I recently had the great honour of being invited to address the special national conference of the South
African Local Government Association (SALGA), the umbrella body that represents, promotes and protects the interests of all the country’s municipalities. My address on the day dealt with how our municipalities are faring in the drive towards wholesale clean administration and accountability in the public sector.
It was extremely pleasing, and to a great extent reassuring, that both President Jacob Zuma, who spoke at the opening day of the conference, and Deputy President Kgalema Motlanthe, who took to the podium just before me, had spent considerable time addressing the issues we had highlighted in our local government audit outcomes report in July this year.
The Presidency’s reassuring good governance message
The assurance came in the knowledge that the good governance messages my office has been driving for years, namely that all municipalities are capable of achieving clean audits if there is leadership commitment, cooperation by all spheres of government and utilisation of the right skills, were being endorsed by the highest office in the land. I must hasten to state that my office has, for years now, worked closely with and received unwavering support from the Presidency and, more recently, SALGA in our collective drive for clean audits by 2014 and beyond. But it was nonetheless music to my ears to hear both the President and his Deputy remind the gathered mayors, councillors and municipal officials of the remedial actions we had committed to at various intervals to improve governance within our municipalities.
Working as collective to turn local government around
In responding to the AG’s report, Mr Zuma told the delegates, “we need to prioritise training and finding suitably qualified personnel, for example chief financial officers...we also wish to emphasise that there is a need to improve relations and cooperation between the spheres of government. This requires municipalities to align their plans and budgets with those of provinces and national government”. Among notable challenges that Mr Motlanthe, as head of government administration, posed to all of us who gathered in the Gallagher Estate hall in Midrand was that “turning local government around is one (challenge) that we must tackle collectively, drawing on the skills and talents that are available throughout society” if we are to ensure success.
An important area that requires such a coordinated response, Mr Motlanthe told the attentive audience of decision-makers, was the Auditor-General’s report which tells a tale of:
"Of course, we must also note some of the improvements that we have achieved in the past year, such as a decrease in audit disclaimers. It is also encouraging that almost half of our municipalities - 128 in total - have received unqualified audits. While these are indeed commendable areas of improvement, they do...signal that all municipalities, of whatever grade, are capable of achieving clean audits. We must therefore assist the municipalities that have fallen behind, and adopt the attitude that a 50% success rate only tells us that we are half-way there, and that one disclaimer or qualification is one too many. And so we must draw lessons from those municipalities that have had success and develop clear standards and procedures for good governance. These must include drawing in the requisite skills of chief financial officers, resident municipal engineers and human resource development managers," Mr Motlanthe concluded. Both leaders endorsed the messages my office has been impressing upon those charged with governance for years, also during my door-to-door visits to all the country’s municipalities.
Making clean administration a possibility
When I took to the same podium, my short message was to reiterate my office’s long-standing belief, which turned out to be one of the key messages from the Presidency for the conference, namely that we collectively have an opportunity to make clean administration a possibility. Under the leadership of structures such as the national executive committee (NEC) of SALGA, district municipalities, the national and provincial treasuries and the departments of Cooperative Governance and Traditional Affairs (CoGTA) and Public Service and Administration (DPSA), we can work as a united force to achieve good governance and sound financial administration in all our municipalities. My office, even on the eve of the fast-approaching Clean Audit 2014 government deadline, remains optimistic and committed to working with everyone who is committed to sustainable, wholesale clean administration and good governance in our municipalities.
Private sector professionals rolling up their sleeves and ready to assist
I shared with the SALGA conference that there was a swell of private sector professionals who are willing to share their skills and time, sometimes free of charge, to assist local government to overcome its challenges. For example, one such initiative is a forum started by the National Treasury which draws expertise and resources from professionals represented by organisations such as the South Africa Institute of Chartered Accountants (SAICA), the Institute of Directors and the Institute of Internal Auditors, as well as professionals from my office. These combined skills are readily available to assist government, in an organised manner, where there are shortages of critical skills such as financial management, engineering, etc. I urged the SALGA delegates to use these resources to help improve their results and to help train their internal personnel for continuity, thus ensuring minimal reliance on external consultants for core municipal business such as preparation of reliable financial statements or drafting of viable Integrated Development Plans (IDPs). This approach will surely minimize the outsourcing of local government - all we need to do is to get people with the right skills; provide them with the right tools of the trade and the necessary support; create an environment that encourages innovation; and finally, ensure that there are consequences for poor performance and incentives for excellent work.
Making ethical conduct and the right tone the mainstay of leadership
I told the gathering it was critical to have good systems, policies, the right people and modern tools of the trade in place. But having the leadership set the right ethical tone in pursuit of good governance is equally priceless. I urged the representatives to make ethical conduct the mainstay of their leadership and to lead by example at all times. In most municipalities, and other government departments for that matter, where leadership had set good ethical conduct, honesty and integrity as the "tone", we have seen great strides and improvements towards good governance. Nothing can be more honourable than this tone that we have to exhibit as leaders. At no stage must we have a situation that says: do as I say, not as I do. We have to strive to do the right things at all times, and those we lead will follow the example we set. Good financial management and clean administration can only happen when there are robust checks, balances and systems in place. In most instances we have excellent policies and procedures in place, and these are important as they give us guidance. But now we need to implement these with great vigour and conviction. For this to happen we need the right leadership tone that will ensure that these systems are enforced by people who are willing to tell the whole (municipal) story in a truthful manner.
Citizens' expectations of service delivery are becoming real
As we move forward, we need to take into account that citizens’ expectations of service delivery are becoming real. All over the world people are demanding what they deserve from their public service representatives. Taxpayers are comparing notes and are giving feedback on their experiences with their local government. We need to up our game to meet, and even surpass, their expectations. This will happen only when we work as a collective, sharing resources, skills and tested systems, towards wholesale clean administration. As I indicated to one SALGA representative during our question-and-answer session, those municipalities, mostly in obscure rural settings, that have limited or no resources have managed to achieve positive audit results by sharing expertise and systems that work. Led by district municipalities and provincial structures such as CoGTA and provincial treasuries, they have formed centres of excellence where good governance practices are shared, disseminated and duplicated amongst members of the collective. To borrow from one of the Presidency’s speeches at the conference, we must indeed “draw lessons from those municipalities that have had success and develop clear standards and procedures for good governance”. And dare I add that good leadership who can set the right ethical conduct tone needs to take centre stage to lead in this final lap as we collectively march and navigate our way towards wholesale and sustainable clean administration by 2014 and beyond.
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Terence was born on 30 September 1961 in Qumbu, Transkei. He matriculated at Umtata Technical College in 1979. He was awarded a BCom degree by the University of Transkei in 1982 and BCompt (Hons) by the University of South Africa in 1986. He qualified as a chartered accountant in 1990.
Terence gained valuable experience during his work in the private sector which developed his technical competencies as an accountant, external auditor and internal auditor. He also developed solid management and leadership competencies upon which he bases his leadership style.
Terence is married to Nokwanda and has three children, Mphiwa, Fezekile and Kamvalethu.
Terence started his career as a trainee accountant with KPMG in Umtata in 1983. He left KPMG in 1987 and joined Unilever in Durban as internal auditor and later as an accountant in the Lipton Tea and Soup factory in Pietermaritzburg. He then joined BP Southern Africa (BPSA) in Cape Town in 1991 as senior internal auditor. While with BP, Terence joined BP Botswana in Gaborone as finance manager in 1994. He returned to BPSA in Cape Town as market research manager in 1996.
In May 1997, Terence helped establish and was a partner-in-charge of the auditing firm Gobodo Incorporated in Cape Town where he initiated the formation of Gobodo Corporate Governance Services, an internal audit division which operates nationally with regional offices in Cape Town and Pretoria.
Terence joined the Auditor-General on 1 June 2000 in the capacity of Deputy Auditor-General and Chief Executive Officer. He brought to the organisation a firm commitment to supporting mechanisms for instituting stable governance within government. In December 2006 he was appointed to the position of Auditor-General of the Republic of South Africa. He is the first African to hold the position of Auditor-General in the organisation’s 100-year history.
His contribution to the accounting and auditing profession includes participation in some of the most prestigious professional bodies, such as:
He currently serves in the following capacities:
Terence believes that the vision of the Auditor-General of South Africa, namely “To be recognised by all our stakeholders as a relevant Supreme Audit Institution (SAI) that enhances public sector accountability”, is his biggest motivator. Terence regards this as a powerful vision that should be carried through.
"We operate in a constantly transforming and developing country. To be relevant in such a changing environment, my office is continuously redefining itself to meet challenges presented by change. For example, to make a meaningful impact we had to first acknowledge that public sector auditing is more challenging and different from private sector auditing. Public sector audits go beyond merely expressing an opinion on the financial statements. When we audit the public sector, we also comment on the effectiveness of key management processes and give feedback on compliance with laws and regulations. This qualitative approach enables public sector managers better to understand the financial impact of the identified problems and assists in helping them to prioritise the corrective actions. This is how we add value and help improve public sector financial management and our contribution to service delivery," says Terence.
Terence has committed his office to the continued unearthing and grooming of young chartered accountants and financial managers who will, in turn, use their acquired skills to help boost and continue upgrading the public sector financial management systems.
"South Africa is a rich mine of young, bright and talented youths. It is our task to help unearth and polish this latent talent. Through our trainee accountant scheme we have started that search, and we are going to all corners of the country looking for future auditors and auditors-general who will take over from us and continue helping our country manage its public resources effectively."