Assessment of Annual Performance Plan 2014/15 Department of Rural Development and Land Reform

Assessment of Annual Performance Plan 2014/15

Department of Rural Development and Land Reform

2 July 2014

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Reputation promise/mission

The Auditor-General of South Africa has a constitutional mandate and, as the Supreme Audit Institution (SAI) of South Africa, it exists to strengthen our country’s democracy by enabling oversight, accountability and governance in the public sector through auditing, thereby building public confidence.

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Topics for discussion

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Audits performed by AGSA

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Clean administration – from annual audits

*Not qualified, disclaimed or adverse opinion

Annual audit of reported actual performance against predetermined Annual audit of reported actual performance against predetermined objectives, indicators and targets as contained in the annual objectives, indicators and targets as contained in the annual performance report . performance report .

Annual audit of reported actual performance against predetermined Annual audit of reported actual performance against predetermined objectives, indicators and targets as contained in the annual objectives, indicators and targets as contained in the annual performance report . performance report .

Integral part of the annual regularity audit process, confirming the • Compliance with laws and regulations• Usefulness of performance reporting• Reliability of performance reporting

Integral part of the annual regularity audit process, confirming the • Compliance with laws and regulations• Usefulness of performance reporting• Reliability of performance reporting

Audit of predetermined objectives defined as:

An audit report must reflect an opinion or conclusion relating to the performance of the

auditee against predetermined objectives

An audit report must reflect an opinion or conclusion relating to the performance of the

auditee against predetermined objectives

Sections 20(2)(c) and 28(1)(c) of the Public Audit Act (PAA)Sections 20(2)(c) and 28(1)(c) of the Public Audit Act (PAA)Sections 20(2)(c) and 28(1)(c) of the Public Audit Act (PAA)Sections 20(2)(c) and 28(1)(c) of the Public Audit Act (PAA)

Applicable to all spheres of governmentApplicable to all spheres of governmentApplicable to all spheres of governmentApplicable to all spheres of government

Legislative requirements - auditing

Public Finance Management Act (PFMA), 1999 (Act No.1 of 1999)Public Finance Management Act (PFMA), 1999 (Act No.1 of 1999)

Treasury Regulations issued in terms of the PFMA, 2002Treasury Regulations issued in terms of the PFMA, 2002

Public Service Regulations (PSR), Part III B: (Only applicable to departments)Public Service Regulations (PSR), Part III B: (Only applicable to departments)

Guidelines, instruction notes, practice notes, issued by National TreasuryGuidelines, instruction notes, practice notes, issued by National Treasury

Framework for managing programme performance information (issued by the National Treasury in May 2007)

Framework for strategic and annual performance plans(issued by National Treasury in August 2010)

Framework for managing programme performance information (issued by the National Treasury in May 2007)

Framework for strategic and annual performance plans(issued by National Treasury in August 2010)

Legislative requirements for planning, budgeting & reporting of performance info

Completed phased audit approach Audit to the extent necessary to

express an audit opinion Audit opinion in the management

report Audit reports contain audit findings

– not audit opinions

Completed phased audit approach Audit to the extent necessary to

express an audit opinion Audit opinion in the management

report Audit reports contain audit findings

– not audit opinions

Adopted a phased-in approach Factual audit findings reported in

both management and audit reports No audit opinion in audit reports –

only findings Regular interaction with stakeholders

(NT, Presidency, DPSA) to determine and test audit approach

Provided inputs to drafting of NT Frameworks (FMPPI)

Adopted a phased-in approach Factual audit findings reported in

both management and audit reports No audit opinion in audit reports –

only findings Regular interaction with stakeholders

(NT, Presidency, DPSA) to determine and test audit approach

Provided inputs to drafting of NT Frameworks (FMPPI)

AGSA strategy to the audit of predetermined objectives

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Auditing the planning, budgeting and reporting cycle

ExistenceExistence

TimelinessTimeliness

PresentationPresentation

MeasurabilityMeasurability

RelevanceRelevance

Consistency Consistency

ValidityValidity

AccuracyAccuracy

CompletenessCompleteness

Compliance with regulatory Compliance with regulatory requirementsrequirementsCompliance with regulatory Compliance with regulatory requirementsrequirements

UsefulnessUsefulnessUsefulnessUsefulness

ReliabilityReliabilityReliabilityReliability

Audit criteria

Understand and test the design and implementation of the performance management systems, processes, and relevant controls

Understand and test the design and implementation of the performance management systems, processes, and relevant controls 11

Test the measurability, relevance, presentation & consistency of planned and reported performance information

Test the measurability, relevance, presentation & consistency of planned and reported performance information22

Conclude on the reliability of the reported performance for selected programmes or objectives

Conclude on the reliability of the reported performance for selected programmes or objectives55

Audit approach

Test the reported performance information to relevant source documentation to verify the validity,

accuracy & completeness of reported performance information

Test the reported performance information to relevant source documentation to verify the validity,

accuracy & completeness of reported performance information44

Audit reporting – Management report

An audit conclusion will be prepared and included in the management reports for all departments, constitutional institutions, trading entities, public entities, Parliament and provincial legislatures

An audit conclusion will be prepared and included in the management reports for all departments, constitutional institutions, trading entities, public entities, Parliament and provincial legislatures

Usefulness of information: Audit findings focus on the consistency, relevance, measurability & presentation of reported performance information.

Reliability of information:

Audit findings focus on the validity, accuracy & completeness of reported performance information

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

Predetermined objectives

COMPLIANCE WITH LAWS AND REGULATIONS

Report non-compliance matters in relation to the performance management and reporting processes

Audit reporting – Auditor’s report

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Assessment of 2014/15 APP – Department of Rural Development and Land Reform

AGSA Approach for assessment of 2014/15 Annual Performance Plan• The strategic plan and APP of 2014/15 approved by the Minister and was

submitted to the AGSA in March 2014. The approved APP will therefore be audited in detail during the 2014/15 audit.

• From assessment of the 2014/15 APP we could verify the consistency of the APP to the overall 2014-2019 strategic plan and to the department’s mandate.

• It should be noted that although DRDLR did submit the 2014/15 APP for review no technical indicator descriptions was submitted with the 2014/15 APP and therefore the measurability and relevance of the APP could not be verified. This will only be verified once the technical indicator descriptions have been received.

• The 2014/15 interim audit of the final 2014-15 APP will focus on the following: – The process followed for the preparation, submission and approval of strategic plans

(if relevant) and APP’s. – Assessment of the measurability and relevance of the indicators and targets

planned for each selected programme/objective.

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Presentation

Objectives, indicators and targets must be consistent between planning and reporting documents.

Consistency

Measurability

Indicators should be well-defined and verifiable. Targets should be specific, measurable and time-bound.

Relevance

The indicators relate logically and directly to an aspect of the institution's mandate, and the realisation of strategic goals and objectives

Audit of Predetermined Objectives

No material findings identified

No material findings identified.


Conclusion

Requirement

Conclusion

Conclusion

Conclusion

Requirement

Requirement

Requirement

Usefulness of 2013/14 Annual Performance Report


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No matters reported Reported in audit report

Additional Matter paragraphs included in audit report: Material adjustments were made to the annual performance report submitted for audit

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Presentation

Objectives, indicators and targets must be consistent between planning and reporting documents.

Consistency

Measurability

Indicators should be well-defined and verifiable. Targets should be specific, measurable and time-bound.

Relevance

The indicators relate logically and directly to an aspect of the institution's mandate, and the realisation of strategic goals and objectives


Changes to objectives, indicators and targets not approved.Reported targets not consistent with planned targets

No material findings reported.

21% of the performance indicator is not well defined

Conclusion

Requirement

Conclusion

Conclusion

Conclusion

Requirement

Requirement

Requirement

Usefulness of 2012/13 Annual Performance Report

Not all variance explanations could be supported with supporting documentation

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No matters reported Reported in audit report

No Additional Matter paragraphs included in audit report.

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Audit finding from the 2013/14 audit - Department of Rural Development and Land Reform

Findings Root cause Recommendations

1 Duplication of actual target achieved reported on the Annual performance report

Financial and performance managementImplement controls over daily and monthly processing and reconciling of transaction

The department did not perform reconciliation of the listing to actual source document to ensure that the listing supporting the performance reported in the annual performance report is free from any duplications, listing were not properly validated against duplication errors

All information or portfolio of evidence obtained from different provinces or branches should be reviewed by the sevice delivery coordinators and monitoring and evaluation official at both the regional and national office to ensure that they are valid and accurate

A standard policies and procedures and templates should be developed on the process of collating and evaluating the portfolio of evidence.

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Audit finding from the 2013/14 audit – Department of Rural Development and Land Reform


2 Inconsistencies between target as per APP and target as per quarterly reports

LeadershipExercise oversight responsibility regarding financial and performance reporting and compliance and related internal controls

This is as a result of lack of monitoring review of the quarterly report prepared and submit to confirm for accuracy before they are submitted to the National Treasury.

• Management should ensure that all reports submitted to the National Treasury are reviewed and are accurate.

• Evidence that supports the approval of changes and reasons for the adjustments should be provided for all objectives, indicators and targets in order to comply with the relevant regulations requirement.

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Audit finding from the 2013/14 audit - Department of Rural Development and Land Reform


3 Inadequate information systems to enable monitoring of the progress made towards achieving the goals

Leadership:Design and implement formal controls over IT systems to ensure the reliability of the systems and the availability, accuracy and protection of information. The Planning, Monitoring and Evaluation Directorate (PM&E CD) did not have an effective information or IT systems and formal controls over those systems designed and implemented to ensure the reliability and protection of data used for reporting on progress against targets in the annual performance plan.

Management should ensure that the necessary and appropriate information system is established, operational and used in the management of performance information in the department.

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Audit finding from the 2013/14 audit – Department of Rural Development and Land Reform


4 Quarterly report not submitted within 60 days to National Treasury

LeadershipExercise oversight responsibility regarding financial and performance reporting and compliance and related internal controls

This is as a result of lack of monitoring and adherence to the National Treasury Preparation guide and their policy and procedures when preparing and submit ting the quarterly performance report.

The department should adhered to their Programme Performance Monitoring Guidelines and Policy for Planning, Monitoring and Evaluation that addresses the National Treasury reporting requirements

Common root causes

Inadequate training of staff

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Recommendations and way forward

Key driver of internal control

Recommendations for improvement

Leadership Exercise oversight responsibility regarding performance reporting and compliance and related internal controls

Action plans to address internal control deficiencies should be specific, time bound and progress should be monitored

Training and development of relevant performance management staff

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Performance management system

Develop and implement standard operating procedures

Management to ensure clear definitions and technical standards for indicators and targets are developed

Supporting documentation (data definitions)

Ensure adherence to FMPPI

Clearly defined roles and responsibilities

Individual performance contracts should be aligned to the organisational objectives

Continuous monitoring and reporting of performance

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Governance The audit committee should report on the acceptability of the quarterly reports submitted to National Treasury and should also ensure that internal audit provides assurance on a quarterly basis and monitors implementation of the action plans

Internal audit should monitor the reporting against predetermined objectives on a regular basis

Reporting on predetermined objectives should be included in risk management strategy and practices

THANK YOU

Questions??

Documents

Assessment of Annual Performance Plan 2014/15 Department of Rural Development and Land Reform