensuring that financial affairs are managed properly, will the government be able to effectively realise its goals and visions

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Stakeholders of AGSA (cont.)AG’s responsibility to report to SCOPA The Constitution of the Republic of South Africa, Act No.

108 of 1996, recognises the need for Parliamentary control of public money by providing for the establishment of an Auditor-General with the powers and functions to, inter alia:

“… audit and report on the accounts, financial statements and financial management of all national and provincial state departments and administrations; all municipalities; and any other institution or accounting entity required by national legislation to be audited by the Auditor-General” [Section 188(1)]

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Stakeholders of AGSA (cont.)AG’s responsibility to report to SCOPA (cont.)

“The Auditor-General must submit audit reports to any legislature that has a direct interest in the audit…..All reports must be made public” [Section 188(3)]

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Stakeholders of AGSA (cont.)Accountability relationship between AGSA and SCoAG The PAA in turn provides for the establishment of a

parliamentary oversight mechanism to assist and protect the Auditor-General to ensure the independence, impartiality, dignity and effectiveness of the Auditor-General and to advise the National Assembly.

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Stakeholders of AGSA (cont.)Accountability relationship between AGSA and SCoAG (cont.) This mechanism is then established in terms of section 10(3) of

the PAA, to implement section 2(c) of the PAA — (i) to assist and protect the Auditor-General in order to ensure

the independence, impartiality, dignity and effectiveness of the Auditor- General; and

(ii) to advise the National Assembly.

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Conclusion

Questions?

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