SA realities:

1
Audit Committees in SA

• SA realities
• Cash utilisation was the key measure of
  performance
• Focus on inputs and not on results
• Fragmented and unclear accountabilities and legal
  frameworks
• Poor quality and late information
• Poor compliance with existing legislation
• Weak financial management
• Wastefulness inefficiency, fraud theft
• In summary, Poor Accountability
• Public sector reform required

2
Desired Outcomes Long Term

• Transparent budgeting process
• Sound financial management systems and processes
• Effective management of revenue, expenditure,
  assets and liabilities
• Reliable and useful reporting on performance,
  annual reports and annual financial statements
• Unqualified consolidated financial statements,
  reconcilable to GFS requirements
• Improved accountability of departments, other
  government agencies and public entities

3
Accountability Framework
How much? Quality? When? Cost?
Programs
Performance Agreements
Accountable for what is controlled
4
Executive Authorities

• Determine policy and budgets
• Performance targets/contract with
  Director-General (Accounting Officer) and
  Accounting Authority of public entities (normally
  the Board)
• Monitor implementation
• Consider monthly reports on budget
• Regular reporting to cabinet/ executive council
• Monitor public entities
• Table annual report audit report within 6 months

5
Obligations on Accounting Officers

• Deliver contracted outputs
• Ensure expenditure in line with the purpose as
  voted
• Appropriate steps to prevent unauthorized,
  irregular and wasteful expenditure
• General fiduciary responsibilities, including
  risk management, internal controls, internal
  audit audit committees
• Enforce disciplinary measures
• Monthly in-year reporting in terms of PFMA and
  Division of Revenue Act (conditional grants)
• Annual Report, including Annual Financial
  Statements

6
Managing Performance

• Accounting Officer must report regularly to
  Minister on the following
• Results of evaluations done in terms of
  efficiency, economy and effectiveness
• Progress in relation to new programmes, projects
  or outputs that were proposed in strategic plans
  and
• Any matters relating to the departments
  strategies, outputs and outcomes which Accounting
  Officer considers necessary to advise minister

7
Internal Audit

• Accounting Officer must establish and maintain a
  system of internal audit under direction of an
  audit committee
• Audit committee at least 3 persons
• One from outside public service
• Majority not employed by department, unless
  approved
• Chairperson may not be in employ of department
• Internal audit function and audit committee may
  be established for two or more departments if
  treasury considers appropriate

8
Audit Committee Impact

• High profile individuals attracted
• Introduced risk awareness in departments
• Called for risk responsive audit plans
• Called for well-qualified HIA
• Assisted in getting units resourced
• Assured independence
• Improved credibility of Accounting Officers