AGSA APPROACH TO mSCOA REFORM 9 March 2017

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.

Purpose This purpose of this presentation is to share the AGSA approach towards the mSCOA reforms.

We have adopted the following three-fold approach in order to support and respond to the mSCOA for local government reform: Participation in project Our audits - before implementation Our audits - after pilot phase

Current status of IT in South Africa 2013-14 MFMA IT governance Security management Overall status of information technology controls Current state of IT Majority of municipalities do not have adequate controls designed across major focus areas. There is a lack of adequately qualified staff to design these controls. We must consider the impact of mSCOA on Municipalities with no IT controls. Most municipalities do not have adequate business processes mapped to be aligned to mSCOA. User access management IT service continuity Good Concerning Intervention required IT controls embedded and functioning effectively IT controls to be implemented IT controls to be designed

Our audits – after pilot phase Audit process remains the same Data conversion and AFS audit During normal financial audit Increased risk to be considered for opening balances Audit AFS against the GRAP standards International Standards of auditing Grap No change in audit PROCESS Still auditing using same standards Appropriate audit evidence

Our audits – before implementation Basic mSCOA readiness assessments were performed 2015-16 Good Concerning Intervention required

In conclusion Municipalities should review data sets individually. The review must include, scrutinising the information to ensure that it is complete, correct and securely stored; Keep and maintain a document trail of the ‘data purification process’; Keep and maintain a record of all amendments and updates made to information. These records have to be signed by a person authorised to do so in the municipality’s formal delegations; and The closing balances of the municipality’s system(s) before converting to mSCOA, together with a detailed reconciliation with the take on balances of the mSCOA aligned system, duly reviewed and authorised, also needs to be kept. Robust monitoring of implementation plans. Phased – not compliance now – will just be looking at grap compliance.

Questions?