1. BRIEFING TO THE PORTFOLIO COMMITTEE ON THE DPSA’S RISK MANAGEMENT STRATEGY PRESENTATION TO THE PORTFOLIO COMMITTEE 12 MAY 2010 1

2. Outline 2  Mandate  Background  Purpose of the strategy  Key Aspects of the Strategy  Conclusion

3. Mandate 3 Section 38 (1)(a)(i) of the Public Finance Management Act states that:  the accounting officer for a department must ensure that the department has and maintains effective, efficient and transparent systems of financial and risk management and internal control. Treasury Regulations 3.2.1 also states that:  the accounting officer must ensure that the department has a risk management strategy, which must include a fraud prevention plan and that a risk assessment is conducted at least annually.

4. Background 4  The Department of Public Service and Administration has developed a Risk Management Strategy in line with the National Treasury Risk Management Framework.  This followed a consultative process with all dpsa management.  The strategy was endorsed by both the National Treasury as well as the department’s Audit Committee. The strategy was approved in November 2009. The dpsa Audit Committee and Executive Committee (which also serve as a Risk Management Committee) monitor the implementation of the risk management processes.

5. Purpose of the strategy 5  To ensure that significant risks are effectively managed.  To assist dpsa management to make informed decisions in improving business performance.  To promote good corporate governance.

6. Key aspects of the Strategy 6 The Strategy consists of the Risk Management Policy and the Fraud Prevention Plan. Risk Management Policy focus arrears:  Policy statement;  Management’s role, accountabilities and responsibilities in relation to risk management;  Governance structures established to support and oversee the risk management processes, e.g. Audit Committee;  Risk management methodologies and processes.

7. Key aspects of Strategy (cont..) 7 Fraud Prevention Plan focus arrears:  Fraud policy statement and response plan;  Code of Conduct and fraud awareness processes;  Systems and procedures for preventing and detecting fraud and corruption, management and reporting channels;  Protection of whistleblowers;  Investigations, disciplinary processes and redress. In developing the plan the following have been considered: Prevention and Combating of corrupt activities Act, Protected Disclosure Act, Public Sector Anti-corruption Strategy, etc.

8. Conclusion 8  The department has always in the past encouraged a culture of risk management through its decision making and this has never been prevented by the non-existence of the risk management policy (that was due to capacity challenges).