AGSA Strategic Plan and Budget 2011-2014 SCoAG Presentation

1. AGSA Strategic Plan and Budget 2011-2014 SCoAG Presentation October 2010 (v1)

2. Mission The Auditor-General has a constitutional mandate and, as the Supreme Audit Institution (SAI) of South Africa, it exists to strengthen our constitutional democracy by enabling oversight, accountability and governance in the public sector through auditing, thereby building public confidence. This is our reputation promise

3. Table of contents • Strategic plan and budget 2011-2014 • Overview of AGSA Commitments • Organisational Environment • Overview of each goal • Simplicity, Clarity and Relevance of our reports • Visibility of our Leadership • Funding • Strengthen Human Resources • Lead by Example • Detailed Budget • Conclusion and SCoAG interventions • Audit tariffs • Audit directive

4. Overview of AGSA Commitments • We are committed to discharge our mandate in such a way that it provides value and benefits to the citizens of our country and to lead by example through being a model organisation • The AGSA remains committed to the following goals in order to impact positively on all aspects of public sector accountability: • Ensuring simplicity, clarity and relevance of the messages contained in all our reports, including the identification of root causes and recommendations and deepening of stakeholders understanding of our audit reports • Improving the visibility of our leadership through clear communication in championing the implementation of audit recommendations • Focusing on the funding model with a view to stabilising our margins and cash flow situation • Strengthening the human resource strategy, with particular emphasis on the comprehensive trainee auditor scheme • Leading by example on matters of risk management, internal controls, transformation and quality and timeliness of our products

5. Organisational environment • Our current reputation and image continues to be strengthened by an unwavering commitment to encouraging clean administration in the public sector • Our risk management framework ensure that we keep the following identified risks under control • Potential loss of stakeholder confidence in the AGSA that is mitigated mainly through our effective communication of audit messages • Shortage of appropriate skills that is being addressed through our Trainee Auditor scheme and our vigorous recruitment drive • Inability to collect from debtors is a risk that we continue to manage through more effective debt collection efforts that include the internal and external escalation of specific areas such as municipal debt

6. Initiatives Simplicity, clarity and relevance of our reports Objective: Identify root causes and make recommendations • Understanding new government and public sector development • Technical development • Enhancing auditing capacity • Provide new intake with appropriate technical training • Continually assessing the quality of engagements • Conducting cost effective stakeholder surveys • Encouraging clean audit administration through both audit processes and stakeholder interactions • Focusing on key control programme • Manage risk associated with changes in municipal administration in 2011

7. Simplicity, clarity and relevance of our reports Objective: Identify root causes and make recommendations page 7

8. Initiatives Visibility of our leadership Objective: Develop stakeholder relationships so as to encourage clean administration • Stakeholder interaction programmes, which are monitored and assessed at business unit level every quarter • Enhancement and timeous updating of the Audit Stakeholder Management Information System (AS:MIS) • Extending stakeholders’ capacity to optimally utilise our reports • Cost-effective stakeholder surveys • Auditor-General of South Africa 2011 Centenary

9. Visibility of our leadership Objective: Develop stakeholder relationships so as to encourage clean administration page 9

10. Funding • Containing the cost of audit • Implementing interventions to collect debt and improve cash flow • Controlling our overheads • Continuing ongoing assessment of the funding model • Continually reviewing our cost structure • Considering funding alternatives for discretionary audits • Generating sufficient surplus for reinvestment in the business

11. Funding Objective: Execute the AGSA mandate economically, efficiently & effectively page 11

12. Funding Objective: Execute the AGSA mandate economically, efficiently & effectively page 12

13. Funding Objective: Execute the AGSA mandate economically, efficiently & effectively page 13

14. Initiatives Strengthen human resources Objective: Have a motivated, high-performing and diverse workforce • Executive and leadership development through coaching and mentoring • Leadership pipeline and succession planning for the AGSA • Continuous review of AGSA structure • Effective teams and Employees engagement • Repositioning of the TA scheme • Continue to grow the number of qualified professionals • Introducing 360 degree evaluation • Entrenching our competency framework • Performance management • Value Rollout • Deepening public sector insights and knowledge

15. Strengthen human resources Objective: Have a motivated, high-performing and diverse workforce page 15

16. Lead by example Objective: Continual improvement of the quality of AGSA reports page 16

17. Lead by example Objective: Timeliness of all our reports page 17

18. Lead by example Objective: Adhere to standards of excellence for clean administration • Initiatives • Align our organisation with the king III guidelines on risk management • Modernisation of our environment, including our technology and process • Ongoing implementation of the Go –Green programme page 18

19. Lead by example Objective: Maximise the AGSA’s contribution to transformation • Initiatives • Engagement sessions with all relevant stakeholders on AGSA BBBEE strategy • CSI plan focusing on rural schools programme • Implementation of a high –level 3 year plan on enterprise development • Implementation of the BBBEE plan • Focus on preferential procurement, employment, management control and skills development page 19

20. Detailed Budget 2011/12

21. Table of Contents • Budget assumptions • Projected income statement • Financial highlights • Net surplus as % of audit income • Overhead analysis

22. 1. Budget assumptions • Tariffs are determined by applying a mark up factor of 1.9 (average) to direct salary costs • Budgeted for anticipated headcount rather than predefined vacancy percentage • Available hours per annum are 2042 per head • Tariff increases impacted by market related salary increase of 8.5% • Recovery rate percentage reduced from an average of 66,6% to 63.7% (year on year)

23. 2. Projected income statement

24. 3. Financial highlights (1 of 2)

25. Financial highlights (2 of 2)

26. 4. Net surplus as % of audit income

27. 5. Overhead analysis

28. Conclusion and Proposed SCoAG interventions

29. Conclusion and Proposed SCoAG interventions • This strategic plan and budget outlines the AGSA leadership’s commitment to realising our mission and vision • We are confident that we will achieve the set targets • We request SCoAG’s intervention in the following areas • Encouraging robust leadership monitoring and oversight at auditees to address audit findings • Engaging political stakeholders to assist us in the collection of outstanding fees

30. Audit Tariffs (outlined in detail in the strategic plan and budget document)

31. Audit Directive (is included in this submission)