Presidency gets unqualified audit

Friday, September 29, 2017

The Presidency has registered an unqualified audit for the 2016/17 financial year.

Tabling its Annual Report 2016/17 on Friday in the National Assembly, the Presidency said a lot of progress has been made in various areas outlined in the Annual Performance Plan.

The Annual Report reflects the activities undertaken by The Presidency during the past financial year in continued efforts to provide support to the President in the execution of his Constitutional responsibilities and electoral mandate, supported by the Deputy President.

According to the report, the Presidency has achieved 78% of its key programme targets and spent 97% of its allocated funds for the reporting year.

“Throughout 2016/17, significant support was provided to the President and Deputy President Cyril Ramaphosa in leading government’s programme of action,” said the Presidency.

The Presidency said it continued to work as a centre for strategic coordination in government, and in identifying and addressing major impediments to the effective implementation of government’s programme of action, which is aimed at eliminating poverty, unemployment and inequality.

Cabinet and cabinet committees as well as the Forum of Directors-General met and continued with the strategic tasks of leading government planning and implementation of the Programme of Action (PoA), the Medium Term Strategic Framework, which is derived from the National Development Plan (NDP).

The President convened statutory bodies and also undertook work aimed at taking forward the PoA such as the work of the President’s Coordinating Council (PCC), which worked on many projects during the period under review, including monitoring the implementation of the Back to Basics programme to revitalise municipalities.

The Presidential Infrastructure Coordinating Commission (PICC) also brought together the leadership of the three spheres of government to discuss the seamless delivery of infrastructure programmes across the country.

The Black Economic Empowerment Advisory Council (BEEAC) advises the President and government on broad-based black economic empowerment interventions.

“Progress is being made in fighting fronting through the BBBEE Commission, as such practices reverse the gains of transformation. 

“The private sector, which has larger procurement muscle, was encouraged to also embrace broad-based black economic empowerment by actively buying from black owned companies and supporting SMMEs.”

The Presidency said it has also interacted with constitutional bodies such as the National House of Traditional Leaders and Chapter 9 Institutions through Presidential Working Groups including business, youth formations, religious leaders, black professionals and non-governmental organisations.

Fighting HIV/AIDS, supporting SOEs

The Deputy President leads government’s effort in the fight against HIV and AIDS as Chairperson of the South African National AIDS Council.

He launched the new National Strategic Plan on HIV/TB and STIs which is drawn from the insights, experience, learning and concerns of dozens of different partners, organisations and individuals.

The Presidency said it also continues to provide support to state owned companies, addressing governance and financial challenges.

Ongoing support is being provided to SAA, SABC and Eskom and other entities facing difficulties.

The social partners at the National Economic Development and Labour Council (NEDLAC) reached a historic agreement on labour stability and the introduction of a national minimum wage.

Following two years of intensive engagement between government, labour, business and the community sector, an agreement was reached with an outcome that would contribute to reducing inequality and that would support efforts to create more jobs.

Presidential Siyahlola Monitoring Programme

The President also undertook public engagement programmes, such as the Presidential Siyahlola Monitoring Programme visits, to communities to assess service delivery, and also izimbizo to engage communities and hear their concerns and suggestions on government programmes.

The Deputy President engaged in public engagements including the popular youth outreach programmes.

Among the achievements of the past year with regards to improving corporate governance within the Presidency has been the implementation of Anti-Corruption Strategy encompassing wide-ranging measures to prevent and combat corruption within the organisation.

To minimise the potential for conflict of interest among staff, The Presidency said it adheres strictly to the new Public Service Act (PSA), and the Public Service Regulations (PSR) which came to effect in 2016 which preclude public servants from doing business with the state.

“The full cohort of senior Presidency staff has complied with and has made financial disclosure declarations.

“As per PSR, The Presidency will in the current year cascade the requirement of financial disclosure to middle-management and all SCM staff. Staff is also required to obtain approval for remunerative work outside the public service in order to prevent conflicts of interest.”

The Presidency said it also undertook a review of 56 operational policies aimed at enhancing operational processes and management practices of the organisation.

To be able to lead and coordinate effective policy formulation and implementation in government, it requires a strong central policy capacity to provide technical and policy support to the Political Principals in the Presidency, as well as providing strategic leadership to the whole of government.

Key priority areas for 2017/18

The Presidency said one of the key priority areas for 2017/18 is the strengthening of the policy coordination capability of the Presidency to ensure that it is well positioned to deliver on its strategic priorities, whilst operating with limited resources.

While the Presidency welcomes the unqualified audit from the Auditor General (AG), it said a lot of work must be done to deal with the matters of emphasis that the AG has raised, especially relating to irregular expenditure.

For the 2016/17 financial year, out of a total budget of R495. 810 million the Presidency reported in its Annual Financial Statements that it incurred irregular expenditure to the amount of R16. 913 million, just under 3.4%.

The findings have necessitated a serious re-examination of the financial systems, and especially the financial control measures.

The categories of irregular expenditure include instances such as:

• Failure to adhere to local content requirements

• Not obtaining three quotations for procuring of services

• Not awarding tenders or contracts on time

• Deviations from or other non-compliance with SCM processes

• Acceptance of an invalid BEE certificates

• Incorrect calculation of BEE points for appointment of service providers

• Acceptance of a non-compliant tax certificate

“The cause of irregular expenditure and the nature of transgressions are under investigation. In addition, and in response to the AG’s findings, The Presidency also requested the National Treasury to undertake a performance audit of the supply chain management system in order to address the nature and causes of the irregular expenditure.

“The National Treasury investigation looked into the functions of the supply chain unit to ensure that they are in alignment with DPSA standards. It also looked into the structure of the Supply Chain Management (SCM) unit to ensure that there are adequate internal controls and capacity in place, so as to ensure the segregation of duties in SCM. 

“The National Treasury investigation further reviewed the SCM policy and procedure that are currently in place and made recommendations to align these to legislative instruments, including the PFMA, Treasury Regulations and SCM Practice notes.”

The Presidency said the final report, which is not yet finalised, will deal with the oversight role of management over SCM.

Parallel to this process, the Presidency said its internal audit unit is conducting a full scope audit on collusive bidding, which is basically irregularities that the AG uncovered of certain competing companies.

“The AG audit outcome then prompted an initial forensic audit on this matter, which was conducted at the time on a smaller sample of transactions.

“The forensic audit report recommended that the scope of the forensic audit be expanded to review any other instances that this could have occurred.”

The Presidency said it has put in place appropriate remedial measures to address systemic weaknesses which permitted these incidents of irregular expenditure. It has also opened criminal cases against the implicated persons in the transactions that have been reviewed, while disciplinary action has been undertaken against other officials involved.

A Supply Chain Management Turnaround Plan has also been developed and is being implemented to ensure improvements going forward. -


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