Post on 24-Sep-2020
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Budgetary review and recommendations report Department of Basic Education
03 October 2017
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Reputation promise
The Auditor-General of South Africa (AGSA) has a constitutional mandate and, as the supreme audit institution (SAI) of South Africa, exists to strengthen our country’s democracy by enabling oversight, accountability and governance in the public sector through auditing, thereby building public confidence.
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Role of the AGSA in the reporting process
Our role as the AGSA is to reflect on the audit work performed to assist the portfolio committee in its oversight role of assessing the performance of the entities taking into consideration the objective of the committee to produce a Budgetary review and recommendations report (BRRR).
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ANNUAL PERFORMANCE PLAN (APP)
TARGETS PER APP
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“Plan-Do-Check-Act Cycle”, also the Deming cycle , courtesy of the International Organization for Standardization
AGSA theme for the current year to improve outcomes
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DO
PLAN
CHECK ACT
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The AGSA’s Public Audit Act Promise and Focus
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Our annual audits examine three areas
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The AGSA expresses the following different audit opinions:
Unqualified
opinion with no
findings
(clean audit)
Financially
unqualified
opinion with
findings
Auditee:
• Credible and reliable
financial statements
that are free of
material
misstatements
• Useful and reliable
performance as
measured against
predetermined
objectives
• complied with key
legislation
Auditee:
• Credible and reliable
financial statements
that are free of material
misstatements
• Did not produce useful
and reliable
performance as
measured against
predetermined
objectives Did not
complied with key
legislation
Qualified
opinion
Auditee:
• had material
misstatements on
specific areas in their
financial statements,
which could not be
corrected before the
financial statements
were published.
Adverse
opinion
Auditee:
• had the same
challenges as those with
qualified opinions but, in
addition, they had so
many material
misstatements in their
financial statements that
we disagreed with
almost all the amounts
and disclosures in the
financial statements
Auditee:
• had the same
challenges as those
with qualified opinions
but, in addition, they
could not provide us
with evidence for most
of the amounts and
disclosures reported in
the financial
statements, and we
were unable to
conclude or express
an opinion on the
credibility of their
financial statements
Disclaimed
opinion
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The 2016-17 audit outcomes and key messages
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To improve/maintain the overall audit outcomes, financial statements processes,
1 3 …. compliance with key legislation and….
2
Three year trend – Overall change in audit outcomes
…. performance planning and reporting must be improved by….
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Change in audit outcomes over 3 years
The portfolio’s overall outcomes remained unchanged from the
prior year with all entities achieving unqualified audit outcomes
with findings. The outcomes can be improved by:
• Implement monthly disciplines of record keeping, reconciling
and reviewing transactions to ensure the credibility and
completeness of monthly financial and performance
information.
• Enhance the skills and resources in the infrastructure and
internal audit units to address capacity challenges (DBE).
• Monitoring of progress in implementing the action plans on
an ongoing basis to ensure that milestones set and
deliverables are achieved.
Non-compliance by the DBE and its entities are an
indication of deficiencies in monitoring compliance with
legislative requirements in the areas of financial
management and SCM. Monthly and quarterly
management reviews were also not adequate at the DBE
and SACE to ensure credible reporting. At the DBE, the
controls can be strengthened by monitoring and enforcing
compliance with procurement processes, when appointing
implementing agents and ensuring that the procurement
processes followed by implementing agents are aligned to
the department’s SCM policies.
An annual performance report (APR) submitted for auditing contained
material misstatements, this was due to inadequate management reviews
when performance information was reported quarterly and in the annual
report. The performance planning and reporting can be improved by:
• Reconciling the reported performance results to verifiable evidence
and against the technical indicator descriptions.
• Implementing proper record keeping in a timely manner to ensure
complete, relevant and accurate information.
• Developing and monitoring of action plans to address control
deficiencies identified relating to the planning, credibility and
completeness of the performance reported.
Three year trend –
Compliance with key legislation
(DBE, SACE,
UMALUSI)
(DBE, SACE,
UMALUSI)
(DBE, SACE,
UMALUSI)
2016-17 2015-16 2014-15
Three-year trend –
Quality of annual
performance plans
Three year trend –
Quality of submitted
annual performance reports
(SACE
UMALUSI)
(DBE,
UMALUSI)
(DBE,
SACE)
(DBE)
(SACE)
(UMALUSI)
2016-17 2015-16 2014-15
(DBE, SACE
, UMALUSI))
(DBE) (DBE, SACE
)
(UMALUSI, SACE
)
(UMALUSI)
2016-17 2015-16 2014-15
With no material findings
With material findings
Outstanding audits
No APR/ late submitted
Unqualified
with
no findings
Unqualified
with findings
Qualified
with findings
Adverse
with findings
Disclaimed
with finding
Audits
outstanding
----------------------------------------------------
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(DBE, SACE,UMALUSI)
(DBE, SACE
, UMALUSI)
(DBE, SACE
, UMALUSI)
2016-17 2015-16 2014-15
Status of Key controls
Good Concerning Intervention required 4
… providing attention to the key controls by…
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Change in audit outcomes over 3 years - continued
The overall stagnation in key controls was mainly due to the fact that action plans to
address deficiencies reported are developed but there is inadequate monitoring of the
implementation of these which results in the recurring audit findings. There was lack of
consequence management as similar deficiencies relating to unsatisfactory performance
and transgressions were identified.. Interventions are still required in order to improve the
current status of key controls relating to:
• Daily financial management and performance management disciplines.
• Coordination between the various departments within the education sector and principal
actors and oversight of deliverables by implementing agents must be prioritised to
ensure credible financial, performance and compliance reporting.
• Monitoring and evaluation processes – The monitoring and evaluation of all information
received internally and externally must be thoroughly reviewed, monitored and
evaluated to ensure it is credible and reliable. Internal audit can be used to give
assurance on credible information.
Fir
st
leve
l
… the key role players as part of their role in combined assurance
Assurance providers per level
SACE, UMALUS
I
UMALUSI
DBE
SACE, DBE
All
All Senior
management
Accounting officer/authorit
y
Executive authority
Internal audit unit
Audit committee
Portfolio committee
Th
ird
leve
l
Sec
on
d
leve
l
DBE
Despite senior management being constantly informed on the importance of proper
record keeping; it was still a challenge to obtain information relating to infrastructure
and performance reporting at DBE. The Director-General provided some assurance
mainly because he had adequate insight into the risks and internal control deficiencies;
however, the accounting officer did not ensure that action plans were implemented
adequately to ensure daily/weekly/monthly disciplines and reconciliations that will
ensure accurate and complete financial statements and performance reports, and
compliance. The Minister was assessed as providing some assurance as there are
number of recurring findings from the prior financial years. The audit committee
operated effectively and executed their responsibilities as required during the year,
however their effectiveness and ability to influence an improved audit outcome was
negatively impacted by internal audit not functioning as intended.
SACE and Umalusi
Senior management provided some assurance due to material corrections that was
required on annual performance report and financial statements submitted.
-------------------------------------------------
----------------------------------------------
Provides assuranc
e
Provides some
assurance
Provides limited/
no assurance Vacancy
Not establishe
d
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2016-17 PFMA Improved Stagnant Regressed 12
DB
E
Um
alu
si
SA
CE
- Audit committee
- Proper record keeping
- Daily and monthly controls
- Regular, accurate & complete finanial and
- Review and monitor compliance
- Design and Implement IT controls
GOVERNANCE
- Audit Action plans
- ICT governance
- Risk management
- Internal Audit
FINANCIAL AND
PERFORMANCE MANAGEMENT
- Oversight responsibility
- Effective HR management
- Policies and procedures
LEADERSHIP
- Effective leadership
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Performance management linked to programmes/ objectives tested & key projects audited
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Management and delivery on key programmes – spending, performance and reporting (DBE)
Programme Budget
spent
Materia
l
misstat
ements
Unauthoris
ed,
irregular
and
fruitless
and
wasteful
Findings on material indicators Achieveme
nt of
targets –
from
performan
ce report Indicator
Not
useful
Not
reliable Adjusted
CURRICULUM
POLICY,
SUPPORT AND
MONITORING
97.27% Yes
Kha Ri Gude:
IE – R58
million
FEW – R 11
million
Number of learners
enrolling for the Kha Ri
Gude Literacy Campaign
in 2016/17
X
11 out of 14
targets
PLANNING ,
INFORMATION
AND
ASSESSMENT
93.05% Yes IE – R303
million
4.3.1 Number of new
schools built and
completed through ASIDI³
4.3.2 Number of schools
provided with sanitation
facilities through ASIDI
X
X
5 out of 13
targets
Good Of concern Intervention required
UE – Unauthorised expenditure IE – Irregular expenditure FWE – Fruitless and wasteful
expenditure
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Management and delivery on key programmes – spending, performance and reporting (DBE) (continued …)
Programme Budget
spent
Material
misstat
ements
Unauthorise
d, irregular
and fruitless
and wasteful
Findings on material indicators Achievement
of targets –
from
performance
report Indicator
Not
useful
Not
reliable
Adjust
ed
PLANNING ,
INFORMATION
AND
ASSESSMENT
(Cont…)
93.05%
Yes
4.3.3 Number of schools
provided with water
through ASIDI
4.3.4 Number of schools
provided with electricity
through ASIDI
X
X
5 out of 13
targets
Yes No
4.4.2 Percentage of
learners from public
schools that are
successfully uploaded
onto LURITS
X
Good Of concern Intervention required
UE – Unauthorised expenditure IE – Irregular expenditure FWE – Fruitless and wasteful
expenditure
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Management and delivery on key programmes – spending, performance and reporting (DBE) (continued …)
Programme
Budge
t
spent
Material
misstat
ements
Unauthorise
d, irregular
and fruitless
and wasteful
Findings on material indicators Achievement
of targets –
from
performance
report Indicator
Not
useful
Not
reliable
Adjust
ed
Educational
Enrichment
Services
99.86
% No FWE -
No findings on material
indicators reported.
1 out of 3
targets
Good Of concern Intervention required
UE – Unauthorised expenditure IE – Irregular expenditure FWE – Fruitless and wasteful
expenditure
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Key projects selected for audit
2016-17 PFMA No material
findings reported
Material
findings reported
• No progress had been made on the two sites visited in the prior year in KwaZulu-Natal. The projects had been dormant since the previous audit in 2016, and the contractors had abandoned the
project. In addition, quality issues were noted during site visits to both of these projects. Quality issues were also noted in the other three provinces audited.
• Contractors were terminated for eight of the 20 projects in the Eastern Cape, which impacted on delays as well as the cost of projects. One of the reasons given for the terminations was that
some contractors cancelled their contract due to financial analysis and under costing. In some cases, the cost of the replacement contractor was more than the original contract. Also, in most
cases the total cost of the projects was more than the original value.
• Delays of between four and 14 months were experienced on all projects in Mpumalanga. While delays of between three and 22 months were experienced on all projects in Eastern Cape. Some
of the reasons given for these delays were as follows: Additional work carried out on site/scope changes Inability to obtain materials
• Not all information requested for audit purposes was submitted by the department. A limitation of scope was experienced in all four provinces audited, with the majority of the outstanding
information being for Kwa-Zulu Natal and Limpopo. The department did not effectively maintain their archiving system, which resulted in some procedures not being performed.
The objective of ASIDI is to eradicate the Basic Safety Norms backlog in schools without water, sanitation and electricity and to replace those schools constructed from inappropriate material (mud, plankie, asbestos) to contribute towards levels of optimum learning and teaching. The Schools Infrastructure Backlog Grant (SIBG) funds the ASIDI portfolio.
MTSF allocated budget
=
R1.979 billion
- Actual Spending =
R1.049 billion (53%).
Material
underspending of R930 million The underspending is due to payments in respect of ASIDI projects. The process of rationalisation for schools had an impact on the spending trends for the ASIDI project. Also significant matters identified with implementing agents contributed to projects not being finalised or delayed significantly
Unqualified with
finding: Controls
were not in place
with regard to the
daily and monthly
processing of
transactions
relating to the
transfer of finalised
ASIDI construction
projects from
work–in–progress
to the immovable
asset register
which resulted in
errors in the
immovable asset
register.
Procurement and
Contract
Management: Findings included the following: 1. Irregular expenditure
as a result of non-compliance by implementing agents.
2. Expired MoAs with implementing agents not approved/ extended as required.
3. Expenditure incurred exceeded the contract values for which variation orders had to be applied for. The variation orders approved in this regard exceeded 20% of the contract values.
4. Inadequate project management resulted in project timeline delays of between 2 – 24 months
Material
adjustments
were noted in
the in the
infrastructure
indicators
(completed
schools, water,
sanitation and
electricity).
Furthermore it
was noted that
none of these
targets were
achieved in the
reported
annual
performance
report.
Compliance
Pre-determined Objectives Budget
vs Spending
Financial Management
18 No material
findings reported
Material
findings reported
• The lack of oversight by the department resulted in a number of fictitious learners being entered into the programme. The programme is indented for people that cannot read and write, however, as an example, the audit note that learners that have matric were registered on the programme resulting in material overpayment of stipends and the learner numbers reported.
• Instances of potential fraud noted where learners with matric were registered as Kha Ri Gude learners despite the
programme intended for learners to acquire the basic skills of literacy.
• Challenges noted to confirm existence and physical attendance of learners, VEs, coordinators and supervisors,
• Challenges noted to confirm whether actual training was taking place, and
• Material findings noted with regard to the reliable reporting of targets achieved for the Kha Ri Gude indicator
The aim of Kha Ri Gude is to empower (skills development) socially disadvantaged people to become self-reliant and to be able to participate more effectively in the economy and society.
The Kha Ri Gude
Literacy Campaign is
informed by the
Constitution of South
Africa, which states
that “Everyone has the
right to a basic
education, including
adult basic education
(Chapter 2, Clause 29,
1a). According to
Statistics SA (2001),
there were
9.6 million illiterate
adults in South Africa
above the age of 15.
Of these, 4.7 million,
including people living
with disabilities, were
illiterate and
innumerate in one of
the 11 official
languages.
- MTSF
allocated
budget =
R 384 million
- Actual
Spending = R358 million
- (93%).
The
underspending
on this
programme is
due to the low
number of
volunteers
employed in the
provinces as a
result of low
numbers of
learners
registered or the
2016 campaign.
Unqualified with finding:
Oversight over service
providers entrusted with
the payments of stipends
to monitors of the Kha Ri
Gude projectto ensure
that classes take place
and that learners exist
was not adequately
monitored to ensure
compliance with policies
and procedures and
therefore did not prevent
and detect payments of
stipends to tutors for
teaching deceased
learners. Oversight by the
department did not detect
the timely verification with
the department of Home
Affairs whether learners
were deceased for which
tutors received stipends
for
Procurement and
Contract
Management:
Based on the
significance of the
findings identified
when quantified, it
was agreed that the
department disclose
the management
fee charged by
SAB&T of
R16million as
irregular
expenditure for the
current and prior
year due to proper
SCM not being
followed in
appointment of
SAB&T the service
provider
A significant
material
adjustment was
made to the
numbers
reported after
eliminating
fraudulent
learners entered
into the
programme. It
was identified
some learners
that entered the
programme
already
completed grade
12. Due to this
R11million was
disclosed as
fruitless and
wasteful
expenditure in
the financials
Compliance Pre-
determined Objectives
Budget vs
Spending
Financial Manage-
ment
19
Improvement in financial health
1 (DBE)
1 (DBE)
1 (DBE)
2014-15
2015-16
2016-17
Material uncertainty exists whether of auditees can continue to operate in future 0%
Two or less unfavourable indicators
More than two unfavourable indicators
Significant doubt that operations can continue in future and/or auditee received a disclaimed or adverse opinion, which meant that the financial statements were not reliable enough for analyses
• Included in the net assets of the department is finalised schools to the value of
R5.5billion that have not been transferred to custodian departments in terms of section
42 of the PFMA
• The commitments disclosed as per note 20 increased by R2.93 billion from R3 billion in
the 2015-16 financial year to R5.93 billion in the 2016-17 financial year. It is therefore
necessary that the department formalise the plans for the future implementation of the
ASIDI programme so that resources (financial and human) can be utilised appropriately.
• There was material underspending of the budget during the current and prior year. The
department indicated that it was as a result of the rationalisation and mergers of
schools. The latter will have to be prioritised as it is necessary for determination of future
commitments to the department.
• Debt collection particularly for the recovery of contingent assets is long outstanding and
will need to be followed up. The processes with regard to construction guarantees will
need to be evaluated especially if the commitments approved and not contracted are
realised
Key concerns identified
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Movement on the quality of financial statements, annual performance reports and compliance
100% (DBE, SACE, UMALUSI)
100% (DBE, SACE, UMALUSI)
2016-17 2015-16
100% (3)
100% (3)
100% (3)
100% (3)
100% (DBE, SACE
, UMALUSI)
33% (DBE)
67% (SAC
E, UMALUSI)
2016-17 2015-16
100% (3)
33% (DBE)
100% (DBE, SACE,UMALUSI)
100% (DBE, SACE,UMALUSI)
2016-17 2015-16
Audit of financial statements Findings on
annual performance reports
Findings on compliance
with key legislation
Unqualified Qualified Adverse Disclaimed AFS submitted
on time AFS and APR submitted with no material misstatements
With no findings
With findings
Unauthorised, irregular as well as fruitless and wasteful expenditure
disclosed in the financial statements in DBE 2016-17
PFMA
R 727 million (DBE)
R million
R 6 million (DBE)
R600 million (DBE)
R 2 million (DBE)
R 6 Million (DBE)
R622 million (DBE)
R 11 million (DBE)
R 6 million (DBE)
Irregular expenditure
Fruitless andwasteful expenditure
Unauthorisedexpenditure
Expenditure
incurred in
contravention
of key
legislation;
goods
delivered but
prescribed
processes
not followed
Expenditure
not in
accordance
with the
budget vote/
overspending
of budget or
programme
Expenditure
incurred in
vain and
could have
been avoided
if reasonable
steps had
been taken.
No value for
money!
Definition UIFW amounts incurred by entities in portfolio Nature of UIFW expenditure R’million
2016-17 2015-16 2014-15
• The unauthorised expenditure is with regard to the amount paid for the National Teacher Awards amounting to R6.488 million in the 2014/15 financial year. The Department wrote a letter to National Treasury and requested the approval by Parliament; the Department is awaiting the response.
• During the 2016/17 financial year, the Department conducted an investigation on the Kha Ri Gude campaign. The investigation was to establish whether volunteers offered classes. The investigation revealed that there were centres were no classes took place and volunteers received stipends, also some learners already had matric. The funds paid to the affected volunteers, learners and stationery distributed has been disclosed as fruitless and wasteful expenditure.
• The extensions on the MOAs were not renewed on time for the IAs.
• When appointing the Adopt-A-School, the deviation on procurement requirement without required appropriate approval.
• During the 2015/16 financial year, it was discovered that during evaluation 1 of the stages was misinterpreted and where site visits should have being done to all bidders. Based on these, the management fee paid to the service provider was declared as irregular expenditure.
• The SCM processes were not followed in the replacement of non performing contractors.
Audit report
impact
None
Fruitless and
wasteful
expenditure was
reported and the
impact and internal
control deficiency
were reported in the
audit report
Irregular
expenditure was
reported and the
internal control
deficiency was also
reported in the audit
report
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Most common findings on supply chain management
33% (DBE)
33% (DBE)
33% (DBE)
Non-compliance with SCMrequirements during the
appointment of replacementcontractors
Non-compliance with legislationon contracts (expired MoA's with
Ias not renewed)
Three written quotations notinvited
23
Fraud and consequence management
Previous year unauthorised, irregular and fruitless and wasteful expenditure
reported for investigation
33% (DBE) (Irregular
expenditure reported during the prior year)
33% (DBE) (Irregular
expenditure reported during the prior year)
2016-17 2015-16
Not investigated Investigated
• The DBE had findings on non-compliance with legislation on consequence management which had material findings
24
Supply chain management findings reported to management for investigation
33% (DBE), 10 IDT
projects were under
investigation by the SIU
0% (0), 0 instances
33% (DBE), 10 instances
Other SCM findingsreported for investigation
Employee(s) failed todisclose interest in supplier
Supplier(s) submittedfalse declaration of interest
SCM findings reported for investigation during the
2015-16 audit process
(all auditees)
Follow-up of the previous year’s SCM
findings reported for investigations.
All investigated Some investigated None investigated
0
0
0
0
0
0
1
0
1
Other SCM-related allegations
Employee(s) failed to disclose interest in supplier
Supplier(s) submittedfalse
declaration ofinterest
25
If officials who deliberately or negligently ignore their duties
and contravene legislation are not held accountable for their
actions, such behaviour can be seen as acceptable and
tolerated.
Management (accounting officers/ authorities and senior
management), the political leadership (executive authorities)
do not respond with the required urgency to our messages
about addressing risks and improving internal controls.
Root causes
100% (DBE, SACE,
UMALUSI)
100% (DBE, SACE,
UMALUSI)
Slow response to improving key controls and addressing risk areas
Inadequate consequences for poor performance and transgressions
4
AGSA audit methodology improvements
26
Status of key focus areas
Oversight and
monitoring
(Unchanged) Financial management
(Unchanged)
Performance management
(Unchanged)
Procurement and contract management
(Unchanged) Compliance management
(Unchanged)
HR management
(Unchanged)
IT management
(Unchanged)
Financial health
(Improving)
Status of
records review
Pro-active
follow up
procedures
Financial and non – financial information
(internal and external reports/documents
& discussions with senior managers)
Feedback linked to Focus Areas
AGSA audit methodology improvements
Engaging accounting officers in conversations that are insightful, relevant and have
an impact
Identify matters that add value in putting measures
and action plans in place well in advance to
mitigate risks
Assess progress made in implementing action
plans/ follow through with commitments made in
previous engagements
Provide our assessment of the status of key focus
areas that we reviewed
Identify key areas of concern that may derail
progress in the preparation of financial and
performance reports and compliance with relevant
legislation and consequential regression in audit
outcome
Key control engagements / status of records review – objectives
27
27
28
29
Sou
rce:
Rob
ert K
litga
ard
(aca
dem
ic a
nti-c
orru
ptio
n re
sear
ch)
Correlation between low accountability, corruption and impact on service delivery
Corruption
Service Delivery
29
5
Sector audit outcome – (2016 -17)
30
31
Sector audit outcomes – (2016-17)
Auditee Movement
Outcomes (2016/17) Outcomes (2015/16)
Audit Opinion PDOs
Non-
compliance
with laws and
regulations
Audit Opinion PDOs
Non-
compliance
with laws and
regulations
Eastern Cape Qualified Yes Yes Qualified Yes Yes
Free State Qualified Yes Yes Qualified Yes Yes
Gauteng Unqualified with
findings No Yes
Unqualified with
findings No Yes
KwaZulu-Natal Unqualified with
findings Yes Yes
Unqualified with
findings Yes Yes
Limpopo Qualified Yes Yes Disclaimer Yes Yes
Mpumalanga Qualified Yes Yes Qualified Yes Yes
Northern Cape Unqualified with
findings Yes Yes
Unqualified with
findings Yes Yes
North West Unqualified with
findings Yes Yes
Unqualified with
findings Yes Yes
Western Cape Unqualified
without findings No No
Unqualified
without findings No No
Basic Education Unqualified with
findings Yes Yes
Unqualified with
findings Yes Yes
Yes No
No material
findings
reported
Material
findings
reported
6 School Infrastructure
32
33
Key phases of service delivery – (Value Chain Analysis – School Infrastructure)
1.
Demand
management
5.
Reporting &
Impact analysis
3.
Project
management
2.
Acquisition
management
4.
Commission and
Utilisation
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35
Value Chain Analysis – School Infrastructure
Project name: School Infrastructure (Education sector) High level overview of the value added findings on infrastructure according to value chain stages,
1. Demand management Infrastructure needs were not correctly identified and identified during the needs determination process. The latter resulted in the construction of schools in locations that will be possibility deemed as not being viable projects. There are presently a number of projects that were started and had to be terminated on account of it not being viable projects that should not have been approved for construction. Expenditure incurred in this regard is presently being investigated to determine whether it was indeed wasteful expenditure and whether officials responsible should be held accountable. We take note of the subsequent intervention via the rationalisation of schools and the guidelines developed.
2. Acquisition management Instances of non-compliance were still identified in the areas of supply chain management and asset management processes performed at implementing agents because of ineffective oversight by the departments (DBE and PED’s) over compliance with laws and regulations by the implementing agents. The departmental oversight was ineffective in detecting matters of non-compliance by implementing agents. In addition, amendments to construction contracts were approved which was greater than 20% or R20 million (including all applicable taxes) of the original approved contract without approval for the deviation from National Treasury.
3. Project management The findings from the site visits revealed instances of poor quality workmanship of projects. This was due to deficiencies in project management processes specifically with attention to regular site visits by professional service providers (architects, quantity surveyors and engineers) not being conducted which resulted in corrective measures not being able to be implemented before final completion of construction projects. Of particular concern is the impact on service delivery where significant delays of between 2 – 24 months was experienced and schools such as the Adopt-A-School Foundations were still not in-use. Teaching and learning therefore took place in inappropriate structures potentially impacting the quality of education provided to learners.
36
Value Chain Analysis – School Infrastructure
Project name: School Infrastructure (Education sector)
4. Commissioning and utilisation During the current and previous three years, we reported a number of cases where it was found that immovable assets which came into being because of the ASIDI construction projects have not been transferred to the custodian department concerned. These immovable assets were constructed by implementing agents on behalf of the department. From this we further identified that there was an unnecessarily long period to finalise transfer of the assets despite the fact that practical and or final completion certificates were received and the assets were being utilised by the beneficiaries. Follow-up of the prior year findings revealed that during June 2017, there were still no PFMA section 42 certificates signed by the department and the custodian departments, hence no immovable assets were disposed of. Based on the delays, the department has not taken timely action to ensure that projects at the practical and final completion certificate stages are finalised and transferred to the custodian departments in accordance with the requirements of section 42 of the PFMA within the required timeframe. We furthermore noted during the site visits that classes were not always used for the purposes intended which is teaching and learning. The latter is illustrated where in one of the schools visited; the security guard lives in one of the classrooms and makes food inside the room with a paraffin stove. As a result, the floor has been damaged and the walls and cupboards are soiled with food spatter and other foreign matter.
5. Reporting Record keeping for school infrastructure was lacking and resulted in modified opinions and material adjustments to both financial and performance reporting. The departments (DBE and PED’s) could not provide credible financial information from implementing agents necessary for the disclosure items in the financial statements of the department, e.g. commitments, accruals and immovable tangible capital assets.
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Value Chain Analysis – School Infrastructure
Project name: School Infrastructure (Education sector)
CONCLUSION
• Certain departments did not have enough capacity to implement projects. There was heavy reliance on
consultants/project managers by certain departments.
• The lack of consequences for poor performance and transgressions resulted in matters previously reported being
repeated and action plans developed not being implemented as desired.
• Projects were not planned and managed effectively by the provincial departments and their implementing agents.
This resulted in the following;
• Poor quality of work and poor workmanship occurred in six provinces. Furthermore, in four provinces, the
assessment and certification of work performed was not well managed which resulted in payment of
substandard/poor quality work.
• There were delays in completion of the projects in eight provinces. In three provinces; the delays were due
to late payment of the contractors by the departments and/or their implementing agents.
• The Standards for Infrastructure Procurement and Delivery Management (SIPDM) was not fully
implemented in certain provinces..
• There were high number of variation orders in four provinces (FS, GP, KZN and NC), these variation orders
were approved for items that should have been included in the scope, and this resulted in increased contract
values for projects.
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Picture 1: School hall broken down due to excessive cracks
(Rood pan Secondary School: Northern Cape)
Picture 2: Excavation of foundation (Roodepan
Secondary School: Northern Cape
Picture 3: Damaged bricks used to build walls (Phutlo
Secondary School: Limpopo)
Picture 4: Cracks from foundation through bricks (Valspan
Secondary School: Northern Cape)
Infrastructure: ASIDI/EIG
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Early Childhood Development (ECD):
GRADE R
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ECD Grade R: Background • Follow-up audit
• Previous audit conducted in 2010-11
• Findings included in 2013-14 Education Sector Report
• Sub-focus areas for 2016-17
• Policy, guidelines, strategy and planning
• Enabling resources
• Systems and processes
• Outputs and outcomes (postponed to 2017-18)
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ECD Grade R: Findings 2016-17
Improved. Regressed. Unchanged. New finding
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ECD Grade R: Findings 2016-17
8
School management and governance
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School management deficiencies
Annual management processes not adhered
School Improvement plans not informed by self diagnostic assessment and also not
aligned to annual reports
Deficiencies on educator utilisation
and leave management
Learner discipline, and curriculum coverage not
adequately reported
School data not managed
adequately and consistently
Deficiencies on school governing body and asset
management record keeping
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National school management audit
Audit
criteria
Key findings Root causes
Policy directive
for adherence to
annual
management
processes.
Adherence to annual management processes is still an issue in
some provinces as they are guided by different circulars on how
to report. Although Goal 21 of the Action Plan to 2019 stipulate
the need to adhere annual management processes, the national
department did not monitored whether provincial education
departments have put measures in place to ensure that
education districts and schools adhere to annual management
process of submitting annual academic performance report to
the Head of Department or the delegated officials.
The DBE did not provide a clear
directive for the provincial
education departments to adhere
to annual management
processes. Monitoring of whether
provinces are adhering to annual
management processes was also
not undertaken.
There is awareness for underperforming secondary schools to
prepare and submit APIP in almost all provinces. However, there
are no clear directives for underperforming primary schools to
submit APIP.
The Provincial education departments did not provide a clear
directive for the education districts to support schools to adhere
to annual management processes. The provincial departments
do not have a consolidated record of which education districts
provided support and which did not provide support to schools
so that corrective actions could be taken.
There need to guide education
districts on how to support
schools to adhere to annual
management processes was not
prioritised by provincial education
departments in their strategic
planning documents.
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Provincial audit result
Audit criteria Deficiencies identified EC FS GP KZN LP MP N
C
NW WC
Guidance for
adherence to
annual
management
processes.
The Provincial education departments did not
provide a clear directive for the education
districts to support schools to adhere to annual
management processes. The provincial
departments do not have a consolidated
record of which education districts provided
support and which did not provide support to
schools so that corrective actions could be
taken.
Root cause
There need to guide education districts on how to support schools to adhere to annual
management processes was not prioritised by provincial education departments in their strategic
planning documents
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Education district audit result
Audit criteria Deficiencies identified EC FS GP KZ
N
LP MP N
C
NW WC
Support and
monitoring
schools for
adherence to
annual
management
processes.
The education districts did not provide
support for schools to adhere to annual
management processes. Monitoring of
whether schools are adhering to annual
management processes was also not
undertaken.
Root cause
The need to monitor and support school was not articulated by the respective provincial
education departments.
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School management findings
Key Findings EC FS GP KZN LP MP NC NW WC
Completion and submission of annual reports, quarterly
reports and annual plans
School records keeping and reporting of learner discipline,
learner enrolment, educator composition, development,
utilisation and leave management.
Functionality of the school governing body through
meetings and record keeping of minutes, agendas and
attendance registers.
Analysis and reporting of learner performance.
Monitoring and reporting of curriculum and content
coverage.
Adherence to policy guidelines and requirement such as
LTSM, Nutrition and Finance.
School asset management (physical and learning facilities
such as ICT equipment) by keeping an updated register.
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Improving school performance School planning processes • Self diagnostic assessment • Whole School Evaluation • School Improvement Plan
School performance management
• School management team (SMT)
• School committees – DSG, LTSM, Discipline. Facilities
School performance monitoring and oversight
• School Governing Body oversight
• Education districts
• National and provincial monitoring
School Reporting Systems
- Monthly reports
- Quarterly reports
- Annual School Performance Report
Sch
oo
l Man
agem
en
t an
d A
dm
inis
trat
ion
Sys
tem
s
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