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CHAIRPERSON FOR FINANCE COMMITTES

AG’S ACTION PLAN

DATE: 29 MAY 2012

PURPOSE

• Role of council and audit committee in the action plan

• To provide the status of municipalities in terms of implementation of the action plan

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ACTION PLAN• Audit committee will have to check the progress on

the implementation of the action plan .• The committee is responsible for providing advice/

recommendations to Council• Based on the issues raised by AG, finance committee

can monitor or play an oversight role by analysing reports (e.g. sec 71, quarterly reports, etc) tabled in Council for the current financial year

• Chairperson of finance can request a report on the progress on implementation of AG’s Action plan

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Action Plans to Address Findings

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Municipality Number of findings

No of findings addressed

No of findings outstanding

Percentage addressed

Capricorn 37 28 9 76%

Polokwane 73 28 45 38%

Blouberg 62 8 54 13%

Aganang 81 3 78 4%

Lepelle-Nkumpi Action plan not ready as the AGSA is currently finalising the management letter and audit report with the municipality

Molemole 69 44 25 64%

Mopani 27 11 16 41%

Ba-Phalaborwa 46

Tzaneen 100

Maruleng 24 11 13 46%

Giyani 85

Letaba 40 24 16 60%

Action Plans to Address Findings

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Municipality Number of findings

No of findings addressed

No of findings outstanding

Percentage addressed

Waterberg 10

Mogalakwena 20

Mookgophong 107 24 83 22%

Modimolle 60

Bela Bela 102

Lephalale 62 32 27 52%

Thabazimbi 57

Sekhukhune 85

Fetakgomo 30 30 0 100%

Makhuduthamaga 86 14 72 16%

Tubatse

Elias Motsoaledi 65 12 53 18%

Ephraim Mogale 31 8 23 26%

Action Plans to Address Findings

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Municipality

Number of findings

No of findings addressed

No of findings outstanding

Percentage addressed

Vhembe 45 27 18 60%

Mutale

Thulamela 5 3 2 60%

Musina Action plan not developed

Makhado 56 26 30 46%

PT developed a Provincial standardised action plan to be used by municipalities.28 municipalities developed action plans which have been reviewed by the Audit Committee.Of 28 submitted action plans 17 have reported progress

Challenges on implementation of the Action Plans

• Audit steering committees not functional throughout the year

• Internal Audits not reviewing the implementation of audit action plans timeously

• Root causes not properly identified• Management not attending all audit steering

committee meetings• High vacancy rate / Inappropriate appointment• Lack of technical skills ( GRAP Standards)

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Audit Outcomes per District

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Audit Outcomes per District

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Concerns and Challenges

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1. Lack of timely submission of requested information2. Lack of supporting documentation to support balances3. Availability of key personnel such as the following

– CFOs– Section 54, 56 and 57 managers– Finance personnel– Technical Services personnel– Human resource personnel

4. Lack of knowledge and understanding of accounting standards 5. Expectations of the auditors to identify and correct

misstatements6. High reliance on consultants to do work on behalf of municipal

employees

Concerns and Challenges

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7. Lack of monitoring and review of work done by consultants8. Lack of monitoring and review by managers and heads of

departments9. Action plans on prior year findings drawn up for

compliance purposes, recommendations not implemented10. No action plans on IT findings and it doesn’t seem to be

taken seriously, because there is a perception that it does not affect financials

11. MFMA Circular 50 and presentations made to CFOs on ideal audit file not adhered to

12. Commitments made by management on addressing control weaknesses as per key controls not done

Concerns and Challenges

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13. Management does not see the value of a fully fledged internal audit department

14. Numerous non compliances with SCM policy and PPP15. Reporting on pre-determined objectives not taken seriously16. Lack of knowledge and understanding on how to report on

pre-determined objectives17. Non adherence to SLA’s with regard to water related

services18. Lack of constant monitoring and ensuring the correctness

of transferred balances with regard to water related transactions

19. Financial systems that are unreliable, differences between trial balances and AFS

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Thank you