Portfolio Committee on Public Service and Administration
and Performance Monitoring and evaluation
Review of 2015/16 Annual performance plans
Presenters: Carl Wessels – Senior Manager AGSA
Trudie Botha – Senior Manager AGSA
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.
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Topics to discuss
1. Background
2. Legislative requirements and framework for performance management
and reporting
3. Audit process
4. Roles and responsibilities
5. Interim review of 2015/16 Annual Performance Plans
6. Oversight responsibility of Portfolio Committee
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Background
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Audits performed by the AGSA
Annual mandatory audits
• Financial statements
• Report on predetermined objectives
• Compliance with laws and regulations
Discretionary audits
• Performance audits, e.g. infrastructure
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Clean administration – from annual audits
Unqualified financial
statements
No findings on
predetermined objectives
No findings on compliance
with laws and regulations
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Audit of predetermined objectives defined
Annual audit of reported actual performance
against predetermined objectives, indicators
and targets as contained in the annual
performance report
It is an integral part of the annual regularity audit
process, confirming –
• compliance with related laws and regulations
• usefulness of performance information
• reliability of performance reporting
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Auditing requirements
Sections 20(2)(c) and 28(1)(c) of the Public Audit Act (PAA)
require that:
An audit report must reflect an opinion or conclusion on
the performance of the auditee against predetermined
objectives
Applicable to all spheres of government
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Legislative requirements and
framework for performance
management and reporting
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Legislative requirements and framework
Public Finance Management Act , 1999 (Act No. 1 of 1999) (PFMA)
Treasury Regulations issued in terms of the PFMA, 2002
Guidelines, instruction notes issued by National Treasury
National Treasury Framework for managing programme performance
information (issued by the National Treasury in May 2007)
National Treasury Framework for strategic plans and annual performance plans
(issued by the National Treasury in August 2010)
This represents the performance management and reporting framework against
which the performance information should be managed and reported.
The principles and requirements set out in the framework are used as a basis for the
audit.
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Performance planning, budgeting and reporting cycle
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Strategic planning and budgeting requirements
Treasury Regulations issued in terms of the PFMA
Chapter 5: Strategic planning requirements for departments,
trading entities and constitutional institutions
Chapter 29: Corporate planning requirements for schedule 2, 3B
and 3D public entities
Chapter 30: Strategic planning requirements for schedule 3A and
3C public entities
Public Service Regulations, part III B.1(a), (g): Only applicable to
departments
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Reporting requirements
PFMA
Section 40(3)(a): Applicable to
departments, constitutional
institutions and trading entities.
Section 55(2)(a): Applicable to
public entities.
Treasury Regulations issued in
terms of the PFMA
Chapter 18: Reporting
requirements for departments,
trading entities and constitutional
institutions
Chapter 28: Reporting
requirements for all public
entities
PSR, part III B.1(f)(i)-(iii) & J.1,
J.3: Monitoring and management
of performance information for
departments
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Annual performance report submission
All departments, constitutional institutions, trading entities and public
entities must submit the annual performance report for audit purposes
with the annual financial statements (by 31 May) to enable the auditors to
perform the necessary final audit procedures.
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Key performance accountability documents
1.
Strategic/Corpora
te plan
6. Annual
performance
report
• Consistent structures to
facilitate understanding
and accountability
• Enable linkage between
plans and actual
performance
5.
Performance
agreements
2. Annual
performance
plan (APP)
3. Budget
4. Quarterly
performance
reports
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Good performance indicators should be:
Reliable
Well defined
Must be accurate enough for its
intended use and respond to
changes
Clear, unambiguous definition so that
data will be collected consistently and
will be easy to understand and use
Verifiable
Cost-effective
Possible to validate the processes
and systems
Usefulness of the indicator must
justify the cost of collecting the data
Appropriate
Relevant
Avoid unintended consequences
and encourage service delivery
improvements
Must relate logically and directly to an
aspect of the institution's mandate
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SMART performance targets
S
PECIFIC
M
EASURABLE
A
CHIEVABLE
Realistic given existing capacity
ELEVANT
Required performance is linked to
achievement of goal
R
T
IME BOUND
Nature and required level of
performance can be clearly identified
Required performance can be
measured
Time period/deadline for delivery is
specified
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Audit process
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AGSA strategy
2004-05 to 2008-09
 Phased-in approach
 Factual audit findings
reported in both
management and audit
reports
 No audit opinion in audit
reports
 Interaction with
stakeholders (NT,
Presidency, DPSA) to
determine and test audit
approach
 Inputs to drafting of NT
frameworks (FMPPI)
2009-10 to 2014-15
 Completed phased audit
approach
 Audit to the extent
necessary to express an
audit conclusion
 Audit conclusion in the
management report for all
departments, constitutional
institutions, trading entities
and public entities
 Audit reports contain
material audit findings – not
audit opinions
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Audit criteria
Main criteria
Sub-criteria
Compliance with regulatory
requirements
Applicable to performance
management and reporting
Usefulness
Presentation
Measurability
Relevance
Consistency
Validity
Reliability
Accuracy
Completeness
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Audit approach
1
Understand and test the design and implementation of the performance
management systems, processes and
relevant controls
2
Test the measurability, relevance, presentation and consistency of planned and
reported performance information
3
Conclude on the usefulness of the reported performance information for selected
programmes or objectives
4
Test the reported performance information against relevant
source documentation to verify the validity,
accuracy and completeness of reported performance information
5
Conclude on the reliability of the reported performance for
selected programmes or objectives
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Audit reporting – Management report
An audit conclusion will be expressed for ALL departments, constitutional
institutions, trading entities and public entities in the management report,
on the –
USEFULNESS of reported performance for selected
programmes or objectives
RELIABILITY of the reported performance for selected
programmes or objectives
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Audit reporting – Auditor’s report
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
Predetermined objectives
Usefulness of information
Material audit findings focusing on presentation, consistency, relevance and
measurability of reported performance information for selected
programmes or objectives
Reliability of information
Material audit findings focusing on reliability of reported performance
information for selected programmes or objectives
Compliance with laws and regulations
Compliance findings relevant to the performance management and
reporting
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Roles and responsibilities
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Roles and responsibilities:
FMPPI (chapter 5): Effective management of performance information requires a clear
understanding of different responsibilities as well as the structures and systems
involved in managing performance
Ministers/MECs
To ensure that
institutions under
their control set up
appropriate
performance
information systems
Accounting officer
or head of an
institution (assisted
by chief information
officer)
Accountable for
establishing and
maintaining the
systems to manage
performance
information
Line managers
Accountable for
establishing and
maintaining the
performance
information
processes and
systems within their
areas of responsibility
Other officials
Responsible for
capturing,
collating and
checking
performance
data relating to
their activities
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Understanding and monitoring of the accounting officer’s
mandate are key to improving internal control environment
Role of accounting officer
Robust financial and
performance management
systems
Effective, efficient and
transparent systems for
• financial and risk
management
• internal controls (under
control of audit
committee)
• procurement and
evaluation
Oversight and
accountability
Commitment and
ethical behaviour
• Effective, efficient, economical
and transparent use of
resources
• Prevention of unauthorised,
irregular and fruitless and
wasteful expenditure and, if
discovered, reporting to
treasury
• Manage and safeguard
assets and liabilities
• Take appropriate
disciplinary steps against
any official contravening
the PFMA
• Efficient and economic
management of available
working capital
The role of the accounting officer is critical to ensure:
timely, credible information
+ accountability +
transparency
+ service delivery
Chapter 5 of the Public Finance Management Act, 1999
Role of internal audit
The functions of internal audit relevant to performance information and
management should typically include the following:
 Monitoring of internal controls relating to performance information
processes
 Examination of the usefulness and reliability of performance
information
 Review of critical performance management activities
 Review of compliance with laws and regulations relevant to
performance planning, management and reporting
 Risk management
Also refer to Treasury Regulations (TR) 3.2.11 - 3.2.12 (applicable to
departments) and TR 27.2.10 -27.2.11 (applicable to public entities)
for the responsibilities of the internal audit function
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Support oversight – 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
Interim review of 2015/16 Annual
Performance Plans
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AGSA review of 2015/16 Annual Performance Plan
Presentation
As required by FMPPI
Consistency
APP objectives,
indicators & targets =
Strategic plan objectives,
indicators & targets
Usefulness
Key performance
indicators
Well defined
Verifiable
Specific
Targets
Measurable
Time bound
Findings from the AGSA review of 2015/16 Annual
Performance Plan
Entity reviewed
Significant findings identified
Department of Public Service and
Administration
No significant findings identified
on usefulness
National School of Government
No significant findings identified
on usefulness
Public Service Commission
No significant findings identified
on usefulness
Department of Performance
Monitoring and Evaluation
No significant findings identified
on usefulness
National Youth Development Agency
No significant findings identified
on usefulness
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Oversight responsibility of Portfolio
Committee
32
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Oversight model
OVERSIGHT:
Parliament, provincial legislature or municipal council
Policy
development
•
Assess and adjust
Specify
performance
Strategic
Planning
indicators
INSTITUTION
Accountability
Monitor and take
corrective action
End-year
reporting
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Identify desired impacts
National department
Provincial department
Municipality
Public entity
Municipal entity
Implementation
and in-year
reporting
Operational
planning and
budgeting
Set targets
and allocate
resources
Oversight component - Portfolio committee mandate
Role of Portfolio Committees (Rule 201)
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1. Legislation
•consider, amend, approve or reject legislation (bills in its portfolio)
2. Budgets
• consider and approve budgets and monitor expenditure of the
Departments and entities reporting to them
3. Mandates
• consider progress reports (monitoring) from line-function departments, and
provincial and local government authorities and entities on their respective
mandates
4. Accountability
• ensure that all appropriate executive organs of state in its portfolio are held
accountable for their actions (oversight); and
5. Oversight
• conduct oversight over the executive authority and consult/liaise with any
other executive organ of state and make recommendations
Considerations for Portfolio Committees when dealing
with performance monitoring
APP aligns
with NDP
Adequate
resources
(human and
financial)
available to
achieve
APPs?
Portfolio Committee
should review the
annual achievement
against APP targets
Portfolio
Committee
should review
quarterly
progress
against the APP
targets
Portfolio
Committee
should track any
changes to the
APP
Ask ‘how’ the entities will
achieve the APPs
e.g.
Performance contracts/
monitoring
Are the
targets
realistic ?
SMART
AGSA’S aspirations for the Public Service
Robust
financial and
performance
management
systems
•
•
•
•
Transparent and stable reporting systems
Budgeting and planning processes
Focussed information management platforms
Strong internal audit capabilities
Oversight and
accountability
• Reporting to enable effective
oversight
• Applying consequences for
transgressions and poor
performance
Professionalism
Commitment
and ethical
behaviour by all
Competent and
value-adding
Auditor General
• Visible commitment by all players in
the public service
• Demonstrated impeccable ethical
behaviour and professionalism
Creating a
better and
dignified life
for the
citizens of
South Africa
through
timely
effective,
efficient
and
economical
SERVICE
DELIVERY
• Independent and relevant reporting by
the AG
• Value-adding input expressed by the
AG
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6
Questions
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