22 April 2015 A ROUTE TO CLEAN AUDIT 6 th Annual Audit And Risk Indaba

Ekurhuleni glance Contents Milestone Pillars of a clean audit Sustaining the clean audit Starting point

Ekurhuleni glance 3 BACKGROUND DATA million residential population million households 723,448 households refuse removed weekly 85% have flush toilets 82.2% access to electricity for lighting 2011 census BACKGROUND DATA 38% unemployment rate Operating income is R26.3 billion Capital investment program of R3.8 billion 2011 census 44% have deeds of ownership 77.4% reside in formal dwellings

Ekurhuleni glance 4 Delivering City ( ) efficient & cohesive municipal institution effective delivery of basic services functioning area management sound financial footing Well informed and resourced IDP

Starting point It was established after the amalgamation of 11 erstwhile administrations which used to constitute the former East Rand. Reconciliations of many bank accounts, Merging the assets registers Placements of employees Condition of services Streamlining process of the various administration systems while ensuring that there was no disruption to service delivery “The first step towards success is when you refuse to be a captive of the environment in which you first find yourself”

internal audit was fully institutionalised 2010 Approved top institutional structure OPCA was established 2008: Risk as function was established Administration: Implement Executive: monitoring Legislature: Oversight Milestones 2009 risk based audit 2011 Separation of power 2011 Performance contracts HoD: Risk and audit findings

Political leadership 7 All level of leadership took part as either implementers of the management letter and general improvement of the internal controls Leadership on monitoring and evaluation Oversights by different committees e.g. MPAC, Finance oversights and all committees for different departments All level of leadership took part as either implementers of the management letter and general improvement of the internal controls Leadership on monitoring and evaluation Oversights by different committees e.g. MPAC, Finance oversights and all committees for different departments

Financial Statement Compliance CLEAN AUDIT Pre-Defined Objectives 8 Annual Financial Statement: unqualified audit opinion Pre-determined objectives (service delivery): No material findings Laws, regulations and policies: no material findings EMM and 5 of its 6 entities achieved clean audit. Annual Financial Statement: unqualified audit opinion Pre-determined objectives (service delivery): No material findings Laws, regulations and policies: no material findings EMM and 5 of its 6 entities achieved clean audit. Pillars for clean audit

Approach to Operation Clean Audit Approach Audit findings were addressed as a project and not once off. Emphasis was placed on the value chain not audit finding raised. Proactive approach was taken to ensure that the root cause is addressed OPCA report was done quarterly to Mayoral committee Internal Auditor assisted by providing independent assurance on the implementation of the action plans on audit issues and take their findings serious Approach Audit findings were addressed as a project and not once off. Emphasis was placed on the value chain not audit finding raised. Proactive approach was taken to ensure that the root cause is addressed OPCA report was done quarterly to Mayoral committee Internal Auditor assisted by providing independent assurance on the implementation of the action plans on audit issues and take their findings serious Leadership Tone at the top towards good and clean administration is clear and unambiguous. Team work Appointment of competent professionals Strong audit committee Leadership Tone at the top towards good and clean administration is clear and unambiguous. Team work Appointment of competent professionals Strong audit committee MPAC Robust MPAC that hold Executive and SM accountable Follow-up on consequence management Deadline driven EM and CM Review performance of the metro against commitments they made to the AG at the end of the previous financial year

Qualified opinions Unqualified 4 yrs 2014 CLEAN AUDIT 2015 beyond sustain the clean audit Milestones

Risk assessment of three key pillars of the clean audit. Mitigation strategy for ensuring that focus remains Quality of reporting on predetermined audit objectives non-financial information. Risk assessment of three key pillars of the clean audit. Mitigation strategy for ensuring that focus remains Quality of reporting on predetermined audit objectives non-financial information. 11 BACK TO BASICS Sustaining the clean audit Continue to train the finance team, Performance, Risk and Audit. You will definetrly not change the world if you are always worried about being liked

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