CHAIRPERSON FOR FINANCE COMMITTES
AG’S ACTION PLAN
DATE: 29 MAY 2012
08/04/2015
1
PURPOSE
• Role of council and audit committee in the
action plan
• To provide the status of municipalities in
terms of implementation of the action plan
2
ACTION PLAN
• Audit committee will have to check the progress on
the implementation of the action plan .
• The committee is responsible for providing advice/
recommendations to Council
• Based on the issues raised by AG, finance committee
can monitor or play an oversight role by analysing
reports (e.g. sec 71, quarterly reports, etc) tabled in
Council for the current financial year
• Chairperson of finance can request a report on the
progress on implementation of AG’s Action plan
3
Action Plans to Address Findings
Municipality
Number
of
findings
No of
No of
findings
findings
addressed outstanding
Percentage
addressed
Capricorn
37
28
9
76%
Polokwane
73
28
45
38%
Blouberg
62
8
54
13%
Aganang
81
3
78
4%
Lepelle-Nkumpi
Action plan not ready as the AGSA is currently finalising the
management letter and audit report with the municipality
Molemole
69
44
25
64%
Mopani
27
11
16
41%
Ba-Phalaborwa
46
Tzaneen
100
Maruleng
24
11
13
46%
Giyani
85
Letaba
40
24
16
60%
4
Action Plans to Address Findings
Municipality
Number
of
findings
No of
findings
addressed
No of findings Percenta
outstanding
ge
addresse
d
Waterberg
10
Mogalakwena
20
Mookgophong
107
24
83
22%
Modimolle
60
Bela Bela
102
Lephalale
62
32
27
52%
Thabazimbi
57
Sekhukhune
85
Fetakgomo
30
30
0
100%
Makhuduthamaga
86
14
72
16%
Elias Motsoaledi
65
12
53
18%
Ephraim Mogale
31
8
23
26%
Tubatse
5
Action Plans to Address Findings
Municipalit
y
Number of
findings
No of
findings
addressed
No of findings
outstanding
Percentag
e
addressed
Vhembe
45
27
18
60%
Thulamela
5
3
2
60%
Musina
Action plan not
developed
Makhado
56
26
30
46%
Mutale
PT developed a Provincial standardised action plan to be used by
municipalities.
28 municipalities developed action plans which have been reviewed by
the Audit Committee.
Of 28 submitted action plans 17 have reported progress
6
Challenges on implementation of the
Action Plans
• Audit steering committees not functional
throughout the year
• Internal Audits not reviewing the implementation
of audit action plans timeously
• Root causes not properly identified
• Management not attending all audit steering
committee meetings
• High vacancy rate / Inappropriate appointment
• Lack of technical skills ( GRAP Standards)
7
Audit Outcomes per District
Districts
Outcome
2010-2011
Mopani District
1 Unqualified
2 Qualifications
2 Disclaimers
1 Adverse
4 Qualifications
2 Disclaimers
Vhembe
Capricorn
1 Adverse
3 Qualifications
3 Late AFS
Outcome
2009-2010
Comparison
3 Unqualified
2 Qualifications
1 Disclaimer
Regressed
3 Unqualified
2 Qualifications
1 Disclaimer
3 Disclaimers
4 Qualifications
Regressed
Regressed
8
Audit Outcomes per District
Municipality
Outcome
2010-2011
Outcome
2009-2010
Comparison
Sekhukhune
1 Unqualified
2 Qualifications
2 Disclaimers
1 Late AFS
1 Unqualified
2 Qualifications
3 Disclaimers
Unchanged
Waterberg
3 Unqualified
2 Qualifications
1 Disclaimer
1 Adverse
3 Unqualified
3 Qualifications
1 Disclaimer
Regressed
9
Concerns and Challenges
1. Lack of timely submission of requested information
2. Lack of supporting documentation to support balances
3. Availability of key personnel such as the following
– CFOs
– Section 54, 56 and 57 managers
– Finance personnel
– Technical Services personnel
– Human resource personnel
4. Lack of knowledge and understanding of accounting standards
5. Expectations of the auditors to identify and correct
misstatements
6. High reliance on consultants to do work on behalf of municipal
employees
10
Concerns and Challenges
7. Lack of monitoring and review of work done by
consultants
8. Lack of monitoring and review by managers and heads of
departments
9. Action plans on prior year findings drawn up for
compliance purposes, recommendations not
implemented
10. No action plans on IT findings and it doesn’t seem to be
taken seriously, because there is a perception that it does
not affect financials
11. MFMA Circular 50 and presentations made to CFOs on
ideal audit file not adhered to
12. Commitments made by management on addressing
control weaknesses as per key controls not done
11
Concerns and Challenges
13. Management does not see the value of a fully fledged
internal audit department
14. Numerous non compliances with SCM policy and PPP
15. Reporting on pre-determined objectives not taken
seriously
16. Lack of knowledge and understanding on how to report
on pre-determined objectives
17. Non adherence to SLA’s with regard to water related
services
18. Lack of constant monitoring and ensuring the correctness
of transferred balances with regard to water related
transactions
19. Financial systems that are unreliable, differences
between trial balances and AFS
12
Thank you
13