09 October 2017 “Sustaining service delivery amidst the challenging economic climate” CIGFARO 88th Annual Conference

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

The challenging economic climate Post 1994, South Africa has seen a marked improvement in the living conditions of ordinary citizens but the pace at which services are being delivered has slowed The country has not managed to reduce the triple challenges that have reached unacceptable levels with unemployment reaching a 13 year high of 27.7% in the first quarter of 2017 remaining unchanged in the second quarter The current economic outlook is marked by increased government debt due to sluggish growth The public sector’s balance sheet is also exposed to sizable contingent liabilities from state-owned enterprises Consumer and investor confidence has been hampered by weakened governance and uncertainties around future economic policies as the country faces the looming presidential elections This means that there is more pressure to do more with less and to find more innovative and sustainable methods of delivering essential services

Environment for impactful and sustainable service delivery A commitment to building internal capability will allow government to come up with innovative solutions Sharpening strategic thinking Integrated planning and execution of some projects will ensure a much more holistic approach to service delivery Removing silo mentality Government can be in a better position to meet citizens’ needs and instil a sense of ownership to the people. Citizen participation If the country is going to undertake huge infrastructure programs we need to have the skills and capabilities within government to carry that out. Building specialized capabilities Municipalities are the main service delivery instruments of government and for that reason they should receive support to ensure that they can become self-reliant Creating resilient municipalities Governance of public institutions should be driven by accountable and transparent leadership where corruption cannot flourish Good governance and effective management

The role of the audit profession AGSA Reports Demonstrated the governance challenges faced by most government entities Increased irregular expenditure Root cause continued non-compliance with supply chain management legislation Potential impact Resources are diverted to less productive and less efficient activities Regularity Audit Performance Audit Information Systems Audit Investigations Integrated audits Impact Regularity Performance 3E’s Financial & compliance

Concluding remarks Auditing beyond the financials enables the organisation to determine whether the use of public funds has created value for the citizen and thereby elevating service delivery. Where audit firms conduct audits for the public sector, there is a need to consider elevating the audit methodology to ensure that service delivery is also part of the audit scope.

Thank You