REPORT ON
PERFORMANCE
STRATEGIC GOAL 1: VALUE ADDING AUDITING (V1)
We account to the National Assembly by tabling our annual report, financial statements and the audit report on those financial statements in Parliament. This requirement is governed by sub-section 10(1) of the PAA.
OUR AUDIT OF GOVERNMENT’S PANDEMIC RELIEF SPENDING
The South African government’s approach to the pandemic and national lockdown included a multipronged fiscal package, which expanded during the year to mitigate the lockdown extension and its effects on the country’s citizens and economy.
Our status as a supreme audit institution perfectly positioned us to play an independent role in assessing the risks to the programmes launched and in proactively detecting and exposing practices that could ultimately result in wasting public money.
AUDIT OUTCOMES OF THE 2020-21 AUDIT
Despite the additional audit work related to the real-time audits, we maintained the same level of annual audits. We achieved this by optimising our audit portfolios, and with the incredible dedication of our staff. Overall, audit outcomes improved, with 66 (16%) auditees receiving better results and 35 (8%) regressing. Across national and provincial government, we cannot yet see the progressive and sustainable improvements required to prevent accountability failures and deal with them appropriately and consistently. We also do not see the fundamentals strengthened to enable strong financial management disciplines across all auditees.
ENHANCING OUR AUDIT PORTFOLIO
Developing capacity in the banking and financial services sector. Taking over section 4(3) audits. Agility of our audit methodology. Innovative ways to conduct audits using technology.
CONTINUOUSLY AND SUSTAINABLY IMPROVE THE QUALITY OF OUR AUDITS
Given our disappointing quality control results over the two previous performance years, we committed to an audit quality improvement action plan that we continued to implement during the performance year.
Although these activities were hampered by our need to reprioritise our internal initiatives to respond to the national and global environment, we were able to turn the tide on noncompliance with audit standards. This year, we subjected 58 audit files to a post-issuance quality review and obtained an 81% compliance rate with quality standards against a target range of 80% to 90%.
We also supported new and acting engagement managers, and managers that had previously received a non-comply rating. The support plan included compulsory pre-issuance reviews, audit report consistency reviews, business executive support, coaching or peer reviews and a coaching support programme that included compulsory sessions offered by an accredited coach.
STRATEGIC GOAL 2: VISIBILITY FOR IMPACT (V2)
Our mission is to strengthen South Africa’s democracy through auditing that enables oversight, accountability and governance in the public sector. Engaging with stakeholders allows us to build professional relationships that enable and influence the public sector to build strong financial and performance management systems, and to use public funds as intended for the benefit of the people of South Africa.
OUR APPROACH TO STAKEHOLDER MANAGEMENT
Analyse stakeholder needs. Develop specific action plans for each stakeholder group within the stakeholder categories. Engage with stakeholders and monitor the impact.
CONSTITUTIONAL
STAKEHOLDERS
At the start of each annual cycle we customise our visibility programmes to ensure that our engagements achieve their desired impact and return on investment by convincing stakeholders to act. In these interactions, we emphasised the lack of preventative controls in the government’s financial system, the lapse in financial management and the implications of our
enhanced mandate.
We also focused on selected auditees that disbursed covid-19 funding and acknowledged the improvements made. We prioritised 292 constitutional stakeholders for 524 interactions to help influence change, improve or maintain strong financial management systems, and implement corrective action where necessary. However, we exceeded our planned interactions by holding 1 023 interactions with these stakeholders for the year. This was in some part driven by engagements during our real-time audits.
NON-CONSTITUTIONAL STAKEHOLDERS
We prioritised 292 constitutional stakeholders for 524 interactions to help influence change, improve or maintain strong financial management systems, and implement corrective action where necessary. However, we exceeded our planned interactions by holding 1 023 interactions with these stakeholders for the year. This was in some part driven by engagements during our real-time audits.
OUR CITIZEN ENGAGEMENT STRATEGY
Enhanced citizen engagement continues to be viewed as essential internationally among supreme audit institutions. The outbreak of the pandemic and subsequent national lockdowns initially disrupted how organisations disseminated messages through conferences and other face-to-face engagements.
INTERNATIONAL THOUGHT LEADERSHIP
We continued to play a key leadership role within the global community of 195 supreme audit institutions as the chair of the CBC, which is one of Intosai’s four strategic goals. The CBC supports SAIs to maximise their value and benefits to society by developing their professional capacities.
STRATEGIC GOAL 3: VIABILITY (V3)
The 2020-21 financial year was very challenging. Given the fundamental business and operational changes in response to the pandemic, the budget had to be revised and our revised forecast had to consider the current realities. In addition, we had to make a lot of calculated sacrifices to reduce our deficit.
FINANCIAL PERFORMANCE
The impact is clear in the R293 million deficit at the end of the year, compared to the surplus of R190 million reported in 2019-20. This deficit would have been worse without the additional income of R58 million from our investments, and the National Treasury allocation of R44 million to assist with funding our enhanced mandate.
PEOPLE VIABILITY
On 31 March 2021, we had 3 703 staff (3 667 in 2019-20), including trainee auditors and short-term contract employees. This was an increase of 36 (0,98%) employees from last year. We continued our moratorium on hiring except in cases where specialist skills were required to fulfil our mandate.
TRAINEE AUDITOR SCHEME
Our business model and talent pipeline rely on our ability to attract great talent into our trainee auditor scheme. We are constantly looking at how we can use our graduate recruitment efforts and the brand communication strategy to make the AGSA brand more attractive.
ORGANISATIONAL DEVELOPMENT
Our culture journey gained significant momentum during 2020-21.
SYSTEMS AND TOOLS
The covid-19 outbreak meant that we had to develop a response plan to ensure continuity of operations. Our ICT response was to enable staff to work from home and access auditees’ systems and data remotely. This also meant reprioritising our ICT initiatives and expenditure.
STRATEGIC GOAL 4: VISION AND VALUES DRIVEN (V4)
We remain firmly committed to transformation in South Africa and take pride in achieving a broad-based black economic empowerment (B-BBEE) level 1 contributor status for three consecutive years. However, the pandemic has also had an impact on our organisation, which made it necessary to reduce our spending to ensure our financial sustainability.
B-BBEE SCORECARD PERFORMANCE PER ELEMENT
The ongoing moratorium on hiring meant that we were unable to meet the EAP targets for the coloured population. Business units that could make appointments made a deliberate effort to appoint according to the EAP and B-BBEE targets.
DEMONSTRATE CLEAN ADMINISTRATION
In all we do as an organisation, we ensure that we exhibit high levels of accountability, governance and responsibility.
CULTIVATE AN ENVIRONMENT OF ETHICAL BEHAVIOUR
The ethical principles outlined in our ethics policy are aligned to the IESBA code and ISSAI 30 of the Intosai code in setting the tone for our ethical conduct.
