Transcript Slide 1

Clean Audit Presentation
DATE: 14/07/2009
TIME: 10: 00 -12HOO
Venue: S-37
Purpose & objectives
of the meeting
• Sharing of information and approach with regard
to ‘Operation Clean Audit 2014 programme’
• To gain support with regard to the implementation
of the project
• Build and strengthen interdepartmental relations and
public-private partnerships beyond 2014
•
• Learn from each other and make sure our efforts
are coordinated within the public sector
• To gain and share experiences on governance in
general,
• corporate governance in particular
Guiding Vision
• By 2014, all the 283 municipalities and 9
provinces departments in South Africa will have
achieved clean audits on their Annual Financial
Statements and maintaining systems for
sustaining quality financial statements and
management information.
Programme Goal
• Assist all the municipalities and provincial
departments to achieve clean audit
opinions by 2014, improve and sustain
the quality of financial statements.
Programme Purpose
• To address all issues raised by Auditor General
and reduce vulnerability of risks in the provincial
departments and municipal audit reports through
targeted projects central to the sustainability of
sound financial management accountability
and best practices.
2. Background
• Post 1994, the government has and still puts
service delivery improvement on the agenda.
However, Auditor-General’s reports continue to
spell-out queries relating to ineffective institutions,
ineffective structures (internal audit units and
audit committees), poor performance or absence
of systems, especially financial management and
systems. This negative picture seriously affects
government service delivery plans in general and
corporate governance in particular.
• Both provincial and local governments are faced
with challenges which among others include:
• Inadequate skills on planning, budgeting; public
financial management, including expenditure
management
• Poor interface between financial and non-financial
information (in-year-monitoring and quality annual
reporting)
• Inability to manage cash-flow significantly
• Inadequate skills on credit control and debt
management, including basic financial
accounting and filling or record keeping in most
instances
• Duplication of payments in some instances and
amounts not accounted for (lack of financial
accountability)
• Lack of systems to manage audit queries and
recommendations, both internal and external
auditing
• Inadequate systems with regard to corporate
governance (especially, conflict of interest and
accountability frameworks, and effective
Integrated risk management system) within
provincial departments and municipalities
• Leadership and management issues, especially
decision making with regard to audit queries, both
from internal auditors and external auditors
(leadership)
• Non-existence or dysfunctional of audit committees
and internal audit committees (governance)
• Inadequate administrative and political oversight to
strengthen accountability and responsibility
(oversight)
3. Purpose, goal and
measurable objective:
Operation clean audit
• The project has the following purpose, goal
and measurable objective:
• Purpose: The main purpose of the project is to
address challenges faced by both municipalities
and provinces with regard to audit management,
especially audit findings and queries from the
Auditor-General.
Strategic Goal:
• Clean audits both in municipalities and
provincial departments by 2014.
• Measurable objective: Provision of technical
assistance to both provinces and municipalities on
management of audit queries in order to improve
financial management, corporate governance,
including systems, more importantly to improve the
lives of ordinary people.
4. Operation clean audit:
Scope and standards
• Operation clean audit will focus on both
provinces and municipalities so that the
relationship between spheres of government is
strengthened. This could assist the project itself,
to be coherent, coordinated and sustainable.
4.1 Project focuses on:
• Improvement of Annual Financial Statements
and their rate of timeous submission to the
Auditor General
• Strengthening accountability and governance
mechanisms, systems and procedures
• Mechanisms to implement remedial plans to
audit findings and queries raised in the audit
reports
• Strengthening the capacity of provinces to
support and oversee municipalities, in relation to
financial management
• Development of a corporate governance manual
and corporate governance pledge for
municipalities, especially on conflict of interest
• Mechanisms to improve revenue and expenditure
management
• Developing an accountability framework to
strengthen oversight and support: Provincial and
local government strategic relationship
5. Consultative Process:
Stakeholders
• For this project to succeed and have an impact,
both within government and our communities, a
robust inclusive consultative process has to be
done and implemented.
This consultative process is
designed to achieve the following:
• Effective political management of the project
• Improved departmental coordination and support
• Enhanced intra-departmental coordination
• Improved and strengthened public-private
partnership on matters of corporate governance
and service delivery
• Improve transversal relations between
government departments to support good
governance
• Enhanced intergovernmental relations between
spheres of government within the constitutional
spirit of co-operative governance
• Commitment and buy-in to the goals and
outcomes of the project
5.1 Internal:
Department of
Co-operative Governance
and Traditional Affairs
• Municipal Performance Monitoring and support
(MPMS) unit
• Performance management/ monitoring system
• Intergovernmental fiscal relations
• Anti-corruption / Ethics
• Local government leadership academy
5.2 External stakeholders:
Interdepartmental
• MINMEC, especially MEC’s on local government
Presidential Co-ordinating Council (PCC)
• National Treasury
• Department of Public Service and Administration
(DPSA)
• Heads of provincial Treasuries through National
Treasury
• National Department of Water Affairs and
Environmental
•
•
•
•
•
•
National Department of health (DoH)
Provincial Departments of local government
South African local government association (SALGA)
All provincial Directors-General (Premiers offices)
Some Heads of all provincial departments
Office of the Auditor-General
• National Treasury/ Office of the Accountant-General
• Provincial offices of Auditor-General through their
National office (Pretoria)
• Public Service Commission (PSC)
• Provincial offices (PSC) through their National
office, Pretoria.
• National Assembly and Provincial legislatures
Table 5.1.1
External stakeholders
5.3 External stakeholders:
private-public partnership
• Institute of Directors (IoD), adivise on corporate
governance
• Business South Africa (BUSA), supportive
venture on corporate governance
• Development Bank of Southern Africa (DBSA),
for funding
• Commercial Banks, funding the project and
partners in corporate governance
• Key reputable individual consultants and
companies on financial management auditing,
financial systems and corporate governance, to
advise and develop frameworks on the above.
• Institute of Municipal Finance Officers (IMFO)
• South African Institute of Chartered Accountants
(SAICA), providing technical advise on
accounting and auditing.
5.4 Other projects
• Ayihlome Campaign
• Road shows on waste management (Clean
cities/towns)
• Corporate governance conferences/Seminars
Conclusion
• Leadership
• Technical skills
• Effective political oversight
• Support from the private sector
• Support from other departments (horizontal and
vertical) and other Chapter nine institutions, eg
AG and PSC
• Effective Communication
• Attitude towards public finances and systems