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AGSA SCoAG 2009. Annual report presentation October 2009. Mission.

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agsa scoag 2009

AGSA SCoAG 2009

Annual report presentation

October 2009

mission
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.

This is our reputation promise.

table of contents
Table of contents
  • Overview
  • Key highlights
  • Simplicity
  • Visibility of leadership
  • Strengthen human resources
  • Funding
  • Lead by Example
  • Conclusion
overview of ag commitment
Overview of AG Commitment

The AGSA remains committed to the following goals in order to impact positively on all aspects of public sector accountability:

  • ensuring simplicity, clarity and relevance of the messages contained in all our reports, including the quality, timeliness and deepening of stakeholders’ understanding of our reports
  • improving the visibility of our leadership through clear communication in championing the implementation of audit recommendations
  • strengthening the human resource strategy with particular emphasis on the comprehensive trainee auditor scheme
  • focusing on the funding model with a view to stabilising our margins and cash flow situation
  • leading by example on matters of risk management, internal controls and transformation
key highlights
Key Highlights
  • Communication of audit report outcomes to key stakeholder through road shows
  • Annual quality results of category “excellent” exceeded and surpassed that of prior years
  • 50% improvement in the timely submission of annual financial statements for PFMA organisations
  • 36% improvement in the timely submission of annual financial statements for MFMA municipalities
  • Completion of audit reports within the statutory deadlines
    • PFMA organisations (99%)
    • Other PFMA organisations (98%)
    • MFMA organisations (92%)
  • Significant decrease in vacancies of 35% from 2007 (724) to 2009 (471)
  • Achievement of retention rate of 11% compared to industry average of 16%
  • AGSA hosted the AFROSAI 11th General Assembly in Pretoria from 13 to 17 October 2008. It was attended by delegates and observers from 51 countries
simplicity and clarity of our reports
Simplicity and clarity of our reports

Key Achievements

  • Continued our efforts to influence the achievement of unqualified reports in all spheres of government, which is central to the realisation of our constitutional mandate
  • Communicated with simplicity, clarity and relevance to our stakeholders through road shows and door-to-door visits
  • Continued focus on the quality and timeliness of our products including audit reports
  • Streamlined performance auditing function
  • Continued our contribution in international auditing to the United Nations Board of Auditors
  • Tabled to Parliament 38 performance audits reports, 6 of national departments, 2 of public entities, 30 provincial departments.
figure 1 annual quality control results
Figure 1: Annual quality control results

Quality results summary

  • Overall Commentary:
  • Results of category “excellent” exceeded results of prior years
  • Results of category “poor” show improvement compared to prior years
slide8

PFMA and MFMA timeliness results

Table 1: The AGSA’s PFMA performance in meeting legislated reporting timelines (Results as at 31 July 2008)

Table 2: The AGSA’s MFMA performance in meeting legislated reporting timelines (Results as at 31 November 2008)

actual performance versus target at 31 march 2009
Actual performance versus target at 31 March 2009

Table 3: Summary of actual performance against targets

visibility of leadership
Visibility of Leadership

Key achievements

  • Engaged the media on the audit process so that they can appropriately communicate audit outcomes
  • Reviewed our vision, mission and values so as to drive a performance-driven culture
  • Trained and empowered our leadership to better understand their leadership communication role
  • Signed a Memorandum of Understanding (MoU) with the Public Protector and the Office of the Public Service Commission.
  • Auditor-General was appointed as the first vice-chair of INTOSAI and continued as President of AFROSAI
  • AFROSAI held its 11th General Assembly in Pretoria, South Africa from 13 to 17 October 2008. The assembly was hosted by the AGSA and was attended by delegates and observers from 51 countries.
pfma audit outcomes source ag presentation to parliament on 18 november 2008
PFMA audit outcomes (Source: AG presentation to Parliament on 18 November 2008)

Figure 2: PFMA audit outcomes

  • Overall Commentary:
  • Total number of Auditees increased from 361 in 2006-07 to 463 in 2007-08
  • There has been 4% increase on disclaimers, 61% increase on adverse qualification , 80% increase on qualified and 24% improvement on financially unqualified with other matters and 65% without other matters
  • Note:
  • Includes following:
  • National departments (34)
  • National Public Entities (195)
  • Constitutional Institutions (9)
  • Provincial departments (119)
  • Provincial Public Entities (106)
  • Total = 463
mfma audit outcomes as per general report on source general report 2007 2008
MFMA audit outcomes as per general report on *(Source: General Report 2007-2008

Overall Commentary:

  • Out of 239 municipalities whose audit outcomes are reported for 2007-08 , 74 entities improved and 22 regressed while the audit outcomes of 143 remain unchanged
  • There is a 13% reduction on disclaimers, 53% reduction on adverse qualification, 20% reduction on qualified and 73% improvement on unqualified with other matters

Figure 2: MFMA audit outcomes

Note:

This excludes municipal entities and metros

actual performance versus target at 31 march 20091
Actual performance versus target at 31 March 2009

Table 5: Summary of actual performance against targets

strengthen human resources
Strengthen Human Resources

Key Achievements

  • Entered into a temporary arrangement of management secondments to address vacancies, skills transfer and minimising reliance on contract work
  • Improved retention of staff i.e. 11% against an industry average of 16%
  • Reviewed our Human capital policies and procedures
  • Reviewed our performance management system so as to enable personal accountability
  • Repositioned the TA Scheme to ensure optimal ROI and introduced an audit clerk and audit supervisor positions for those trainees that are temporarily not studying
  • 105 AGSA staff members received RGA qualification (65 qualified in 2007-08)
  • 30 passed SAICA and 30 passed IRBA examinations
  • Overall 35% decrease of vacancies from 2007 to 2009
slide19

Overall AGSA vacancy stats

Figure 4 : Overall vacancy per band

  • Overall commentary:
  • There has been a decrease in vacancy from 2007 to 2009 by
    • 31% at Band D
    • 17% at Band E and
    • 43% at Band G
  • Overall decrease of 35% in vacancies from total of 724 in 2007 to 471 in 2009
  • Highest vacancies at the middle management and trainee auditor levels
trainee auditors by qualifications and year of study
Trainee auditors by qualifications and year of study

Figure 4: Trainee auditors by qualifications and year of study

  • Overall commentary:
  • Critical shortage of CTAs
  • Low pass rates
actual performance versus target at 31 march 20092
Actual performance versus target at 31 March 2009

Table 7: Summary of actual performance against targets

funding
Funding

Key achievements

  • Completed financial turnaround plan
  • Amended AGSA funding model
financial highlights1
Financial Highlights
  • Revenue Analysis
sources of revenue
Sources of revenue

Figure 8: Sources of revenue (R’000)

  • Overall Commentary:
  • Average tariff for 2008 was R313/hour and it increased to R347/hour in 2009
  • Contract work as a % of total revenue was 38% for 2008 and 40% for 2009
slide30

Financial HighlightsTotal cost is R1.446 billion. The major cost drivers for AGSA are Contract work - R551.621 million (38%), Recoverable staff cost – R464.644 million (32%) and Support staff cost – R198.998 million (14%)

slide31
Analysis of other key cost driversThe other key cost drivers for 08’09 in relation to budget are as follows:
actual performance versus target at 31 march 20093
Actual performance versus target at 31 March 2009

Table 10: Summary of actual performance against targets

lead by example
Lead by Example

Key achievements

  • Developed AGSA BBBEE strategy
  • Achieved Employment Equity set target: 80% on targeted group and 20% on non-targeted group
  • Crafted the organisational wide risk management framework to cover strategic, financial and operational risks that are monitored by EXCO on a regular basis
  • Revamped ICT, HC and Finance processes
agsa bbbee and affirmative action profile
AGSA BBBEE and Affirmative action profile

Figure 9: Achievement of affirmative action targets excluding trainee auditors (levels A to G)

  • Overall Commentary:
  • African: Increased from 55% to 60% (08 to 09)
  • Colored: Decreased from 7% to 5% (08 to 09)
  • Indian: Remained same at 9%
  • White: Decreased from 28% to 25% ( 08 to 09)
  • Disabled: Remained same at 1%

Figure 10: Achievement of affirmative action targets excluding of trainee auditors (levels A to F)

  • Overall Commentary:
  • African: Increased from 38% to 39% (08 to 09)
  • Coloured: Increased from 7% to 8% (08 to 09)
  • Indian: Increased from 10% to 12% (08 to 09)
  • White: Decreased from 44% to 38% (08 to 09)
bbbee audit work allocation
BBBEE audit work allocation

Table 12: Allocation of audit work to private audit firms

*Note: The reporting is based on 20% allocation only

actual performance versus target at 31 march 20094
Actual performance versus target at 31 March 2009

Table 13: Summary of actual performance against argets

Note *: Absence of documented and standardised processes

Note **: Although processes are standardised they are either not documented or not communicated

Note ***: Processes are documented, standardised and communicated

conclusions
Conclusions
  • Submission of timely performance reports addressed with auditees, with National & Provincial Treasuries
  • AGSA Financial sustainability addressed through the implementation of the revised Funding model in 2009
  • AGSA Risks closely monitored
  • Leadership visibility being improved
  • More focus on the recruitment and retention of Trainee Auditors to address skills shortage
  • Substantial development & growth of key processes
  • BBBEE closely monitored
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