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Primarily: constitutional obligation to account

Department of Cooperative Governance & Traditional Affairs OVERVIEW OF OPERATION CLEAN AUDIT (OPCA) 2014 PROGRAMME Minister Sicelo Shiceka 07 October 2009. PURPOSE OF THE MEETING. Primarily: constitutional obligation to account To brief MP’s and interested parties on progress made up to date

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Primarily: constitutional obligation to account

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  1. Department of Cooperative Governance & Traditional AffairsOVERVIEW OF OPERATION CLEAN AUDIT (OPCA)2014 PROGRAMMEMinister Sicelo Shiceka07 October 2009

  2. PURPOSE OF THE MEETING • 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

  3. PURPOSE OF THE PRESENTATION To provide an overview of the initiative: “Operation Clean Audit 2014”Programme

  4. GUIDING VISION “By 2014, all 283 municipalities and 9 provincial government departments must achieve clean audits on their Annual Financial Statements”.

  5. PROGRAMME GOAL To provide assistance to all municipalities and provincial government departments in achieving sustainable improvement systems for maintaining quality financial statements and management of information.

  6. PROGRAMME PURPOSE 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

  7. CONTEXT AND BACKGROUND • 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

  8. PROGRAMME MILESTONES

  9. ROAD TO THE LAUNCH • 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

  10. PROVINCIAL LAUNCHES: REPORT

  11. DRIVERS OF THE CAMPAIGN • Provincial Coordinating Committees • Led by Ambassadors and supported by COGTA, Auditor General; Accountant General (National Treasury and Provincial Treasuries)

  12. POLITICAL OVERSIGHT • Strengthen political oversight; • MPACs to be established in ALL municipalities • At APAC conference, the proposed date is 15 December 2009

  13. Monitoring and Evaluation • 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

  14. CONCLUSION • 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

  15. THANK YOU SIYABONGA REALOBOGA

  16. Department of Cooperative Governance & Traditional AffairsSTATUS REPORT ON OPERATION CLEAN AUDIT (OPCA) 2014PROGRAMME Dr. Batandwa Siswana07 October 2009

  17. PURPOSE OF THE PRESENTATION To provide a contextual analysis and the way forward on “Operation Clean Audit 2014” Programme

  18. APPROACH AND STRATEGY • 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

  19. THROUGH OPCA, WE AIM TO ACHIEVE • Financial management • Fiscal governance • Quality service to the public

  20. CHALLENGES

  21. INSTITUTIONAL 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

  22. MUNICIPAL AUDIT OUTCOMES: Programme Trigger (basis for analysis) • Municipalities and their entities: consistent disclaimers, adverse and qualified audit opinions: • Disclaimers decreased from 105 (36%) in2006/07to 90 (31%) in2007/08 • Adverse audit opinions decreased from 21 (7%) in2006/07to 10 (3%) in2007/08 • Qualified audit opinions regressed from 82 (29%) in2006/07to 63 (22%) in2007/08 • 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

  23. PROVINCIAL 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%) in2006/07to 3 (3%) in2007/08 • Adverse audit opinions decreased from 3 (2%) in2006/07 to 2 (1%) in2007/08 • Qualified audits decreased from 56 (47%) in2006/07to 38 (32%) in2007/08 • 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

  24. SITUATIONAL ANALYSIS: GOVERNANCE AND LEADERSHIP IN MUNICIPALITIES

  25. NATIONAL TREND ANALYSIS: MUNICIPALITIES

  26. Appointment of CFOs: Sep 2009

  27. Appointment of CFOs: Sep 2009

  28. Audit Committees and Internal Audit Units

  29. SUBMISSION OF AFS: 30 AUGUST 2009 • Out of 283 Municipalities, 58 have not submitted the AFS, or submitted late.

  30. WHAT IS THE NEXT STEP?

  31. PROGRAMME DEVELOPMENT (1) • 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

  32. PROGRAMME DEVELOPMENT (2) • Integrated logframe developed: Provincial and Municipalities • Provincial consultative process:provincial visits i.e PT, COGTA and OTP; including the OAG (in provinces)

  33. PROGRAMME PILLARS: AG Identified Best Practices for clean audits • 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

  34. 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

  35. IMPLEMENTATION STRATEGY: OPERATION CLEAN AUDIT

  36. PROVINCIAL CO-ORDINATION PROGRAMME • 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.

  37. PROPOSED APPROACH FOR PCC • Coordinating committees to embark on or consolidate a situation analysis of provinces, by focusing on three areas: - Leadership - Governance - Political oversight

  38. SCOPE OF REFERENCE 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

  39. 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

  40. REPORTING PARAMETERS (Central tenets of the Coordinating Commettee reports) • 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

  41. OPERATIONAL CONSIDERATIONS • 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.

  42. Way forward • 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

  43. 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

  44. 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

  45. CONCLUSION • 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!”

  46. ENKOSI

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