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On the 11-12 October 2011, SCOPA embarked on a strategic planning session. The
aim of the session was to formulate an oversight approach for the 2010/11 audit outcomes. Today marks the beginning of SCOPA’s oversight drive with a renewed focus on the scrutiny of public institution`s financial performance for the 2010/2011 financial year.
This engagement is aimed at providing the public with SCOPAs oversight focus areas for 2011/12 as informed by the 2010/11 audit outcomes.
The latest report of the Auditor General on the state of financial management in the public sector paints a picture of slow progress in attaining unqualified audits, with many departments unqualified with other matters thus taking longer to migrate to clean audits. This slow progress is of concern to us.
Having said that, the efforts of the Departments of Public Enterprises, Environment and, Science and Technology are worth applauding, these are departments that have been acquiring clean audit opinions for years, their efforts have demonstrated that when basic financial management principles are in place, the audit outcomes will most likely improve for the better.
It is also worth mentioning that we are encouraged by the progress shown by the Departments of Home Affairs. Its attainment of an unqualified audit opinion after years of mismanagement is a demonstration that with leadership, hardwork and focus things can be turned around. We are watching the developments in the Department of Defence and Military Veterans with concern. The lack of stability at the top does not assist in institutionalizing a culture of sound management.
You will recall that in 2010 we profiled the importance of active audit committees in the financial management of public institutions, as part of that profiling; we resolved to include members of the audit committees as part of the delegation for all departments that appeared in our public hearings. We can safely report that, through this initiative, we were able to solidify the importance of active audit committees in the financial management structures of public institutions.
It is with the same resolve that we want to identify the key focus areas for this cycle of reporting (2010/2011 financial year). Our aim is to have a structured oversight focus that will achieve maximum impact towards improved financial management in the public sector. We have identified the following oversight focus areas for the 2011/12 financial year;
i. Deepened oversight in the Health and Education sector primarily because of the high expenditure by government in these two sectors which is estimated to be in the region of 70% of government budget;
ii. Emphasis on the lack of compliance with supply chain management processes which leads to government incurring irregular and wasteful expenditure; and
iii. Human Resource practices in government which negatively affects the capacity of government to deliver services as some of the top level management positions remain vacant for longer periods
Although the overall focus areas for SCOPA will be on the above issues, the Committee will continue to strive for increased adherence by Departments to its resolutions and will seek collaboration with other committees to escalate matters that require deepened oversight. The following departments are prioritized for public hearings (not an exhaustive list);
• Department of Health (with its entities)
• Department of Higher Education (with its entities)
• Department of Arts & Culture (with its entities)
• Department of Public Works
• Department of Correctional Services;
• Department of Cooperative Governance & Traditional Affairs
• Department of Justice & Constitutional Development
• Department of Social Development (and SASSA)
• Department of Water Affairs
• Department of Sports & Recreation( and Boxing SA)
We are optimistic that our robust engagement with all public institutions that will appear before us will provide an opportunity to seek solutions that will improve the financial management in the public sector.
We also wish to take this opportunity to congratulate the Office of the Auditor-General on its centenary year of existence, we are appreciative of the sterling work that Office does in strengthening oversight and accountability in the country.