Primarily: constitutional obligation to account
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Transcript of Primarily: constitutional obligation to account
Department of Cooperative Governance & Traditional AffairsDepartment of Cooperative Governance & Traditional Affairs
OVERVIEW OF OPERATION CLEAN AUDIT OVERVIEW OF OPERATION CLEAN AUDIT (OPCA)(OPCA)
2014 PROGRAMME2014 PROGRAMME
Minister Sicelo ShicekaMinister Sicelo Shiceka07 October 200907 October 2009
Primarily: constitutional obligation to account
To brief MP’s and interested parties on progress made up to date
Status update on the programme and its transformational agenda
PURPOSE OF THE MEETING
To provide an overview of the initiative:
“Operation Clean Audit 2014”Programme
PURPOSE OF THE PRESENTATION
“By 2014, all 283 municipalities and 9 provincial government departments must achieve clean audits on their Annual Financial Statements”.
GUIDING VISION
To provide assistance to all municipalities and provincial government departments in
achieving sustainable improvement systems for maintaining quality financial statements and
management of information.
PROGRAMME GOAL
To address all issues raised by the Auditor General and reduce vulnerability to risks in the provincial departments and municipal financial
management and governance processes through targeted projects
PROGRAMME PURPOSE
Audit queries: raised by AG recurring and not being addressed
Lessons learned from Project Consolidate 5Year LG Strategic Agenda; and Gauteng model of Operation Clean Audit Prioritised municipal and provincial audit
outcomes
CONTEXT AND BACKGROUND
PROGRAMME MILESTONES
No municipality and provincial department with Adverse and Disclaimer audit opinion
Between 2010 and 2011
60%:provincial departments and 283 municipalities achieving unqualified audit opinion
By 2012
75%:provincial departments and municipalities achieving unqualified audit
By 2013
100%: All 283 municipalities and provincial departments achieving unqualified audit opinion with no matters
By 2014
Conceptualised and packaged the programme Taking into account inputs from SALGA,
Auditor-General and Accountant-General Consulted strategic partners: private sector and
public sector institutions National Launch on the 16th July 2009 Provinces are expected to launch and ALL
the Launches are expected to be finalized by 30 October 2009
ROAD TO THE LAUNCH
PROVINCIAL LAUNCHES: REPORT
Province Status Date
NW Launched 11 Sep 2009
Limpopo Launched 23 Sep 2009
NC Launched 01 Oct 2009
WC Launched 20 Aug 2009
KZN Not Yet Awaiting for the date
F State Expected to launch 30 Oct 2009
Mpumalanga Expected to launch Awaiting for the date
Eastern Cape Expected to launch 13 Oct 2009
Gauteng Expected to launch 15 Oct 2009
• Provincial Coordinating Committees
• Led by Ambassadors and supported by COGTA, Auditor General; Accountant General (National Treasury and Provincial Treasuries)
DRIVERS OF THE CAMPAIGN
• Strengthen political oversight;
• MPACs to be established in ALL municipalities
• At APAC conference, the proposed date is 15 December 2009
POLITICAL OVERSIGHT
• All executive authorities from all spheres of government should receive monthly financial statements
• PACs and MPACs should also receive quarterly financial statements
• On yearly basis evaluation summits will take place, starting from municipalities, provinces, and National summit
Monitoring and Evaluation
• We need to strengthen our political oversight
Political message on Operation Clean Audit is critical at parliamentary/legislature portfolio committees
Continuous engagement with Auditor General and Accountant General remains critical for our understanding of issues affecting our vision
CONCLUSION
THANK YOU
SIYABONGA
REALOBOGA
Department of Cooperative Governance & Traditional AffairsDepartment of Cooperative Governance & Traditional Affairs
STATUS REPORT ON OPERATION CLEAN AUDIT STATUS REPORT ON OPERATION CLEAN AUDIT (OPCA) 2014(OPCA) 2014
PROGRAMME PROGRAMME
Dr. Batandwa SiswanaDr. Batandwa Siswana
07 October 200907 October 2009
To provide a contextual analysis and the way forward on “Operation Clean Audit 2014”
Programme
PURPOSE OF THE PRESENTATION
Situational Analysis and assessment: Provincial and Municipalities
Provincial visits and assessment reports
Data analysis: AG reports and AR’s
Previous projects i.e lessons learnt
Best practices - Gauteng model
APPROACH AND STRATEGY
Financial management
Fiscal governance
Quality service to the public
THROUGH OPCA, WE AIM TO ACHIEVE
CHALLENGES
Financial management and leadership Weak internal controls Inadequate financial controls Low culture of risk management Lack of performance management Lack of financial skills Corruption, Fraud and mismanagement Political and administrative interface
INSTITUTIONAL CHALLENGES
Municipalities and their entities: consistent disclaimers, adverse and qualified audit opinions:
• Disclaimers decreased from 105 (36%) in 2006/07 to 90 (31%) in 2007/08
• Adverse audit opinions decreased from 21 (7%) in 2006/07 to 10 (3%) in 2007/08
• Qualified audit opinions regressed from 82 (29%) in 2006/07 to 63 (22%) in 2007/08
• Financial unqualified audit opinions (with other matters) increased from 79 (27%) to 122 (42%) in 2007/08
• Financial unqualified audit opinions (with NO matters) increased from 3 (1%) to 6 (2%) in 2007/08
MUNICIPAL AUDIT OUTCOMES: Programme Trigger (basis for analysis)
Provincial departments and their entities (119) showing steady improvement with few negative cases:
• Disclaimers decreased from 4 (3%) in 2006/07 to 3 (3%) in 2007/08
• Adverse audit opinions decreased from 3 (2%) in 2006/07 to 2 (1%) in 2007/08
• Qualified audits decreased from 56 (47%) in 2006/07 to 38 (32%) in 2007/08
• Financially unqualified audits (with matters) increased from 50 (42%) in 2006/07 to 69 (58%) in 2007/08
• Financially unqualified audits (with No matters) increased from 6 (6%) in 2006/07 to 7 (6%) in 2007/08
PROVINCIAL AUDIT OUTCOMES: Programme Trigger (basis for analysis)
SITUATIONAL ANALYSIS: GOVERNANCE AND LEADERSHIP IN
MUNICIPALITIES
NATIONAL TREND ANALYSIS: MUNICIPALITIES
National
19%
33%27%
22% 25%
41%45%
39%33%
9%
23% 18% 19%
6% 9%4%
8%4% 6%
12%
0%
20%
40%
60%
80%
100%
2004/2005 2005/2006 2006/2007 2007/2008
UNQUALIFIED
QUALIFIED
DISCLAIMER
ADVERSE
AUDIT NOT FINALISED
Appointment of CFOs: Sep 2009
Province Filled Vacant
EC 42 3
FS 16 9
Gauteng 14 0
KZN 52 9
Limpopo 22 8
Mpumalanga 20 1
NW 19 6
NC 22 10
Appointment of CFOs: Sep 2009
Province Filled Vacant
WC 27 3
Audit Committees and Internal Audit Units
Audit Committee
206 (73%) Status: Established
46 (16%) Shared
31(11%) Not established
Internal Audit 221(78%) Established
21 (7%) Shared
41 (14%) Not established
Out of 283 Municipalities, 58 have not submitted the AFS, or submitted late.
SUBMISSION OF AFS: 30 AUGUST 2009
WHAT IS THE NEXT STEP?
Development of a logframe: Operation Clean Audit
Analysis of Municipal finance, stellenbocsh agreement on plan of action and agreed on PoA
Situational Analysis and assessment: Provincial and Municipalities: Audit opinions
Integrated logframe developed: Provincial and Municipalities
Consultative process: Provincial visits
PROGRAMME DEVELOPMENT (1)
Integrated logframe developed: Provincial and Municipalities
Provincial consultative process:provincial visits i.e PT, COGTA and OTP; including the OAG (in provinces)
PROGRAMME DEVELOPMENT (2)
Clear trail of supporting documentation that is easily available and provided timely
Quality of financial statements and management information
Timeliness of financial statement and management information
PROGRAMME PILLARS:AG Identified Best Practices for clean audits
Availability of key officials during audits
Development and compliance with risk management and good internal control and governance practices
Supervision / monitoring
PROGRAMME PILLARS: AG Identified Best Practices for clean
audits
IMPLEMENTATION STRATEGY: OPERATION CLEAN AUDIT
To implement the project in all provinces – provinces expected to establish coordinating committees to implement “Operation Clean Audit 2014” campaign.
Committees with representation from National and provincial departments of Cooperative Governance and Traditional Affairs, Premiers’ offices, National Treasury and Provincial Treasuries and Business Executives (Auditor-General-provincial) and provincial SALGA.
PROVINCIAL CO-ORDINATION PROGRAMME
Coordinating committees to embark on or consolidate a situation analysis of provinces, by focusing on three areas:
- Leadership- Governance - Political oversight
PROPOSED APPROACH FOR PCC
Drive the implementation of the Province specific Operation Clean Audit 2014 for municipalities and provincial government departments
Provide regular feedback to the Premiers and MECs on the programme activities and progress
Develop a programme for provincial support on Clean Audits for provincial departments
SCOPE OF REFERENCE FOR PCC
Manage the deliverables of Operation Clean Audit for Municipalities and Provincial departments
Work closely with national department (cgta) to encourage collaboration of programmes and ensure effectively integrated implementation and reporting
Create Provincial platform for Municipalities, Provincial departments and partners’ interactions for knowledge sharing
SCOPE OF REFERENCE FOR PCC
Annual Comprehensive Analysis of issues contributing to negative audit outcomes
Development of Province Wide and District Wide Audit Remedial Plans
No of municipalities and provincial departments implementing Quarterly Financial Statements
Quality of financial statements and timeous submission of financial statements to Auditor General
Establishment and functionality of internal units, audit committees, risk management committees and Audit Committee
Assessment of capacity of budget and treasury offices Capacity building and partnerships
REPORTING PARAMETERS(Central tenets of the Coordinating Commettee reports)
Joint efforts key to Operation Clean Audit – Auditor General, Acc General, Oversight Committees: working together.
The situation is conducive for a turn-around especially with progressive increase in the provincial departments achieving unqualified and clean audits
Financial management is critical to service delivery. The quality of financial statements must improve
drastically. Capacity of departments and officials as well as
partnering service providers must also be scrutinized for continuous improvement.
OPERATIONAL CONSIDERATIONS
Strengthening of Provincial coordinating committees as from November 2009
Provincial visits to discuss turn around strategies with clear milestones, starting in November
Focus on Disclaimers and Adverse audit opinions,as a matter of urgency
Way forward
Development of Capacity Strategies: COGTA, DBSA & NT, especially at local government level
Very close monitoring of implementation of provincial action plans with ‘quarterly meetings’
Conference on corporate governance for local government, June/July 2010
Way forward
Robust campaign against corruption and fraud through Ayihlome (parallel project)
Ayihlome, aims to promote ethics and fight corruption at the same time, working with DPSA and PSC, especially on conflict of interest
Will work with SAPS, the HAWKES
Way forward
Operational Clean Audit 2014 creates single national, provincial and local government agenda
Sustainability of positive audit outcomes beyond 2014
Leadership and governance-paramount
Service delivery and clean audits-critical
“Lets work together to realise the vision, it is possible!”
CONCLUSION
ENKOSI