The South African Experience

Presented by the Office of the Auditor-General

Republic of South Africa

Coping with Challenges

National Departments and their

related entities

Provincial Departments and their

related entities (health and education

predominately delivered at this level)

Municipalities

South African Context

Mandate of the Auditor-General :

Standard setting

Determined by the Auditor-

General

In line with INTOSAI and now also

IFAC

This has involved extensive

participation in the national and

international arena eg. Auditing

statements public sector

perspectives

Setting an Auditing Framework

Technical Advancement

Audit approach aligned with

recognised practice

Development of internal technical

guidelines and support

Setting an Auditing Framework

Technical Advancement (cont)

electronic working papers

training including SAICA and ACCA

Setting an Auditing Framework

Quality Assessment

Business Unit Level

Central Quality Reviews

External Practice Review

Setting an Auditing Framework

PARLIAMENT

GENERAL REPORTS ON AUDIT OUTCOMES AT

NATIONAL, PROVINCIAL AND LOCAL ENTITIES

ACTIVITY REPORT BY AUDITOR-GENERAL

Annual audit reports, included in annual

reports of National, Provincial and Local

entities

Audit activities

AUDITS BEING CONDUCTED

AUDITORS

SUMMARY OF AUDIT OUTCOMES

ANALYSES OF AUDIT ACTIVITIES

GENERAL REPORT FLOW TO PARLIAMENT

Guidance on Audit Reporting has been issued to the staff

Agreeing on where audit findings should be disclosed e.g. Management letter, emphasis of matter

Audit reports included in the annual reports of entities

General Report on Audit Outcomes

Consistency of audit findings

Predominately under the domain of

Provincial Government

Representing 69% of the total

Provincial expenditure

Health and Education Sectors

Reporting on audit opinions on the education sector

Province Expenditure Budget (Over)/Under-spending

2001-02audit opinion

2000-01audit opinion

R million R million R million

Eastern Cape

Free State

Gauteng

KwaZulu-Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

TOTAL

7 865,6

3 173,9

7 268,5

9 270,7

6 330,7

3 330,9

1 021,8

3 972,1

4 273,2

46 507,4

8 118,9

3 382,2

7 507,0

9 346,6

6 340,9

3 346,9

1 028,4

4 029,5

4 339,2

47 439,6

253,3

208,3

238,5

75,9

10,2

16,0

6,6

57,4

66,0

932,2

Q

U

Q

Q

Q

U

Q

Q

Q

Q

U

Q

Q

Q

Q

Q

Q

U

Reporting on audit opinions on the health sector

Province Expenditure Budget (Over)/Under-spending

2001-02audit opinion

2000-01audit opinion

R million R million R million

Eastern Cape

Free State

Gauteng

KwaZulu-Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

TOTAL

4 221,4

2 039,7

6 837,6

7 033,0

2 663,5

1 456,6

517,4

1 669,0

3 581,0

30 049,2

3 892,5

1 970,5

6 771,4

6 743,7

2 718,9

1 542,3

509,0

1 734,8

3 578,8

29 461,9

(328,9)

(587,3)

Q

U

Q

Q

Q

U

Q

Q

U

Q

Q

Q

Q

Q

Q

Q

Q

U

(69,2)

(66,2)

(289,3)

55,4

85,7

(8,4)

35,8

(2,2)

Transversal Report was conducted in the

education sphere some of the primary

findings:

The proportion of personnel

expenditure to total budget was in a

number of provinces in excess of the

national norm set by the Minister

Educators were found who were

beyond retirement age which was in

contravention of the regulations

Performance Audits of a Transversal nature

Transversal Report was conducted in the

education sphere some of the primary

findings:

Although a shortage of mathematics

and physics educators were

identified. The colleges who train

educators were not factoring this into

their policies and procedures

Performance Audits of a Transversal nature

Transversal Report was conducted in the

education sphere some of the primary

findings:

The issue of loss time for educators

through absenteeism was found

throughout

42% of educators were found to be

underqualified (against national

standards)

Performance Audits of a Transversal nature

Current Initiatives

There are numerous current

initiatives to further enhance and

improve our process and products.

This includes:

Compliance

Current Initiatives

Financial management/corporate

governance

Auditing of performance management

information

Current Initiatives

Audit Focus Areas these are:

Capacity

Control environment

Procurement

Current Initiatives

Audit Focus Areas cont:

Human Resource Management

Asset Management

Delivery of Basic services

PUBLIC SECTOR

FINANCIALS

OF A

A1

A2

A3

Cabinet Portfolio “A”

Private Sector

Current Issues cont. Sectorial Reporting

Current Initiatives

Centralised audit outcomes

information

Auditing transversal audit

outcomes

Auditing of performance

management information

Challenges Faced

Lack of operating framework at

provincial level

Need for improvement in

communication channels between

national, provincial and local

government. This is in respect of

auditees as well as auditors

Challenges Faced (continued)

Overall Governance Framework is not

adequate at the entities therefore it

is difficult to audit the real issues, for

example:

service delivery

corporate governance

Challenges Faced (continued)

Often purpose of auditors is to

provide an opinion on annual financial

statements, therefore, may not see

the bigger picture

Issues may be important transversally

may not warrant disclosure in

individual audit reports

More involvement of public account

committees

Vision for the future

Sectorial reports on the delivery of

services and financial management in

key sectors such as health and

education

Indication on whether the situation is

improving or not against a pre-set

criteria

THANK YOU