14 October 2014

1. Briefing to the Portfolio Committee on The Department of Agriculture, Forestry and Fisheries and its entities on the audit outcomes for the 2013/2014 financial yearPresenters: Meisie Nkau and Fanie Kok 14 October 2014

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. Purpose of presentation To provide members of parliament with the necessary information/guidance on the audit outcomes for the portfolio to enable the Portfolio Committee to effectively execute their oversight function

4. Audit outcomes of the portfolio (AGSA audits) Stagnation in audit outcomes Audit outcomes area Compliance with legislation (C) Financial statements (F) Performance reports (P)

5. Audit outcomes for the portfolio

6. Audit outcomes of the portfolio 2013-14 Audit outcomes Compliance with regulatory requirements Usefulness Reliability E x i s t e n c e T i M e l i n e s s € P r e s e n t a t i o n C o n s i s t e n c y M e a s u r a b i l i t y R e l e v a n c e V a l i d i t y A c c u r a c y C o m p l e t e n e s s DAFF DAFF DAFF DAFF DAFF NAMC OBP No matters reported Reported in audit report

7. Audit outcomes for the portfolio Assurance levels First level Senior management Accounting officer/authority Executive authority Second level Internal audit unit Audit committee Third level Portfolio committee

8. Audit outcomes for the portfolio Audit areas Key controls Performance reports Compliance with legislation Financial statements

9. Audit outcomes for the portfolio Quality of submitted performance reports Supply chain management Quality of submitted financial statements Financial Health Human resource management Information technology

10. Audit outcomes for the portfolio Most common root causes Slow responses by management A root cause at auditees 4 Key officials lack appropriate competencies A root cause at auditees 2 Lack of consequences for poor performance and transgressions A root cause at auditees 1 Improved Regressed Unchanged

11. Audit outcomes for the portfolio Status of key commitments by minister Align the performance agreements of senior management with the departments strategic goals. Implement a plan to identify specific areas where service delivery will take place. Ensure linkage between the budget to the targets in the strategic plan. Checks and balances to ensure credibility and completeness of financial and performance reports will be implemented. Plan to support agricultural schools and encourage youngsters to study in the agricultural field. Collaborate with the provincial MECs to ensure proper monitoring and evaluation of DoRA funds. Strengthen the monitoring and evaluation unit within the department. Empower the internal audit function to be fully effective and functional. Manage deviation from the procurement process in a transparent manner. Investigate ways to ensure that the Marine Living Resource Fund establish their own board to enable better oversight responsibility. Not implemented In progress Implemented New

12. Oversight model OVERSIGHT: Parliament, provincial legislature or municipal council • Identify desired impacts Assess and adjust Specify performance indicators Monitor and take Set targets corrective action and allocate resources Policy development Strategic Planning Operational planning and budgeting Accountability INSTITUTION National department Provincial department Municipality Public entity Municipal entity End-year reporting Implementation and in-year reporting

13. Oversight component - Portfolio committee mandate Role of Portfolio Committees (Rule 201)

14. Considerations for Portfolio Committees when dealing with performance monitoring • Is the Strategic Plans and Annual Performance Plans for entities aligned to the National Development Plan • Does the entity have adequate resources (human and financial) available to achieve predetermined objectives • Are the targets realistic (can it be done) • How are the entities ensuring that Strategic Plans and Annual Performance Plans will be achieved (performance contracts, quarterly monitoring, etc.) • The Portfolio committee should review the quarterly progress of entities with regard to predetermined objectives and contributions to NDP • The Portfolio committee should review annual achievement of predetermined objectives by entities (Annual Reports) • The Portfolio committee should approve and track changes to strategic plans and annual performance reports

15. Support oversight – complimentary mandate Management assurance First level of assurance Oversight assurance Second level of assurance Independent assurance Third level of assurance Senior management Senior management Accounting officers/ authority Accounting officers/ authority Executive authority Coordinating / Monitoring institutions Internal audit Audit committee Oversight (portfolio committees / councils) Public accounts committee National Assembly Required assurance levels Required assurance levels Required assurance levels Extensive Extensive Extensive Extensive Extensive Extensive Extensive Extensive Extensive • Management’s assurance role • Senior management– take immediate action to address specific recommendations and adhere to financial management and internal control systems • Accounting officers/ authority– hold officials accountable on implementation of internal controls and report progress quarterly and annually • Executive authority– monitor the progress of performance and enforce accountability and consequences • Oversight’s assurance role • National Treasury/ DPSA– monitor compliance with laws and regulations and enforce appropriate action • Internal audit– follow up on management’s actions to address specific recommendations and conduct own audits on the key focus areas in the internal control environment and report on quarterly progress • Audit committee– monitor risks andthe implementation of commitments on corrective action made by management as well as quarterly progress on the action plans • Role of independent assurance • Oversight (portfolio committees)– review and monitor quarterly progress on the implementation of action plans to address deficiencies • Public accounts committee– exercise specific oversight on a regular basis on any report which it may deem necessary • National Assembly – provide independent oversight on the reliability, accuracy and credibility of National and provincial government

16. How does clean administration improve service delivery Creating a better and dignified life for the citizens of South Africa through timely effective, efficient and economical SERVICE DELIVERY

17. Accountability and remedies to address transgressions and poor performance A common reaction to the general reports relates to the questions posed by many, including key role players in government, about the need for accountability and consequences and how these can be enforced. Legislation provides the answer to this question as it clearly defines accountability and the remedies. Details are available on pages 44 to 65 of our booklet: In Brief: The Auditor-General of South Africa

18. Accountability and remedies to address transgressions and poor performance • This AGSA booklet highlights the legislation that enables remedies to be applied where national and provincial departments are guilty of transgressions and poor performance. It addresses the following typical matters reported in the general • reports: • Failure to comply with legislated obligations and responsibilities • Unauthorised, irregular and fruitless and wasteful expenditure • Possible fraud and corruption • Poor work performance – officials and suppliers • Other non-compliance with legislation

19. Questions