8 October 2013

1. 8 October 2013 Department of Agriculture, Forestry and Fisheries (DAFF)Briefing to the Portfolio Committee on the 2012/13 audit outcomes

2. 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.

3. Purpose of meeting To brief the Portfolio Committee on 2012-13 audit outcomes of the department.

4. Agenda Audit outcomes 2012-13 Audit of predetermined objectives Root causes Clean administration Pyramid of accountability Conclusion and way forward

5. Audit outcomes 2012-13

6. Audit outcomes 2012-13

7. Key control assessment DAFF

8. Key control assessment OBP NAMC

9. Key control assessment ARC NCERA

10. Key control assessment MLRF PPECB

11. Key focus areas Human Resource Management includes the audit of consultants

12. Key focus areas Human Resource Management includes the audit of consultants

13. Commitments – Department only

14. Commitments – Department only Status of implementation of commitments

15. Audit of predetermined objectives

16. Audit of predetermined objectives 2011-12 Audit outcomes Compliance with regulatory requirements Usefulness Reliability E x i s t e n c e T i M e l i n e s s € P r e s e n t a t i o n C o n s i s t e n c y M e a s u r a b i l i t y R e l e v a n c e V a l i d i t y A c c u r a c y C o m p l e t e n e s s Additional matter paragraphs included in the audit report: >20% of targets not achieved due to indicators and targets not being suitable developed during the strategic planning process and material adjustments were made to the annual performance report submitted for audit. No matters reported Reported in audit report

17. Audit of predetermined objectives Usefulness of 2012-13 annual performance report s Performance information must be presented using the National Treasury Annual reporting guidelines. Reasons for major variances between planned and actual performance must be explained and should be supported by corroborating evidence. Requirement Presentation Conclusion • 39% of reasons for variances not reported; and • 24% of reasons for variances not supported by supporting documentation. Objectives, indicators and targets must be consistent between planning and reporting documents. Requirement Consistency Conclusion No material findings reported. Indicators should be well-defined and verifiable. Targets should be specific, measurable and time-bound. Requirement Measurability Conclusion No material findings reported. The indicators relate logically and directly to an aspect of the institution’s mandate, and the realisation of strategic goals and objectives. Requirement Relevance Conclusion No material findings reported.

18. Audit of predetermined objectives Reliability of 2012-13 annual performance report Qualified opinions (error rate >20%) reported in the Management Report.

19. Audit of predetermined objectives Reliability of 2012-13 annual performance report Disclaimer of opinion (error rate >50%) reported in the Management Report.

20. Audit of predetermined objectives Key issues on the DAFF’s budget Intervention required in order to enhance service delivery.

21. Root causes

22. Root causes and focus to achieve clean administration Management did not exercise sufficient oversight over reporting and internal controls. Although action plans were implemented, limited or no progress was made to address root causes, with the result that repeat findings were raised. (AoPO; compliance) Management did not ensure that key functions (internal audit, regional offices and various senior manager positions) within the department are properly skilled and resourced. Monthly and quarterly financial (disclosure notes) and performance reports are not accurate and complete. No risk assessment conducted in terms of Treasury Regulations 3.2.1 and no risk management strategy which includes the fraud prevention plan. Critical components within finance, performance information and compliance were not covered by the internal audit function due to inadequate resources and skills (insufficient positions and ineffective leadership). Insufficient oversight Lack of skill and resources Lack of regular, accurate and complete reports No risk assessment conducted Internal audit ineffective ROOT CAUSES

23. Clean administration

24. Clean administration

25. Pyramid of accountability

26. Pyramid of accountability Accountable and transparent government Flow of credible information Re-enforcing accountability at all levels, escalation and robust communication

27. Conclusion and way forward

28. Conclusion and way forward

29. Thank You