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AGSA SCoAG 2009

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

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AGSA SCoAG 2009

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  1. AGSA SCoAG 2009 Annual report presentation October 2009

  2. 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.

  3. Table of contents • Overview • Key highlights • Simplicity • Visibility of leadership • Strengthen human resources • Funding • Lead by Example • Conclusion

  4. 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

  5. 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

  6. 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.

  7. 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

  8. 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)

  9. Simplicity and clarity of our reports

  10. Actual performance versus target at 31 March 2009 Table 3: Summary of actual performance against targets

  11. 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.

  12. 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

  13. 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

  14. Visibility of Leadership

  15. Actual performance versus target at 31 March 2009 Table 5: Summary of actual performance against targets

  16. 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

  17. AGSA establishment profile by level

  18. AGSA establishment profile by gender

  19. 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

  20. 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

  21. Strengthen Human Resources

  22. Actual performance versus target at 31 March 2009 Table 7: Summary of actual performance against targets

  23. Funding Key achievements • Completed financial turnaround plan • Amended AGSA funding model

  24. Financial Highlights

  25. Financial Highlights • Revenue Analysis

  26. Revenue Analysis cont.

  27. Comparison of actual results with the approved budget (08’09)

  28. Comparison of actual results with the approved budget (08’09) cont.

  29. 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

  30. 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%)

  31. Analysis of other key cost driversThe other key cost drivers for 08’09 in relation to budget are as follows:

  32. Cash flow statement Analysis

  33. Debtors Ageing Analysis – 31 March 2009

  34. Ageing of trade payables

  35. Funding

  36. Actual performance versus target at 31 March 2009 Table 10: Summary of actual performance against targets

  37. 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

  38. 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)

  39. BBBEE audit work allocation Table 12: Allocation of audit work to private audit firms *Note: The reporting is based on 20% allocation only

  40. 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

  41. 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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