Ad Hoc Committee on Service Delivery 2 February 2010 Results of audits of performance information

1. 1 Ad Hoc Committee on Service Delivery2 February 2010 Results of audits of performance information Paul Serote, Corporate Executive Chairperson and honourable members, Thank you for the opportunity to share with you a number of key audit outcome perspectives based on the our audits completed within all three spheres of government. I will provide information from a financial audit perspective as well as from the perspective of our auditing of performance information. Both these types of audits are aimed at providing comfort that the information disclosed in the annual report is fairly reflected and enables proper oversight from both a financial as well as a non-financial perspective. Audit reports provide valuable insights into the manner into which public resources are managed and the impact that this has on service delivery. Chairperson and honourable members, Thank you for the opportunity to share with you a number of key audit outcome perspectives based on the our audits completed within all three spheres of government. I will provide information from a financial audit perspective as well as from the perspective of our auditing of performance information. Both these types of audits are aimed at providing comfort that the information disclosed in the annual report is fairly reflected and enables proper oversight from both a financial as well as a non-financial perspective. Audit reports provide valuable insights into the manner into which public resources are managed and the impact that this has on service delivery.

2. 2 Reputation promise/mission The Auditor-General 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. 3 The objective of an audit of performance information is to enable the auditor to conclude whether the reported performance against predetermined objectives are reliable, accurate and complete, in all material respects, based on pre-determined criteria. Non-compliance with regulatory requirements � the scope of audit work and audit findings relate to compliance with the PFMA and Treasury regulations pertaining to the planning, management, monitoring, review and reporting of performance information. Usefulness of reported information � the audit work focusus on the consistency, relevance and measurability of planned and reported performance information. Reliability of reported performance information � the audit work focuses on whether the reported performance information could be traced back to the source data or documentation and whether the reported information is accurate and complete in relation to the source data, evidence or documentation. The objective of an audit of performance information is to enable the auditor to conclude whether the reported performance against predetermined objectives are reliable, accurate and complete, in all material respects, based on pre-determined criteria. Non-compliance with regulatory requirements � the scope of audit work and audit findings relate to compliance with the PFMA and Treasury regulations pertaining to the planning, management, monitoring, review and reporting of performance information. Usefulness of reported information � the audit work focusus on the consistency, relevance and measurability of planned and reported performance information. Reliability of reported performance information � the audit work focuses on whether the reported performance information could be traced back to the source data or documentation and whether the reported information is accurate and complete in relation to the source data, evidence or documentation.

4. 4 The overall incidences of key findings resulting from the audit of performance information in respect of the national sphere of government is concerned are summarised in this slide (Go through slide�.)The overall incidences of key findings resulting from the audit of performance information in respect of the national sphere of government is concerned are summarised in this slide (Go through slide�.)

5. 5 The key findings resulting from the audit of performance information in the provincial sphere indicates that there is a high percentage on non-compliance than in the case of national, as well as a higher percentage of unreliable performance information. (Go through slide�.) The key findings resulting from the audit of performance information in the provincial sphere indicates that there is a high percentage on non-compliance than in the case of national, as well as a higher percentage of unreliable performance information. (Go through slide�.)

6. 6 The key common findings in respect of municipalities related to the following: � No reporting of performance information (42%) � Lack of internal auditing of performance measurement (41%) � Inadequate content of the Integrated Development Plan (32%) � Performance information was not received on time for audit purposes (30%). It is important that the internal control system of municipalities cover the process of reporting of performance information in order to address these issues. Further, internal audit plans must cater for internal review of performance measurement and audit committees should exercise oversight on the effective functioning of the control system relating to performance information.The key common findings in respect of municipalities related to the following: � No reporting of performance information (42%) � Lack of internal auditing of performance measurement (41%) � Inadequate content of the Integrated Development Plan (32%) � Performance information was not received on time for audit purposes (30%). It is important that the internal control system of municipalities cover the process of reporting of performance information in order to address these issues. Further, internal audit plans must cater for internal review of performance measurement and audit committees should exercise oversight on the effective functioning of the control system relating to performance information.

7. 7 Way forward National Treasury guideline on performance information Leadership awareness of the importance of performance information (e.g. accounting officers; executive authorities; oversight structures) Implementation partners regarding performance information (e.g. DPSA, NT) Role of internal audit, audit committees, councillors, etc AoPI audit opinions from AGSA in 2012

8. 8 Thank you