Performance audit of consultants Department of Rural Development and Land Reform May 2010

Points of discussion Welcome Mandate Scope Researchable questions Progress Closure

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.

Mandate of the AGSA Section 188 of the Constitution, 1996 (Act No. 108 of 1996), Sections 4,15 and 20 of the of the Public Audit Act, 2004 (Act No. 25 of 2004) (PAA), and the Auditor-General Directive 1 of 2006 issued in terms of section 13 of the PAA.

Performance Audit Described as an independent auditing process to evaluate measures instituted by management to ensure resources are procured economically and are used efficiently and effectively.

Performance Audit (continue)… Concepts defined as follows:- Economy – to procure resources of the right quality in right quantities at right time and place at the lowest possible cost, Efficiency – to achieve the optimal relationship between the output goods, services or results and the resources used to produce them, Effectiveness – to achieve policy objectives, operational goals and other intended effects.

Why PA on consultants? The purpose of the PA is to identify transversal shortcomings on the use of consultants thus enabling government and relevant stakeholders (DPSA/PSC and National Treasury) to take corrective steps to address shortcomings identified.

Why PA on consultants (continue)… Definition of a consultant: Consulting services refer to specialist services and skills provided that are required for the achievement of a specific objective, with the aim of providing expert and professional advice on a time and material basis. It is unnecessary to maintain these skills in-house, since they are required on a once-off or temporary basis.

Scope The performance audit will focus on the following: Planning and appointment of consultants Use of consultants to compensate for the lack of permanent staff Training and transfer of skills Performance management and monitoring of consultants Extension of contracts and circumstances under which contracts are extended or modified Closing of project

Researchable questions Whether the department distinguishes between areas where: permanent capacity is required and where staff on a fixed establishment will be more cost-effective, while ensuring continuity and service delivery the objectives of the department will be achieved better through the appointment of consultants.

Researchable questions (continue) In instances where consultants are appointed in positions for which the function is provided for on the establishment of the department, whether: there is a process to ensure that the appointment of a consultant is not the result of a lack of productivity or capacity of existing staff this is not done as a result of ineffective processes to appoint or recruit suitable permanent staff the department has processes in place to limit the duration of the appointment through effective recruitment, appointment and training programmes. .

Researchable questions (continue) Whether the processes to employ and monitor the work of consultants: are cost-effective and whether the department considers alternative options to ensure that the objectives and business needs are achieved in a timely and cost-effective manner result in appointing consultants most suitable to the requirements of a specific project provide for proper contract administration, including the setting of proper milestones, performance targets, monitoring systems, roles and responsibilities, and the transferring of skills avoid contracts being prolonged guard the department against becoming over reliant and dependent on the use of consultants.

Researchable questions (continue) Whether the management information on consultants meets the need of management and those charged with governance with regard to, inter alia: the extent of the use of consultants, including an analysis of consultants appointed to perform a specific task or achieve a specific objective achieving the targets/milestones and objectives at the end of the project providing information on consultants appointed to supplement or replace existing capacity to perform normal operational functions.

Progress made The first steering committee was held on 8 October 2009 and the criteria was agreed to. The planning phase has been completed. The execution phase is nearly completed. There was some delay as a result of information requested not being submitted on time. It is anticipated that the management report will be issued to the DG in June 2010.

Questions and closure