Predetermined Objectives – 2013/14 SAPO Predetermined Objectives – 2013/14 16 April 2013 Portfolio committee

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.

OVERVIEW The final draft of the 2013-2016 Corporate Plan was reviewed for The South African Post Office (SAPO). All indicators and targets obtained in the Corporate plan were reviewed Our focus was to assess the usefulness of the information contained in the plan in terms of the: measurability and relevance of indicators (well-defined, verifiable, relevant) measurability of targets (specific, measurable, time-bound, relevant) Findings and discussions Conclusion in management report Thresholds on errors identified: 0% to 19%  No opinion 20% to 50%  Qualified Above 50%  Adverse or disclaimer

Findings – Measurability of Indicators WELL- DEFINED Definition: The indicator needs to have a clear, unambiguous definition so that data will be collected consistently and be easy to understand and use. Error rate: 0% of indicators were not well-defined Example 1: Strategic goal 2 - INVEST IN PEOPLE, TAKE THEM ALONG AND BUILD CAPACITY FOR THE FUTURE Strategic Objectives Wellness Indicators Staff participation in HIV/AIDS testing programs    Target Target of 78% of total staff to  be progressively tested by end of Q4 from a base of 75 %  Please specify total number of staff and time this should be achieved   Comments Not able to assess amongst others: * the processes followed to collect information; * supporting documentation used; * method of calculation, etc The indicator is therefore not well-defined and not verifiable (no process stated) Example 2: Strategic goal 3 - ALIGN BUSINESS OPERATIONS TO CUSTOMER NEEDS, SHAREHOLDER AND GOVERNMENT PRIORITIES Preferential procurement Enterprise development Indicator Total BBBEE spend    60 %   Technical indicator description not compiled and the indicator is not clear. Not able to assess amongst others: * the processes followed to collect information; * supporting documentation used; * method of calculation, etc The indicator is therefore not well-defined and not verifiable (no process stated)

Findings – Measurability of Indicators (continued) VERIFIABLE Definition It must be possible to validate the processes and systems that produce the indicator. Error rate: 0% of indicators were not verifiable Example: Same as for well-defined.

Findings – Measurability of Targets SPECIFIC Definition: The nature and the required level of performance can be clearly identified. Error rate: 7% of targets were not specific (Goal 1,3,&5). Example: Strategic objectives – Social investment Indicators - No. of secondary beneficiaries (secondary trainees being trained by forum members) Target – 6000 beneficiaries Comment: There is no indication of the nature of the interventions and type of training. Not sure whether it's linked to the digital solutions.

Findings – Measurability of targets (continued) MEASURABLE Definition: The required performance can be measured. Error rate: 5,6% of targets were not measurable (Goal 1,3&5). Example: Strategic objectives – Compliance assurance Indicators - % of Approved operational policies Target – 35% Review and alignment of policies and procedures Comment: Need to be more specific of current number of policies to allow for proper measurement

Findings – Measurability of targets (continued) TIME BOUND Definition: The time period or deadline for delivery is specified. Error rate: 2,8% of targets were not time bound (Goal 3&5) Example: Strategic objectives – Preferential procurement Enterprise development Indicators - Board approved supplier development strategy Target – Delivery of board approved, comprehensive enterprise development Comment: No indication of when approval and implementation is expected.

Findings – Relevance RELEVANCE Definition: Indicators : The indicator must relate logically and directly to an aspect of the institution’s mandate and the realization of strategic goals and objectives. Targets: The required performance is linked to the achievement of a goal. Error rate: 0% of indicators and related targets were not relevant

Technical indicator description The Framework for Managing Programme Performance Information (FMPPI) chapter 5 paragraph 5.2 requires that the accounting officer ensures the existence of the documentation addressing the following: Definitions and technical standards of all the information collected by the institution; Processes for identifying, collecting, collating, verifying and storing information. Technical indicator description published – not required

Conclusion The errors identified relating to the 2013/14 plan: Targets not specific: below the threshold for qualification; Targets not measurable: below the threshold for qualification; Targets not time bound: below the threshold for qualification; Indicators not well-defined: below the threshold for qualification; Indicators not verifiable: below the threshold for qualification; Indicators and related targets not relevant: below the threshold for qualification. Thresholds on errors identified: 0% to 19%  No modification 20% to 50%  Qualified Above 50%  Adverse or disclaimer

Expected audit outcome (AOPO) Findings on both usefulness and measurability (the extent still to be determined)

Current challenges (overall) Vacancies (incl. GE: Supply Chain Management; Chief Information Officer; Chief Operating Officer) Non-adherence to existing policies (e.g. Fruitless, wasteful and irregular expenditure) Resolution of prior year findings Non-compliance with laws and regulations Weaknesses in contract management Lack of policies and procedures for performance information

Key recommendations Leadership required to understand the process to be able to guide and direct the development and implementation of proper performance planning and management practices Clearly defined roles and responsibilities linked to corporate plan and individual performance contracts. Develop and implement standard operating procedures A forum should be established for the portfolio to share insights and have a consistent approach. Continue to involve the auditors in the planning process for performance information. Establish and implement action plans to resolve prior year findings Leadership required to guide and direct the development and implementation of proper performance planning and management practices to provide for the development of a corporate plan in line with the FMPPI (communication gap between Group executives, Strategic support and the board)

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