department of agriculture, forestry and fisheries (daff) briefing to the portfolio committee on the...
TRANSCRIPT
Department of Agriculture, Forestry and Fisheries (DAFF)
Briefing to the Portfolio Committee on the 2012/13 audit outcomes
8 October 2013
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.
To brief the Portfolio Committee on 2012-13 audit outcomes of the department.
Purpose of meeting
1. Audit outcomes 2012-13
2. Audit of predetermined objectives
3. Root causes
4. Clean administration
5. Pyramid of accountability
6. Conclusion and way forward
Agenda
Audit outcomes 2012-13
Audit outcomes 2012-13
Financially unqualified with no findings
Qualified, with findings
Financially unqualified with findings
Adverse, disclaimer, with findings
Status improved from previous year (no material findings).
Same status as previous year (with material findings).
Same status as previous year (no material findings).
Situation has deteriorated from prior year.
Key control assessment
DAFF
Key control assessment
OBP
NAMC
Key control assessment
ARC
NCERA
Key control assessment
MLRF
PPECB
Key focus areas
Human Resource Management includes the audit of consultants
DAFF Portfolio Movement
Auditee
DAFF
OBP
NAMC
ARC
Assessment of key focus areas
IT controlsSome
improvement
PredeterminedObjectives
Noimprovement
Material errors in AFS submitted for
auditNo improvement
Supply ChainManagement
Someimprovement
HR ManagementNo matters
Material errors in AFS submitted for
auditSome improvement
Predetermined Objectives
Someimprovement
IT controlsSome
improvement
Predetermined ObjectivesNo matters
HRManagementNo matters
Material errors in AFS submitted for
auditNo matters
IT controlsNo
improvement
Predetermined ObjectivesNo matters
Supply Chain Management
No improvement
HRManagement
No improvement
Material errors in AFS submitted for
auditNo improvement
Intervention reequired Cause for concern No intervention required Improvement Unchanged Regression
Supply ChainManagement
Someimprovement
HR Management
Someimprovement
Supply Chain ManagementRegressed
IT controlsNo matters
Key focus areas
Human Resource Management includes the audit of consultants
DAFF Portfolio Movement
Auditee
PPECB
NCERA Farm
MLRF
Assessment of key focus areas
Supply ChainManagementNo matters
Predetermined ObjectivesNo matters
HRManagementNo matters
IT controlsNo matters
Material errors in AFS submitted for
auditNo matters
Predetermined ObjectivesRegressed
Supply ChainManagementNo matters
HRManagementNo matters
IT controlsNo matters
Material errors in AFS submitted for
auditNo matters
IT controlsNo
improvement
Material errors in AFS submitted for
auditNo matters
Supply ChainManagementNo matters
IT controlsNo matters
Supply Chain Management
No improvement
IT controlsNo matters
Supply Chain Management
No improvement
IT controlsNo
improvement
Supply Chain ManagementRegressed
Intervention reequired Cause for concern No intervention required Improvement Unchanged Regression
Predetermined Objectives
Improvement
HR ManagementReported in
DAFF
Commitments – Department only
Commitments – Department only
No Commitment Status1. The HR plan for 2012/13 to be developed in accordance with enhanced
policies and procedures.Complete.
2. Ensure monthly reporting that is complete and accurate for financial (including disclosure notes) and performance information.
Not addressed.
3. Perform annual risk assessment to ensure an adequate and valued audit programme for the department.
Not addressed.(Although the risk assessment was presented at a special audit committee on 18 March 2013, the risk assessment was not effective during the 2012/13 financial year.)
4. Capacitate the internal audit function to be fully effective and functional. Not addressed.
5. Align performance agreements of senior management with the department’s goals.
In progress.
6. Revise the staff establishment specially to ensure there is sufficient staff to carry out the monitoring and evaluation function (AoPO).
In progress.
7. Manage deviation from the procurement process in a transparent manner. In progress.
Status of implementation of commitments
Audit of predetermined objectives
Audit of predetermined objectives
2011-12 Audit outcomes
Compliancewith regulatoryrequirements
Usefulness Reliability
Existence
TiMeliness€
Presentation
Consistency
Measurability
Relevance
Accuracy
Completeness
Validity
Additional matter paragraphs included in the audit report: >20% of targets not achieved due to indicators and targets not being suitable developed during the strategic planning process and material adjustments were
made to the annual performance report submitted for audit.
No matters reported Reported in audit report
s
Performance information must be presented using the National Treasury Annual reporting guidelines. Reasons for major variances between planned and actual performance must be explained and should be supported by corroborating evidence.•39% of reasons for variances not reported; and•24% of reasons for variances not supported by supporting documentation.
Objectives, indicators and targets must be consistent between planning and reporting documents.
No material findings reported.
Indicators should be well-defined and verifiable. Targets should be specific, measurable and time-bound.
No material findings reported.
The indicators relate logically and directly to an aspect of the institution’s mandate, and the realisation of strategic goals and objectives.
No material findings reported.
Requirement
Requirement
Requirement
Requirement
Conclusion
Conclusion
Conclusion
Conclusion
Presentation
Consistency
Measurability
Relevance
Usefulness of 2012-13 annual performance report
Audit of predetermined objectives
Audit of predetermined objectives
Reliability of 2012-13 annual performance report
Qualified opinions (error rate >20%) reported in the Management Report.
Audit of predetermined objectives
Reliability of 2012-13 annual performance report
Disclaimer of opinion (error rate >50%) reported in the Management Report.
Audit of predetermined objectives
Key issues on the DAFF’s budget
Intervention required in order to enhance service delivery.
Root causes
Root causes and focus to achieve clean administration
Management did not exercise
sufficient oversight over reporting and internal controls.Although action
plans were implemented, limited or no progress was
made to address root causes, with
the result that repeat findings
were raised.(AoPO;
compliance)
Monthly and quarterly financial (disclosure notes) and performance reports are not accurate and
complete.
Management did not ensure that key functions (internal audit, regional offices
and various senior manager
positions) within the department
are properly skilled and resourced.
No risk assessment conducted in
terms of Treasury Regulations 3.2.1
and no risk management strategy which
includes the fraud prevention plan.
Critical components within
finance, performance
information and compliance were
not covered by the internal audit
function due to inadequate
resources and skills (insufficient
positions and ineffective
leadership).
Insufficient oversight
Lack of regular,
accurate and complete reports
Lack of skill and
resources
No risk assessment conducted
Internal audit ineffective
ROOT CAUSES
Clean administration
Clean administration
Pyramid of accountability
Pyramid of accountability
Flow
of c
redi
ble
info
rmat
ion
Accountable and transparent government
Re-enforcing accountability at all levels, escalation and robust com
munication
Conclusion and way forward
Conclusion and way forward
Thank You