DEFINING THE REGULATED EXPECTATIONS FROM THE AGSA Procurement and contract management PURCO Higher Education Procurement Conference October 2012

2 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.

3 The expectation “Evaluation of public financial and performance management” – AGSA General Notice 839 of 2011 – Govt Gazette No Practically this means a standardised reporting format dealing with: Reflection on financial reporting Reflection on service delivery reporting Reflection on compliance with laws and regulations Foundation – internal control

4 Compliance with laws and regulations Current focus areas for audit of compliance with laws and regulations: Higher Education Act Human resources management Procurement and contract management (SCM) Other (with financial impact)

5 Overview of SCM in the Public Sector The Constitution of South Africa PFMA PPPF Act SITA Act National Treasury Regulations NT SCM guide & Circulars CIDB Act PPP Regulations SITA Regulations CIDB Regulations Standard for uniformity CIDB Practice Notes NT Practice Notes & Instructions

6 Overview of SCM in the Higher Education Sector The Constitution of South Africa Higher Education Act Own Policies and Procedures on SCM Fair, equitable, transparent, competitive and cost effective procurement (s217 of Constitution)

7 Minister of Higher Education and Training Blade Nzimande's Budget Vote speech in Parliament, Cape Town 24 April 2012 “Universities will this year receive R20.9 billion while R4.8 billion is allocated to the Further Education and Training Colleges (FET) Conditional Grant. The National Student Financial Aid Scheme (NSFAS) will receive R5 billion during the 2012/13 financial year for loans and bursaries in the University and FET Sectors. The rest of the budget allocation is shared between our statutory bodies and normal operating expenses of our Department. Over the next two years, R3.8 billion has been earmarked for universities' overall infrastructure development, prioritising historically disadvantaged institutions”

8 SCM Findings Universities – 2011

9 9 Status of focus areas

10 Status of key focus areas for oversight and governance structures

11 SCM Findings Local Government – 2010/11

12 Summary of findings on supply chain management

13 Key drivers Effective internal control Governance Financial and Performance management Leadership

14 Key drivers LEADERSHIP Culture of honesty, ethical business practices and good governance Exercise oversight responsibility Effective HR management Policies and procedures Action plans to address internal control deficiencies IT governance framework FINANCIAL AND PERFORMANCE MANAGEMENT Proper record keeping Controls over daily and monthly processing and reconciling of transactions Regular, accurate and complete financial and performance reports Review and monitor compliance with applicable laws and regulations Design and implement formal controls over IT systems GOVERNANCE Appropriate risk management activities Adequately resourced and functioning internal audit unit Audit committee that promotes accountability and service

15 Final outcome “ Fair, equitable, transparent, competitive and cost effective procurement ”

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