1. 7th IMFO AUDIT & RISK INDABA Are clean audits a solution to service delivery challenges faced by municipalities? 6 April 2016 Sharonne Adams - Business executive: Western Cape

2. 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.

3. Are clean audits a solution to service delivery challenges faced by municipalities?

4. Medium-term strategic frameworkGood governanceClean auditConclusion Topics for discussion

5. Medium-term strategic framework NDP MTSF = Government’s strategic plan for 2014 - 19 The MTSF sets out the actions government will take and targets to be achieved. The MTSF provides a framework for other plans of national, provincial and local government. Aim: To ensure policy coherence, alignment and coordination across government plans as well as alignment with budgeting processes. MTSF SECTOR PLANS, DEPARTMENTAL AND MUNICIPAL PLANS

6. MTSF 9 Sub-outcomes MTSF outcome 9 – Local government Outcome 9 – Local government Split into 5 sub- outcomes Sub-outcomes split into 32 actions (What has to happen?) Actions are broken down into 62 indicators and targets Sustainable & reliable access to basic services Sound financial & administrative management Cooperative governance & participatory democracy Promotion of social & economic development Local public employment programme

7. Main indicators – Outcome 9 1 - Basic services Roles and responsibilities Develop and assess norms and standards Maintenance and upgrading of infrastructure - projects Assess WSA and develop strategy Sectors departments to support municipalities’ plans Free basic services to indigent households 2 - Cooperative governance Inter- governmental structures Review district system Review financial sustainability of municipalities Investigate root cause of protests Ward committees Community report-back meetings 3 - Financial and administrative management Legislative requirements – Revenue, financial management and sustainability (support and monitor) (SCoA) Reform infrastructure grants Audit action plans LGMIM and FMCMM Senior manager appointment and capacity building Corruption 4 - Social and economic development Urban development agenda Enabling environment for economic development 5 - Community work programme Effective and efficient management and administration Build capacity of non-profit implementing agencies Establish 15 new sites Strategic partners Quality programme outputs Expand CWP sites at 234 municipalities

8. Characteristics of good governance Participation Account- ability Respon- siveness Rule of law Equitability and inclusiveness Characteristics of good governance Consensus orientated Efficiency and effectiveness Trans- parency Ineffective governance Undermines democracy and the rule of law Drives away investments Leads to loss of confidence and delegitimises government Increases costs and lowers quality of services due to non-compliance

9. Good governance as a constitutional requirement The Constitution of South Africa SCM guide CIDB Act PPPF Act MFMA Municipal SCM regulations Not legislation MFMA circulars Not legislation CIDB regulations Standard for uniformity CIDB practice notes PPPRs Municipal Systems Act Municipal Structures Act GRAP

10. Clean audits and rapid service delivery – Key elements of service delivery Key elements affecting service delivery Credibility and integrity of IDP and SDBIP Having the right people doing the right things Effective monitoring and evaluation of policies and legislation Sound policies, systems and processes Effective delegation to enable expedited decisions Developmental vs administrative attitude Effective governance structures Effective harmonious leadership

11. Clean audits and rapid service delivery Does a clean audit hamper service delivery? Are clean audits integral to good governance? Are clean audits and rapid service delivery in conflict? Municipalities cannot be selective regarding compliance with legislation and accounting frameworks Policies, systems and processes must be aligned to enable compliance with key legislation Effective planning, evaluation and monitoring ensure effective project implementation and service delivery NO YESNO Clean audit is a product of good governance Accountable leadership (administrative and political) and managers are critical Effective governance and oversight structures (internal audit, audit committees and MPACs) Sound risk management, policies and systems Clean audits serve as a catalyst to drive service delivery Obvious links between good financial management and service delivery (GRAP 17 requirements: Condition of assets for service delivery, maintenance/replacement ) Clean audit and rapid service delivery result from sound systems and good governance

12. Conclusion Focusing on the achievement of clean audits and good governance is part of the mandate, constitutional obligation and daily operations of local government Local government cannot be selective regarding the provisions of the Constitution it complies with Municipalities should maintain a developmental rather than administrative attitude to place emphasis on project implementation and service delivery Clean audits are, therefore, an enabler for rapid service delivery

13. How to get in touch with the AGSA Follow the AGSA on Twitter: @AuditorGen_SA www.agsa.co.za Auditor-General of South Africa