13 October 2015
Briefing to the portfolio committee on audit outcomes of
Arts and Culture portfolio for the 2014-15 financial year
Reputation promise/mission
The Auditor-General of South Africa has a constitutional mandate and,
as the Supreme Audit Institution (SAI) of South Africa, exists to strengthen our
country’s democracy by enabling oversight, accountability and governance in the
public sector through auditing, thereby building public confidence.
Purpose of the presentation
• To provide the portfolio committee with applicable information and
guidance on the Arts and Culture portfolio’s 2014-15 audit outcomes so
that they, the committee, can ensure effective oversight.
• Annually oversight committees set aside time to focus on assessing the
performance of departments. On completion of the process, portfolio
committees are required to develop department-specific reports, namely
budgetary review and recommendations reports (BRRR) which express the
committee`s view on the department’s budget for recommendation to the
National Treasury ahead of the following year`s budget period.
• Our role as the AGSA is to reflect on the audit work performed to assist the
portfolio committee in its oversight role in assessing the performance of the
departments taking into consideration the objective of the committee to
produce a BRRR.
The scope of AGSA audits

X
Provide assurance that AFS are free
from misstatements that will affect
users
Do not provide assurance on the
appropriateness of the departmental
budgets
Report on usefulness and reliability of
the information in the annual
performance report
Do not provide commentary on
service delivery
Report on material non-compliance
with relevant key legislations
Do not report on ALL legislations –
only key selected requirements from
relevant legislations are audited
Identifying the key internal control
deficiencies to be addressed
We assess the risk of fraud, but we are
not responsible for –
• Fraud identification
• Fraud prevention
Content
1. Overall audit outcomes for Arts and Culture portfolio
6 - 10
2. Auditor-General’s six key focus areas
11- 19
3. Irregular and fruitless and wasteful expenditure
20 - 24
4. Combined assurance and assessment of assurance providers
25 - 26
5. Root causes and recommendations
27
6. Minister’s commitments to address root causes
28
1. Overall audit outcomes for Arts and Culture portfolio
Unqualified no
findings
Unqualified with
findings
Qualified with
findings
Adverse with
findings
Disclaimer with
findings
Audit outstanding
27
auditees
27
auditees
27
auditees
6
1.1 Outcomes per auditee (excluding clean audits)
Auditee
Annual Financial
statements
Department of Arts and Culture
Audit of Performance
information
X
Compliance
X
Luthuli Museum
X
Market Theatre Foundation
X
National Heritage Council
X
X
SA Library for Blind
X
SA Resource Heritage Agency
X
Ditsong Museum Of SA
X
X
X
Iziko Museum
X
X
KZN Museum
X
X
Msunduzi /Voortrekker Museum
X
X
X
National Library of SA
X
X
X
Nelson Mandela National
Museum
X
X
South African State Theatre
X
X
7
1.1 Outcomes per auditee (excluding clean audits)
National English Literary
Museum
X
X
William Humphreys Art
Gallery
X
X
Windybrow Theatre
X
X
Pan South African
Language Board
X
Performing Arts Council of
Free State
X
X
Audit not completed
8
1.2 Common qualification areas
Auditee
Heritage
assets
Irregular
expenditure
Ditsong Museums of SA
X
Iziko Museums of Cape
Town
X
Kwa-Zulu Natal Museum
X
Msunduzi/Voortrekker
Museum
X
National English Literary
Museum
X
X
National Library of SA
X
X
X
Nelson Mandela National
Museum
X
X
X
Pan South African
Language Board
X
Property
plant and
equipment
Other long
term
liabilities
Payables
Contingencie
s
X
X
X
X
X
9
1.2 Common qualification areas
Auditee
Heritage
assets
Irregular
expenditure
South African State
Theatre
William Humphreys
Art Gallery
Windybrow Theatre
Property
plant and
equipment
Other long term
liabilities
Payables
Contingencies
X
X
X
10
2. Auditor-General’s six key focus areas
Quality of submitted
financial statements
Quality of submitted
performance reports
Compliance with
legislation
Good
Financial health
Human resource
management
Information
technology
Concerning
Intervention
required
Improvement
Stagnant or
limited
progress
Regressed
11
2.1 Quality of submitted financial statements
Outcome
after corrections
2014-15
Outcome if
NOT corrected
2 auditees (DAC and SAHRA)
Avoided qualifications
by correcting material
misstatements during
audit process
2013-14
Outcome if
NOT corrected
Outcome
after corrections
6 auditees
Financially
unqualified
with/without
findings
Financially
qualified
(qualified/
disclaimed with
findings)
12
2.2 Quality of annual performance reports
Annual performance reports of 74% were reliable and useful
2014-15
PFMA
compared with 56% in the previous year
With no findings
With findings
Outstanding audit
Usefulness
Reliability
Improved
Stagnant or
little
progress
Regressed
1
Auditee did not prepare annual performance
report
All auditees that submitted information, did so in time
for audit
13
2.2.1 Usefulness and Reliability of Annual Performance
Reports
Auditee
Programmes
Department of Arts and
Culture
Programme 3 : Arts, culture
and development
Programme 4 :Heritage
Preservation and promotion
Ditsong Museums of SA
Not Usefulness
Not Reliable
N/A
X
Programme 2 : Business
development
X
X
Msunduzi /Voortrekker
Museum
Objective 1 :Administration
Objective 2 : Business
development
Objective 3 : Public
engagements
X
N/A
National Heritage Council of
SA
Programme 2 : Heritage
Promotions
X
N/A
National Library of SA
Programme 2 : Business
Development
X
X
Programme 3: Community
engagements
X
N/A
Objective 2 : Deliver language
services and deliverables
X
X
Pan South African Language
Board
14
2.3 Most auditees did not comply with legislation
in the following areas
Quality of annual
financial statements
submitted
Prevention of unauthorised,
irregular and/ or fruitless and
wasteful expenditure
2014-15
PFMA
Management of
procurement and or
contracts
Good
Concerning
Intervention
required
Management of
strategic planning
and performance
Human resource &
consequence
management
Internal audit &
Audit committee
Improvement
Stagnant or
limited
progress
Regressed
15
2.3.1 Non-compliance areas per auditee
AFS
Auditee
Irregular
expenditur
e
Department of Arts
and Culture
X
X
Ditsong Museums
of SA
X
X
Market Theatre
Foundation
Procureme
nt
X
Human
Resource
Manageme
nt
Internal
audit and
Audit com
X
X
X
KZN Museum
X
Iziko Museums of
Cape Town
X
National Heritage
Council
X
X
National Library of
SA
X
X
X
Nelson Mandela
National Museum
X
X
X
Luthuli Museum
Pan South African
Language Board
Management
of Strategic
Planning
X
X
Concerning
X
X
X
Legends:
In progress
X
16
2.3.1 Non-compliance areas per auditee
AFS
Irregular
expendit
ure
Auditee
Procur
ement
South African
State Theatre
X
X
X
National English
Literary Museum
X
X
X
SA Heritage
Resource Agency
X
Msunduzi/Voortre
kker Museum
X
X
X
William
Humphreys Art
Gallery
X
Manageme
nt of
Strategic
Planning
Human
Resource
Manageme
nt
Internal audit
and Audit
com
X
X
Legends:
SA Library for
the blind
X
Windybrow
Theatre
X
12
11
X
8
3
X
1
Concerning
In progress
6
17
2.4 Findings on Information technology
Auditee
IT governance
Security
management
User access
manual
IT security
continuity
Nelson Mandela
Museum
X
X
X
X
DAC
X
X
X
X
Market Theatre
Foundation
X
Freedom Park
X
National Library of
South Africa
X
X
X
Ditsong: Museums of
South Africa
X
X
X
Windybrow Theatre
X
National Museum
X
PACOFS
X
X
X
X
War Museum of the
Boer Republics
X
X
X
X
Luthuli Museum
X
X
X
X
Legends:
X
X
X
Concerning
In progress
18
2.4 Finding on information technology
Auditee
IT
governance
Security
management
User access
manual
IT security
continuity
Legends:
Msunduzi/Voortrekker
Museum
X
X
X
X
Concerning
Pan SA Language Board
X
X
X
X
In progress
19
3. UIFW expenditure definitions
Unauthorised
expenditure
Expenditure not in
accordance with the
budget vote
Irregular
expenditure
Expenditure incurred in
contravention of key
legislation
Fruitless and
wasteful
expenditure
Expenditure that should not have
been incurred (incurred in vain,
could have been avoided or was
not value for money)
20
3.1 Irregular expenditure per portfolio
Auditee
1
2
3
4
5
6
7
Department of Arts &
Culture
ArtsCape
Ditsong Museums of SA
Market Theatre Foundation
National Heritage Council
National Library of South
Africa
8
Pan SA Language Board
State Theatre
9
Windybrow Theatre
10
National Museum:
Bloemfontein
Movement
Irregular expenditure
Amount
R
2015
120,641,000
2,383,145
Amount
R
2014
74,300,000
0
821,077
280,000
604,222
1,200,000
6,471,000
2,600,000
12,900,628
267,130
8,662,364
28,700,000
16,139,127
67,700,000
1,797,182
31,000,000
556,000
1,300,000
Legends:
Increase in
incurred
expenditure
Decrease in
incurred
expenditure
21
3.1 Irregular expenditure per portfolio
Auditee
11
Nelson Mandela Museum:
Mthatha
12
Robben Island Museum
13
14
The National English
Literary Museum
PACOFS
18
National Arts Council of
South Africa
Msunduzi / Voortrekker
Museum
Williams Humphrey Art
Gallery
The Afrikaanse Taal
Museum
19
South Africa Heritage
Resources Agency
15
16
17
20
Freedom Park
TOTAL
Movement
Irregular expenditure
Amount
R
2015
Amount
R
2014
309,365
300,000
0
30,000
271,916
0
0
4,900,000
1,258,590
2,500,000
1,102,000
650,000
Legends:
0
550,000
63,693
0
4,344,067
8,400,000
399,000
215,155
178,724,376
403,616,661
Increase in
incurred
expenditure
Decrease in
incurred
expenditure
22
3.2 Fruitless and wasteful expenditure per portfolio
Fruitless and Wasteful expenditure
Movement
Auditee
1
2
3
4
5
6
7
8
9
Amount
R
2015
Amount
R
2014
Department of Arts & Culture
330,000
5,600,000
Ditsong Museums of SA
207,703
20,000
National Heritage Council
954,000
230,000
58,331
1,249,384
698,862
1,500,000
20,024
60,000
Windybrow Theatre
0
20,000
SA Library for the Blind
0
10,000
11,000
1,000
National Library of South Africa
Pan SA Language Board
State Theatre
National Museum: Bloemfontein
Legends:
Increase in
incurred
expenditure
Decrease in
incurred
expenditure
23
3.2 Fruitless and wasteful expenditure per portfolio
Auditee
10
11
Nelson Mandela Museum:
Mthatha
Performing Arts Centre of the
Free State
Robben Island Museum
Movement
Fruitless and wasteful expenditure
Amount
R
2015
Amount
R
2014
24,342
0
10,000
460,241
43,248
116,846
20,000
Die Afrikaanse Taal Museum
3,099
0
15
Iziko Museums of South
Africa
4,421
0
178,059
260,000
16
South Africa Heritage
Resources Agency
17
Freedom Park
669,061
220,000
3,735,989
9,243,632
12
13
National Arts Council of
South Africa
14
Total
Legends:
Increase in
incurred
expenditure
Decrease in
incurred
expenditure
24
4. Combined assurance – complimentary mandate
Management assurance
First level of assurance
Senior
management
Accounting
officers/
authority
Executive
authority
Required assurance levels
Extensive
Extensive
Extensive
Management’s assurance role
Oversight assurance
Second level of assurance
Coordinating /
Monitoring
institutions
Internal
audit
Audit
committee
Required assurance levels
Extensive
Extensive
Extensive
Oversight’s assurance role
• Senior management – take
• National Treasury/ DPSA – monitor
immediate action to address specific
compliance with laws and regulations
recommendations and adhere to
and enforce appropriate action
financial management and internal
• Internal audit – follow up on
control systems
management’s actions to address
• Accounting officers/ authority –
specific recommendations and
hold officials accountable on
conduct own audits on the key
implementation of internal controls
focus areas in the internal control
and report progress quarterly and
environment and report on quarterly
annually
progress
• Executive authority – monitor the
• Audit committee – monitor risks and
progress of performance and enforce
the implementation of commitments
accountability and consequences
on corrective action made by
management as well as quarterly
progress on the action plans
Independent assurance
Third level of assurance
Oversight
(portfolio
committees /
councils)
Public
accounts
committee
National
Assembly
Required assurance levels
Extensive
Extensive
Extensive
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
25
4.1 Assessment of assurance providers for portfolio
Improvement
Provides
assurance
Provides some
assurance
Provides limited/
no assurance
Vacancy
Not
established/
evaluated
Stagnant or
limited
progress
Regressed
26
5. Root causes and recommendations
Root causes
Recommendation
Lack of consequences for
poor performance and
transgressions
Investigate and take disciplinary steps against non-performance and noncompliance with the prescribed laws and regulations including those relating to
supply chain management.
Slow response by
management
Adequate action plans should be developed and consistently monitored by senior
management and those charged with governance to address significant
deficiencies identified by internal and external audit.
Implement adequate daily and monthly internal controls which are continuously
reviewed and supervised
Key officials lack
appropriate
competencies
Provide relevant training to existing key officials and recruit adequately skilled
personnel for all key positions.
27
6. Status of Minister’s commitments to address toot causes
To address the challenges faced by the portfolio to ensure achievement of clean audit and
take internal measures to deal with the reasons that lead to the negative audit outcome
throughout the portfolio
Minister will strengthen shareholders compact and get assurance on skills and irregular
expenditure
To meet the AGSA more regularly, at least quarterly
To conduct investigation on irregular expenditure at DAC that resulted in a qualified
audit opinion in the 2013/14 financial year.
Filling of the DDG: Corporate Service and CFO post at DAC
Implemented
In progress
Not implemented
New
28
Questions