The AuditorGeneral Budget and Strategic Plan 2009 2012
The Auditor-General Budget and Strategic Plan 2009 -2012 7 October 2008
AG’S Strategic Vision and Values AG Vision To be recognised by our stakeholders as a relevant Supreme Audit Institution that enhances public sector accountability Values o We value, respect and recognise our people o We value and own our reputation and independence o Our accountability is clear and personal o We work effectively in teams o We are proud to be South African o We are performance driven A High Level Overview of the Budget and Strategic Plan of the Auditor General April 2009 – March 2012 Page 2
Key Strategic focus areas q Regularity audits q Performance auditing q Funding model ü Vacancies ü Debtor collection ü Trainee accountant scheme q Leadership q Governance q Reputation A High Level Overview of the Budget and Strategic Plan of the Auditor General April 2009 – March 2012 Page 3
Regularity audits Achievement of unqualified reports o Improving relevance of reporting ü Root causes analysis ü Timeliness - The timeliness measure will be increased by 5% year-on-year starting from a baseline of 80% and 60% for PFMA and MFMA respectively o Increased visibility of AG leadership ü To engage the auditee leadership on the audit focus, process and outcomes A High Level Overview of the Budget and Strategic Plan of the Auditor General April 2009 – March 2012 Page 4
Regularity audits q The standard of our quality will be measured using the International Regulatory Body of Auditors (IRBA) quality assessment tool q Targeting 75% of our audit reports to rated by IRBA to be of excellent quality by 2009 / 10 and then increase the quality rating by 1% annually A High Level Overview of the Budget and Strategic Plan of the Auditor General April 2009 – March 2012 Page 5
Performance auditing q Performance auditing focuses on evaluating whether auditees have utilised resources economically, efficiently and effectively. q Key sectors for transversal performance auditing are: ü Education ü Consultants ü Public enterprises Initiatives q Centralised management of performance auditing q Research on transversal performance audit themes q Transversal audit of provincial & municipal infrastructure q International peer review A High Level Overview of the Budget and Strategic Plan of the Auditor General April 2009 – March 2012 Page 6
Auditing of performance information q The Ao. PI is carried out in terms sections 20(2)(c) and 28(1)( c) of the PAA q The AG adopted a phased-in approach for compliance with relevant sections until such time that performance management and reporting framework have been legislated and the audit environment is mature q Over and above a financial audit opinion, audit of performance information focuses on these areas: ü Root cause analysis which will lead to a separate opinion on internal controls ü Auditing of information which should lead to a separate opinion on performance information ü An opinion on whether an auditee complies with laws and regulations q Track compliance of Ao. PI milestones in the audit process to ensure that there is 100% compliance with pre-determined audit-coverage milestones as defined in the annual Ao. PI plan A High Level Overview of the Budget and Strategic Plan of the Auditor General April 2009 – March 2012 Page 7
Funding model Assumptions q Remove capping on tariff model q Apply mark-up factor of 2. 2 on direct cost q No limit on the top of the band q Tarriffs are calculated on the same principles as SAICA rates q Increase the allowable surplus to 6% A High Level Overview of the Budget and Strategic Plan of the Auditor General April 2009 – March 2012 Page 8
Funding model initiatives • Debt collection ü Ring fencing of certain debtors ensures that long outstanding debts do not affect collection of debt. These debts are dealt with separately without being written off. ü E-billing tool to assist in speeding up billing and collection from auditees • Debtors to comply with the following payment terms: ü Max. 90 days for Local Govt ü Max. 30 days for National & Provincial Govt. • AG to comply with creditor payment terms for 80% of our creditors (baseline) and increasing the number by 5% annually A High Level Overview of the Budget and Strategic Plan of the Auditor General April 2009 – March 2012 Page 9
Initiatives to address vacancies ü Reposition the Trainee accountants scheme o Reduce the number of trainees so as to improve the supervisory structures that are required and thus increase the current pass rate to be above the national average o Split the AG entry-level into two groups • Trainees - people who want to qualify as professionals and have the ability to do so • Clerks - people who may not be interested in qualifying or do not have the ability to do so o Improve retention of trainees who completed their training contracts by 10% annually ü Corporate Social Investment o Adoption of 15 high schools o Continued participation in the Thuthuka schools project o AG to form partnerships with The Dept of Finance in the regions to sponsor undergraduate bursaries o AG office to sponsor post graduate bursaries o AG to sponsor TA contracts to serve articles A High Level Overview of the Budget and Strategic Plan of the Auditor General April 2009 – March 2012 Page 10
Initiatives to address vacancies ü As of the end of August 2008 we had 528 new vacancies of which 110 are Assistant Managers and 120 are Audit Managers ü Increase retention of Assistant and Audit Managers by 20% and 25% in 2009/10 from a baseline of 15% and 29% respectively. After that an annual increase of 5% ü Secondment of Audit Managers from Deloitte/India ü On-line recruitment tool to source talent – online application and response tracking ü Filling of vacancies through promotions and offering incentives for candidates relocating to outlying provinces ü More targeted recruitment for candidates with other professional qualifications (RGA, ACCA, CISA and CIMA) ü Leveraging acting appointment before permanent vacancies ü Marketing and branding strategies at tertiary institutions and the media ü Building relationships with university academics and Industry Associations (SAGRA, AWCA, ABASA) to facilitate the sourcing of candidates ü Incentives for employees for referrals ü Utilising specific search engines for recruitment ü More streamlined recruitment process with adequate resourcing A High Level Overview of the Budget and Strategic Plan of the Auditor General April 2009 – March 2012 Page 11
Leadership effectiveness Effective leadership is the only way to elevate and sustain organisational performance to a level of excellence Initiatives q The AG roles and responsibilities framework to enhance the level of accountability has been developed and agreed. q The competency framework for critical competencies has been designed and approved – to be utilised for recruitment and developmental purposes as part of AG leadership development initiatives q Rollout of our desired values and behaviors q Leadership programme covers: ü Communicating Leader training ü Executive coaching for CEs and BEs ü Leadership programme for managers q Repositioning Performance management system q Culture index will be increased to 25% (2013 -14) with a baseline of 14% that was taken in 2006 A High Level Overview of the Budget and Strategic Plan of the Auditor General April 2009 – March 2012 Page 12
Governance & risk management q Section 43 of the PAA requires that the DAG establish and maintain a system of risk management & quality control q Initiatives ü Reengineering of prioritised ICT, Human resources and Finance processes to be at level 4 of the Capability Maturity Level by 2011 -12 ü Development of enterprise-wide risk management framework. ü Implementation of balanced scorecard tool for data integrity & quality ü Encrypted notebooks to mitigate security risk to all information ü Revamping of CSA tool for robust internal control This will ensure that the AG ü Leads by example in the Public sector ü Achieves and maintains unqualified audit reports A High Level Overview of the Budget and Strategic Plan of the Auditor General April 2009 – March 2012 Page 13
Reputation The identified key reputation strategic areas will have the following impact: q Stakeholders understand the role and relevant contribution of AG q Unqualified audit reports q Audit reports are simple and relevant q Reports are easy to read and are understandable q Effective implementation of audit recommendations q The AG is adequately professionalised through the Trainee Accountant Scheme q Meaningful contribution of audit professionals to the public sector q AG is independent and financially sustainable q All sources of risk are identified and mitigated Measurement will be % improvement on the overall reputation index. The reputation index target in in five years is 25% (2013 -14) with a baseline of 19% that was determined in 2006 A High Level Overview of the Budget and Strategic Plan of the Auditor General April 2009 – March 2012 Page 14
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