13 October 2015

1. Briefing to the Portfolio Committee on PoliceAudit outcomes of the Police portfolio for the 2014-15 financial year 13 October 2015

2. Reputation promise/mission The Auditor-General of South Africa has a constitutional mandate and, as the Supreme Audit Institution (SAI) of South Africa, exists to strengthen our country’s democracy by enabling oversight, accountability and governance in the public sector through auditing, thereby building public confidence.

3. Purpose of the presentation Annually oversight committees set aside time to focus on assessing the performance of departments. On completion of the process, portfolio committees are required to develop department-specific reports, namely budgetary review and recommendations reports (BRRR) which express the committee`s view on the department’s budget for recommendation to the National Treasury ahead of the following year`s budget period. Our role as the AGSA is to reflect on the audit work performed to assist the portfolio committee in its oversight role in assessing the performance of the departments taking into consideration the objective of the committee to produce a BRRR.

4. The scope of AGSA audits

5. Contents Slide no. 1. Overall audit outcomes of the Police portfolio 6 2. AGSA’s six key focus areas 7-13 3. Irregular expenditure identified for the portfolio 14 4. Combined assurance and assessment of assurance providers 15-16 5. Drivers of key controls for the portfolio 17 6. Root causes and recommendations 18 7. Minister’s commitments to address root causes 19

6. 1. Overall audit outcomes of the Police portfolio 2014-15 PFMA Unqualified with no findings Unqualified with findings Qualified with findings Adverse with findings Disclaimed with findings 4 auditees 3 auditees 3 auditees

7. 2. AGSA’s six key focus areas 2014-15 PFMA Quality of submitted financial statements Quality of submitted performance reports Compliance with legislation (SCM) Good Concerning Intervention required Human resource management Information technology Financial health Improvement Stagnant or limited progress Regressed

8. 2.1 Quality of submitted financial statements 2014-15 PFMA Outcome after corrections Outcome if NOT corrected Financially unqualified with findings Financially qualified (qualified/ disclaimed with findings) 2auditees 2014-15 Avoided qualifications by correcting material misstatements during audit process Outcome if NOT corrected Outcome after corrections DOP 2auditees 2013-14 8

9. 2.2 Quality of submitted performance reports 1 2014-15 PFMA Annual performance reports of were reliable and useful compared to 1in the previous year With no findings With findings Improved Usefulness Reliability Stagnant or little progress Regressed 9

10. 2.2 Quality of submitted performance reports (continued)

11. 2.2 Quality of submitted performance reports (continued) 2014-15 PFMA Outcome after corrections Outcome if NOT corrected Annual performance report not materially misstated Annual performance report contained material misstatements 1 auditee 2014-15 Avoided findings by correcting material misstatements during audit process Outcome if NOT corrected Outcome after corrections 2013-14 1 auditee 11

12. 2.3 Auditees did not comply with legislation in the following areas: 2014-15 PFMA Quality of annual financial statements submitted Prevention of irregular as well as fruitless and wasteful expenditure Management of procurement and/or contracts Good Concerning Intervention required Management of strategic planning and performance Human resource management Internal audit and audit committee Improvement Stagnant or limited progress Regressed

13. 2.4 Information technology 2014-15 PFMA 2014-15 PFMA Status of the information technology focus areas Security management Good Concerning Intervention required User access management IT service continuity Improved Stagnant or little progress IT governance Regressed IT controls for the financial systems of DOP & IPID were evaluated; PSIRA was subjected to an assessment of internal controls by means of questionnaires; CSP was not subjected to an IT audit.

14. 2014-15 PFMA Expenditure incurred in contravention of key legislation IE - firearm registration system included in the AFS in prior year 3. Irregular expenditure identified for the portfolio Identified by auditees Identified by auditors 14

15. Management assurance First level of assurance Oversight assurance Second level of assurance Independent assurance Third level of assurance Senior management Senior management Accounting officer/ authority Accounting officers/ authority Executive authority Coordinating / monitoring institutions Internal audit Audit committee Oversight (portfolio committee / council) Public accounts committee National Assembly 4. Combined assurance and assessment of assurance providers4.1 Complimentary mandate Required assurance levels Required assurance levels Required assurance levels Extensive Extensive Extensive Extensive Extensive Extensive Extensive Extensive Extensive • Management’s assurance role • Senior management– take immediate action to address specific recommendations and adhere to financial management and internal control systems • Accounting officer/authority– hold officials accountable on implementation of internal controls and report progress quarterly and annually • Executive authority– monitor the progress of performance and enforce accountability and consequences • Oversight’s assurance role • National Treasury/DPSA– monitor compliance with laws and regulations and enforce appropriate action • Internal audit– follow up on management’s actions to address specific recommendations, conduct own audits on the key focus areas in the internal control environment, and report on quarterly progress • Audit committee– monitor risks andthe implementation of commitments on corrective action made by management as well as quarterly progress on the action plans • Role of independent assurance • Oversight (portfolio committee)– review and monitor quarterly progress on the implementation of action plans to address deficiencies • Public accounts committee– exercise specific oversight on a regular basis on any report which it may deem necessary • National Assembly – provide independent oversight on the reliability, accuracy and credibility of national and provincial government

16. 2014-15 PFMA First level 4.2 Assessment of assurance providers for the portfolio Improved Stagnant or little progress Second level Regressed Third level 16

17. 5. Drivers of key controls for the portfolio 2014-15 PFMA Good Concerning Intervention required Improved Stagnant or little progress Regressed

18. 2014-15 PFMA 6. Root causes and recommendations 18

19. 7. Minister’s commitments to address root causes 2014-15 PFMA

20. Questions