PRESS RELEASE: SAICA supports the AGSA general report of audit results of national and provincial government
The South African Institute of Chartered Accountants (SAICA) supports and endorses the Auditor General's (AG's) 2011/2012 audit outcomes for national and provincial government announced last week. However, the institute also notes areas which require more work to be done by both the Government and the public sector.
The Auditor General South Africa (AGSA) is a world class supreme audit institution which performs its duties with diligence and the required due care and skill. All the findings in the report are supported by audit evidence, and the AGSA also ensures that all findings are discussed and agreed with the auditees before they are released.
Mohammed Lorgat, SAICA's project director: Public Sector comments that although SAICA supports the AG's report, it is unfortunate that the report sounds all too familiar with marginal movements in progress for certain categories such as "financially unqualified opinions with findings" and marginal movements in deterioration for other categories such as "financially unqualified opinions with no findings" over a three year comparative period. "The net result is a slight regression in the move towards clean audits."
He says when interrogating the report, there are three key areas highlighted that require corrective action in order to improve audit outcomes:
* Vacancies in key positions, leadership instability and ineffective performance management.
* Effective internal controls to prevent, detect and correct non-compliance with legislation and mistakes in the financial and performance reports are lacking.
* Government should be monitored in a thorough, diligent and collaborative manner and currently not all the role players are providing the level of assurance required.
Lorgat advises that some of these issues require concerted efforts from both Government and the private sector and that the chartered accountancy profession has the ability to assist the Public Sector, particularly with these three key areas, noting that the profession already supports Government with some of its flagship projects. The assistance can be broadly classified into the provision of: resources, training and capacity building.
"The chartered accountancy profession is already involved in specific initiatives that address certain aspects of the challenges that require corrective action. SAICA facilitates these activities, on behalf of the profession", says Lorgat.
He explains that one of the initiatives facilitated by SAICA is the FET Colleges project which is owned by the Department of Higher Education. For this project, SAICA sources and places Chartered Accountants [CAs(SA)] at FET Colleges as Chief Financial Officers. "This initiative addresses the issue of vacancies in key positions while also impacting the issue of a lack of effective internal controls", Lorgat confirms.
"Another initiative that SAICA is involved in is the Associate Accounting Technician [AAT(SA)] project for Public Sector where lower level finance staff at Government departments, who are usually responsible for the input into the accounting system, are trained to become competent in their roles", says Lorgat explaining that this initiative assists with improving the effectiveness of internal controls as the employees are able to perform their duties competently.
Lorgat maintains that the reason why the different role players are not providing the required level of assurance could be attributed to a lack of understanding of roles and responsibilities, and this can also be combined with a lack of knowledge and skills in order to effectively exercise the necessary oversight required.
"This is an area where the accountancy profession can play a meaningful role going forward in terms of providing training and resources to some of these oversight structures. This also includes providing capacity building to current officials in order for them to be able to perform their functions more effectively and efficiently."
Lorgat states that many of the service delivery misspending incidents involving large values of money occurs in tenders that the Public Sector awards. He advises that Government needs to put in place stricter control measures to tendering, that may assist in ensuring that better value for money is derived and instances of awarding tenders to unscrupulous companies is reduced.
"If all role players play their part and work in a collaborative manner then the aim of improving audit outcomes can be achieved", says Lorgat, advising that CAs(SA) have the necessary financial and critical analytical skills required to be able to develop a financial management framework that will assist the Public Sector in improving their financial management. "It is also acknowledged that no financial management framework is foolproof but if the processes in place are strong and robust together with skilled people implementing the financial management then it will result in stronger financial management which will lead to better service delivery", Lorgat concludes.
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The South African Institute of Chartered Accountants (SAICA), South Africa's pre-eminent accountancy body, is widely recognised as one of the world's leading accounting institutes. The Institute provides a wide range of support services to more than 34 500 members who are Chartered Accountants and hold positions as CEOs, MDs, board directors, business owners, chief financial officers, auditors and leaders in their spheres of business operation. Most of these members operate in commerce and industry, and play a significant role in the nation's highly dynamic business sector and economic development.
SAICA serves the interests not only of the Chartered Accountancy profession, but also of society in general through its key objective of upholding professional standards and integrity. The pre-eminence of South African Chartered Accountants [CAs(SA)] nationally and internationally attests to the successes achieved by SAICA on a broad global canvas. SAICA's members enjoy the privilege of using the highly regarded and prestigious CA(SA) designation. Members of SAICA are subjected to a Code of Professional Conduct, which provides guidelines for ethical and professional behaviour. Fundamental ethical principles to which CAs(SA) are expected to achieve include:
* Professional Competence and Due Care;
* Confidentiality; and
* Professional Behaviour.
SAICA members serve on international accounting bodies including; the Trustees of the International Financial Reporting (IFRS) Foundation, the International Accounting Standards Board (IASB), the IFRS Interpretations Committee, the IFRS Advisory Council and the Council of the International Federation of Accountants (IFAC). SAICA is also a member of The Global Accounting Alliance (GAA).
For more information visit www.saica.co.za