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Auditor-General of South Africa receives yet another clean audit report

CAPE TOWN – The Auditor-General of South Africa (AGSA) today tabled its annual report for the period 2009-10 to Parliament. The organisation obtained an unqualified audit opinion, yet another proof of the AGSA’s commitment to leading by example in the area of financial reporting, good governance and accountability within the public sector.
Amongst other notable achievements in the year under review, the AGSA achieved a substantially improved financial result, moving from a deficit in 2008/09 to a surplus in its first year of implementation of its revised funding model.
The organisation also recorded an improvement in its labour turnover rates from 11% in 2008/09 down to 6, 6%, and a 100% in the retention of its qualified trainee auditors in the period under review. The organisation was also rated as one of the country’s Preferred Employers in 2010 by Top Magazine.
The AGSA continued to support broad-based black economic empowerment (BBBEE) in the auditing industry, spending R508 million (R551 million: 2009) toward private audit firms that participate in the public sector audit process on behalf of the AGSA. This goes a long way to bolster the development and growth of accounting and auditing skills in the country.
However, the inability of municipalities, and to a lesser extent provincial governments, to timeously pay for auditing services rendered by the AGSA, resulted in the institution reporting a total outstanding debt increase from R293 million (as at 31 March 2009) to R357 million (as at 31 March 2010) with municipalities contributing 39% (2009: 36%) of the total debt outstanding.
Says Deputy Auditor-General, Kimi Makwetu: “As an institution that is charged with scrutinising the financial performance of others, we are constantly striving to lead by example when dealing with public finances. We know there are still critical areas, such as debt collection, that we need to improve on and we have put measures in place to better our performance in those identified areas. In response to the confidence and trust bestowed upon us by Parliament, we are inspired to continue to raise the bar on our performance and become even more proficient in our operations.”
“The AGSA leadership, led by the Auditor-General, continues to constantly meet and share ideas on improving future audit outcomes with both legislative and executive leadership at local, provincial and national level. For example, the (AGSA) team has completed visits to all municipalities in six provinces and aims to visits all before the end of 2011. Also, we continued to focus on making our reports simple, clear and relevant so as to facilitate understanding of our audit findings and ensure that our audit recommendations are actioned. The primary aim of all these interventions is to ensure that those charged with governance develop an intimate understanding of our findings. Once clearly understood, our message will hopefully trigger the right actions that will influence a speedy migration towards achieving clean administration and accountability in the public sector,” says Makwetu.
“The awareness and overwhelming commitment from executive and oversight leadership to improve future audit outcomes is encouraging, and shows that the drive to contribute towards public sector accountability and clean administration is achievable,” concludes Makwetu.

About the AGSA

As the supreme audit institution, the AGSA is responsible for the auditing of national and provincial state departments and administrations, all municipalities and any other institution or accounting entity required by national and provincial legislation to be audited by the AGSA.
The AGSA is answerable only to Parliament. It is held accountable by a number of parliamentary mechanisms, including the Standing Committee on the Auditor-General (SCoAG) which maintains oversight over the AGSA; and an Audit Committee which ensures that the AGSA maintains a sound financial and risk management and internal control system. External auditors, Moore Stephens, are responsible for auditing the AGSA’s financial statements and performance information As required by the Public Audit Act (PAA), the AGSA has to table, in Parliament, an annual report which includes audited financial statements. The report also incorporates performance information measured against predetermined objectives on how the AGSA performed in key areas such as public sector auditing, human resources, financial management, audit quality assurance, employment equity and broad-based black economic empowerment.

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