1. 30 January 2014
Department of Agriculture, Forestry and Fisheries (DAFF) Briefing to the Portfolio Committee

2. Reputation promise/mission
The Auditor-General of South Africa has a constitutional mandate and, as the Supreme Audit Institution (SAI) of South Africa, it exists to strengthen our country’s democracy by enabling oversight, accountability and governance in the public sector through auditing, thereby building public confidence.

3. Purpose of meeting
To brief the Portfolio Committee on progress made by the department on commitments made.

4. Agenda Audit outcomes 2012-13 Key control assessment Key focus areas
Status of commitments made
Audit of Predetermined Objectives (AoPO): Q2 review comments
AoPO: draft Annual Performance Plan (APP) audit
Clean administration
Pyramid of accountability
Conclusion and way forward

5. Audit outcomes

6. Audit outcomes 2012-13 Audit opinions 2012-13 Department 1
Auditee
Audit opinions
Financial audit opinion
Predetermined objectives
Compliance with laws and regulations
Department 1
Department of Agriculture, Forestry and Fisheries (DAFF)
Entities 2
Onderstepoort Biological Products Ltd (OBP) 3
National Agricultural Marketing Council (NAMC) 4
Agricultural Research Council (ARC) 5
Ncera Farms 6
Marine Living Resources Fund (MLRF) 7
Perishable Products Export Control Board (PPECB)
Financially unqualified with no findings
Qualified, with findings
Financially unqualified with findings
Adverse, disclaimer, with findings
Status improved from previous year (no material findings).
Same status as previous year (with material findings).
Same status as previous year (no material findings).
Situation has deteriorated from prior year.

7. Key control assessment

8. Key control assessment
DAFF

9. Key control assessment
OBP
NAMC

10. Key control assessment
ARC
NCERA

11. Key control assessment
MLRF
PPECB

12. Key focus areas

13. Key focus areas (Quarter 2)
Human Resource Management includes the audit of consultants

14. Status of commitments made

15. Quarter 2: Commitments

16. Status of implementation of commitments
Quarter 2: Commitments
Status of implementation of commitments No
Commitment
Status 1.
Ensure monthly reporting that is complete and accurate for financial (including disclosure notes) and performance information.
2nd Quarter Assessment:
Financials – Only 6 monthly AFS are prepared with full disclosure notes not monthly.
AoPO - Quarterly Monitoring Reports don’t agree to detailed listings.
Not addressed. 2.
Perform annual risk assessment to ensure an adequate and valued audit programme for the department.
2nd Quarter Assessment: No current risk assessment in place . The department indicated the risk assessment will be finalised in January 2014. 3.
Capacitate the internal audit function to be fully effective and functional.
2nd Quarter Assessment: The internal audit is still not operating effectively, no reports issued to date etc. 4.
Align performance agreements of senior management with the department’s goals.
2nd Quarter Assessment: To be followed up during interim audit.
In progress. 5.
Revise the staff establishment specially to ensure there is sufficient staff to carry out the monitoring and evaluation function (AoPO).
2nd Quarter Assessment: New appointments have been made in the M&E unit, however repeat findings on both usefulness and reliability has been identified during the interim audit. 6.
Manage deviation from the procurement process in a transparent manner.

17. Audit of predetermined objectives

18. Audit of predetermined objectives – prior year outcomes
Audit outcomes
Compliance
with regulatory
requirements
Usefulness
Reliability E x i s t e n c T i m e l n s P r e s n t a i o C o n s i t e c y M e a s u r b i l t y R e l v a n c V a l i d t y A c u r a y C o m p l e t n s
Additional matter paragraphs included in the audit report: > Material adjustments were made to the annual performance report submitted for audit.
No matters reported
Reported in audit report

19. Audit of predetermined objectives – general findings Q2
Lists provided to support targets reported do not agree to the reported targets (Reliability).
No reason for variance provided (must include over achievement) and/or reason for variances not auditable (Usefulness).
Targets not verifiable (Usefulness).
Target not specific and measurable and/or indicators do not link to targets (Usefulness).

20. Audit of predetermined objectives – 2014-15 draft APP
Usefulness of DRAFT annual performance report s
During our review of the annual performance plan we have identified the following:
Various targets in the APP do not tie up with the targets listed in the strategic plan
Lack of Technical Indicator Descriptions (TID) or incomplete TIDs
Various targets included in the APP not included in the Strategic Plan
Various targets unverifiable
DAFF still has the opportunity to correct the findings before submission of the final draft APP for approval.

21. Clean administration

22. Clean Audit Clean administration Financially Unqualified AFS
No material findings on Predetermined Objectives
No material findings on Compliance
Financially Unqualified AFS

23. Pyramid of accountability

24. Pyramid of accountability
Speaker/ Legislature
SCOPA/PC’s
Executives
Accountable Leadership
Audit Committee
Internal Audit
Skills, competence ethics and integrity
Daily, weekly, monthly financial and performance disciplines
Embedded systems of IC underpinned by policies and procedures
Monthly reporting on financial and performance/ Interim financial statements
Understanding of requirements as well as cause and effect
Accountable and
transparent government
Flow of credible information
Re-enforcing accountability at all levels, escalation and robust communication

25. Conclusion and way forward

26. Conclusion and way forward
The above assessment indicates that there is still work to be done in the movement towards clean administration however if focus is placed on addressing the root causes through implementation of the recommendations in the way forward, clean administration can be achieved.
Overall assessment
Appointment of audit committee members in terms of the Treasury Regulations;
Predetermined Objectives (AoPO);and
Capacitating internal audit.
Focus Areas
Focussed quarterly key controls assessments and discussions;
Action against transgressors (consequence management); and
Timely implementation of action plans to address root caused and not findings.
Way forward

27. Thank You