18 March 2015

1. Briefing to the Portfolio Committee on Department of Mineral Resources (DMR) APP 2015/16Presenter : Margaret Seoka – Senior Manager AGSA 18 March 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, 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. Oversight model OVERSIGHT: Parliament, provincial legislature or municipal council • Identify desired impacts Assess and adjust Specify performance indicators Monitor and take Set targets corrective action and allocate resources Policy development Strategic Planning Operational planning and budgeting Accountability INSTITUTION National department Provincial department Municipality Public entity Municipal entity End-year reporting Implementation and in-year reporting

4. Oversight component - Portfolio committee mandate Role of Portfolio Committees (Rule 201)

5. Considerations for Portfolio Committees when dealing with performance monitoring Portfolio Committee should track any changes to the APP

6. Support oversight – complimentary mandate Management assurance First level of assurance Oversight assurance Second level of assurance Independent assurance Third level of assurance Senior management Senior management Accounting officers/ authority Accounting officers/ authority Executive authority Coordinating / Monitoring institutions Internal audit Audit committee Oversight (portfolio committees / councils) Public accounts committee National Assembly 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 officers/ 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 and 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 committees)– 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

7. Understanding and monitoring of the accounting officer’s mandate are key to improving internal control environment Role of accounting officer Robust financial and performance management systems Oversight and accountability Commitment and ethical behaviour • Effective, efficient and transparent systems for • financial and risk management • internal controls (under control of audit committee) • procurement and evaluation • Effective, efficient, economical and transparent use of resources • Prevention of unauthorised, irregular and fruitless and wasteful expenditure and, if discovered, reporting to treasury • Efficient and economic management of available working capital • Manage and safeguard assets and liabilities • Take appropriate disciplinary steps against any official contravening the PFMA Therole of the accounting officer is critical to ensure: timely, credible information+accountability+transparency+service delivery Chapter 5 of the Public Finance Management Act, 1999

8. AGSA’S aspirations for the Public Service • Transparent and stable reporting systems • Budgeting and planning processes • Focussed information management platforms • Strong internal audit capabilities Creating a better and dignified life for the citizens of South Africa through timelyeffective, efficient and economicalSERVICE DELIVERY • Reporting to enable effective oversight • Applying consequences for transgressions and poor performance Professionalism • Visible commitment by all players in the public service • Demonstrated impeccable ethical behaviour and professionalism • Independent and relevant reporting by the AG • Value-adding input expressed by the AG

9. AGSA Review of DMR 2015/16 APP

10. AGSA Review of DMR 2015/16 APP

11. AGSA Review of DMR 2015/16 APP

12. AGSA Review of DMR 2015/16 APP - SCOPE

13. Audit findings 2015/16 APP

14. Audit findings history AUDIT OPINION INDEX

15. Reviewof DMR 2015/16 Budget

16. DMR Appropriation by economic classification

17. Irregular expenditure(IE) as a percentage of total expenditure

18. Implementation of the action plan by the DMR Implementation of the action plan- AGSA findings

19. Audit progress The audit of the 2015/16 APP has been completed and there were no significant issues identified. The planning for the 2014/15 financial year has been completed and the execution of the audit is currently in progress. There are no significant issues identified to date

20. Questions?