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Audit Outcomes of Basic Education Sector & Related Entities

This presentation discusses the audit outcomes of the Basic Education sector and related entities for the year ended 31 March 2011. It covers budgeted and actual expenditure, audit outcomes per department, financial statements, areas of non-compliance, and drivers to improve audit outcomes.

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Audit Outcomes of Basic Education Sector & Related Entities

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  1. Presentation to the Basic Education Portfolio Committee on the audit outcomes of the Basic Education sector and related entities For the year ended 31 March 2011 19 October 2011 By: Godfrey Diale Meisie Nkau

  2. 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.

  3. Agenda discussion points • Audit outcomes of the Education Sector • Conclusions on audit of pre-determined objectives • Outcomes on Education Sector Auditing • Highlights on the performance (financial and non-financial) of the entities related to the Department of Basic Education

  4. Budgeted and actual expenditure per province

  5. Audit outcomes of education sector

  6. Audit outcomes per department in the Education Sector (Financial information)

  7. Movement in audit outcomes from 2009-10 to 2010-11 MP DBE, WC, GP LP NW FS, NC KZN EC

  8. Financiallyunqualified with findings Qualified/ Adverse/ Disclaimer Three year progress in the Education Sector audit outcomes

  9. 2010-11 Comparison of Education Sector with other Sector departments

  10. Financial statements areas qualified

  11. Corrections of material misstatements identified by auditors

  12. Unauthorised and irregular expenditure

  13. Unauthorised expenditure

  14. Irregular expenditure

  15. Fruitless and wasteful expenditure

  16. Fruitless and Wasteful Expenditure

  17. Root causes of defective financial statements AFS contain material misstatements causing them not to fairly present the financial position at March 2011 or the financial results for the year then ended Action plans not specific, lack fixed timeframes Portfolio committee monitoring of action plans Slow rate of filling of vacancies Lack of accountability and consequences for actions / inaction Poor key control monitoring by leadership Skill-sets of staff employed Financial reporting systems limitations not addressed Ineffective audit committee review of in-year AFS Inadequate internal audit reporting of action plan implementation

  18. Predetermined objectives

  19. Predetermined objectives (PDO) findings

  20. Root causes of defective service delivery reports Inadequate formal planning for PDO reporting Do not meet regulatory requirements Not useful Not reliable Organisational structures not aligned Lack of monitoring by leadership Lack of accountability and consequences for actions / inaction Ineffective audit committee oversight Structures not capacitated Inadequate internal audit testing systems and data PDO reporting not included in performance agreements Poorly defined roles and responsibilities

  21. Areas of findings on non-compliance with laws and regulations

  22. Areas of findings on supply chain management

  23. Root causes of non-compliance Leadership not actively promote culture of compliance Poor examples set by senior management Financial loss Irregular expenditure Qualified financial statements Delayed action by oversight structures Lack of accountability and consequences for actions / inaction Vacancies create lack of capacity to monitor compliance Compliance not a specific audit committees focus area No compliance audits conducted by internal audit units IT systems lack enforcement or monitoring reports No specific control measures to prevent/detect non-compliance

  24. Findings on IT control focus areas

  25. Drivers to improve audit outcomesLeadership

  26. Drivers to improve audit outcomes Financial and performance management

  27. Drivers to improve audit outcomesGovernance

  28. EDUCATION SECTOR AUDITING Objective The education sector auditing aims to provide an overview of Financial, performance and service delivery matters from a national and provincial departments perspective within the education sector. Service delivery issues are analysed to determine the factors that contribute to low service delivery and recommendations are made to improve service delivery in the selected areas. Deliverable Education SECTOR general report (included in the General report)

  29. Education Sector focus areas – 2010/11 The following specific sector service delivery focus areas were audited to identify and highlight any service delivery challenges in these areas: 1. HIV & Aids (Life Skills and Education) conditional grant to provinces* 2. National School Nutrition Programme conditional grant to provinces* 3. Leaner Teacher Support Material 4. Learner Transport Scheme 5. Allocation of funds to schools 6. Technical Secondary Schools re-capitalisation grant* 7. Infrastructure* * Funded through the DORA allocation

  30. 2010/11 Allocations of grantsHIV & Aids (Life skills Education), National School Nutrition Programme. Technical Secondary Schools Recapitalisation and Infrastructure

  31. Focus area: HIV and AIDS life skills education grant

  32. Focus area: National school nutrition programme

  33. Focus area: National school nutrition programme (cont)

  34. Focus area: Learner teacher support material

  35. Focus area: Learner transport scheme

  36. Focus area: Learner transport scheme (Cont)

  37. Focus area: Allocation of funds to schools

  38. Focus area: Technical secondary schools re-capitalisation

  39. Focus area: Infrastructure

  40. Entities related to the Department of Basic Education Education Labour Relations Council (ELRC) Council for Quality Assurance in General and Further Education and Training (Umalusi) South African Council for Educators (SACE)

  41. Outcome of audits for entities related to the Department of Education – 2009/10

  42. Reported matters for ELRC – 2010/11 Education Labour Relation Relations Council Irregular Expenditure - R2.5 million Fruitless and Wasteful Expenditure - R116 000 Procurement and Contract Management - Non-compliance with regulations relating to procurement and supply chain management Annual Financial Statements - Not prepared in all material aspects in accordance with generally accepted accounting practice (GRAP) as required by section 55(1)(b) of the PFMA.

  43. THANK YOU QUESTIONS??

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