TVETCGC Presentation on Progress on the oversight in monitoring implementation of action plans to address the prior year audit findings and the development of action plans to address 2016/2017 audit findings

Progress on the oversight in monitoring implementation of action plans to address the prior year audit findings and the development of action plans to address 2016/2017 audit findings In 2015 TVETCGC annual General Meeting Resolved to pay attention and support Colleges in dealing with issues of Audit Outcomes as a result of poor audit outcomes for prior years. The poor Audit existed even though colleges are supported by SAICA CFO’s . TVETCGC engaged the Auditor General to establish the in-depth and causes of this poor audit outcomes. Our meeting resolved that AG will support TVETCGC is raising awareness through national and provincial workshops regarding the audit outcomes.

Progress on the oversight in monitoring implementation of action plans to address the prior year audit findings and the development of action plans to address 2016/2017 audit findings- Cont. The first workshop was for the TVETCGC NEC. Second Workshop was for all Colleges represented by Council Chairpersons, Deputy Chairpersons, Chairperson of Finance, Audit and Risk Committees, Principals, CFO’s and DHET in 2016. Third workshop took place in September 2017 with all representatives mentioned above including SAICA.

Purposes of the AG workshops AG to present audit findings to colleges. To present common trends and challenges. To present best practices for colleges to learn from each other. For colleges to interact with AG and commit to prepare audit action plans. To Assist TVETCGC to produce a consolidated audit action plans and strategies to improve college audit outcomes. To evaluate the support of SAICA to colleges. To create awareness to Councils on their oversight responsibility on the implementation of audit action plans.

Our annual audit examines three areas 1 2 3 FAIR PRESENTATION AND RELIABILITY OF FINANCIAL STATEMENTS RELIABLE AND CREDIBLE PERFORMANCE INFORMATION FOR PREDETERMINED OBJECTIVES COMPLIANCE WITH KEY LEGISLATION ON FINANCIAL AND PERFORMANCE MANAGEMENT

Unqualified opinion with no findings (clean audit) Financially unqualified opinion with findings Auditee: produced credible and reliable financial statements that are free of material misstatements reported in a useful and reliable manner on performance as measured against predetermined objectives in the annual performance plan (APP) complied with key legislation in conducting their day- to-day operations to achieve their mandate. Auditee produced financial statements without material misstatements or could correct the material misstatements, but struggled in one or more areas to: align their performance reports to the predetermined objectives they committed to in their APPs set clear performance indicators and targets to measure their performance against their predetermined objectives report reliably on whether they achieved their performance targets determine the legislation that they should comply with and implement the required policies, procedures and controls to ensure compliance.

Qualified opinion Adverse opinion Disclaimed opinion Auditee: had the same challenges as those with unqualified opinions with findings but, in addition, they could not produce credible and reliable financial statements had material misstatements on specific areas in their financial statements, which could not be corrected before the financial statements were published. Adverse opinion Auditee: had the same challenges as those with qualified opinions but, in addition, they had so many material misstatements in their financial statements that we disagreed with almost all the amounts and disclosures in the financial statements. Disclaimed opinion Auditee: had the same challenges as those with qualified opinions but, in addition, they could not provide us with evidence for most of the amounts and disclosures reported in the financial statements, and we were unable to conclude or express an opinion on the credibility of their financial statements.

Overall audit outcomes of TVET colleges Outstanding audits for 2016 are East Cape Midlands, Northern Cape Rural, Sedibeng, Tshwane North and Tshwane South Outstanding audits for 2015 are EC Midlands and TNC 50 auditees 50 auditees 50 auditees 50 auditees

Colleges audited by the AGSA 50 auditees 30 auditees 15 auditees 15 auditees

Movement table TVET Colleges (2016 over 2015) Improved Unchanged Regressed + Outstanding audits Unqualified with no findings = 9 Esayidi, Port Elizabeth, Majuba, Nkangala Ekurhuleni East, Boland, Buffalo City, Ekurhuleni West, False Bay Unqualified with findings = 12 Central JHB, Lovedale, West Coast Maluti, Mnambithi, NC Urban, Mthashana, South Cape, Elangeni, Flavius Mareka, Gert Sibande, Orbit Qualified with findings = 14 King Hintsa, Letaba, WestCol, Goldfields, Ingwe, KSD Northlink, Coastal, Mopani SE, Umfolozi College of Cape Town* Thekwini* Umgungundlovu* Vhembe* Adverse with findings = 4 Sekhukhune Lephalale Capricorn* Waterberg* Disclaimed with findings = 6 Ikhala, Motheo, Taletso, Vuselela, Ehlanzeni South West Gauteng East Cape Midlands, NC Rural, Tshwane North, Tshwane South, Sedibeng Movement 14 23 8 5 Audit outcome

Key Focus Areas to Strengthen the Sector- SAICA Commitment Improved Auditor / Auditee relationships and Audit Steering Committee functioning Implementing Audit and Risk Committees, Internal Audit and Risk Management at all Colleges Capacitating the finance departments at all Colleges Improved Audit Action Plans and ICMA usage at all Colleges Implementing month end closure processes and data integrity for TVET FMS Finalisation of the Governance Framework Regulation Finalising DPF Job grading at appropriate level and placement of DPFs starting July 2018 Improved audit outcomes Project Management skills Transfer to DHET SAICA and AG liaising more closely with regard to control compliance required

TVETCGC Council Capacity Building Programme TVETCGC convened a capacity building workshop nationally for all colleges in partnership with ETDPSETA in 2016 and 2017. Focusing on Corporate Governance and Financial management to strengthen Council oversight role.

The College engagements with the Auditor General and DHET to address the challenging arears TVETCGC will continue to convene the AG workshop with stakeholders including the Institute of Internal Auditors will be held annually nationally and provincially. TVETCGC currently co-ordinating the submission of individual Colleges Audit Action to prepare a consolidated National Audit Action by end of November 2017. TVETCGC will conduct monitoring and evaluation of colleges audit action plans implementations quarterly. TVETCGC to request AG to conduct interim audits. TVETCGC to convene meetings with SAICA and Internal Auditors to evaluate the progress on the implementation of the Audit Action plans.

Challenges of TVETCGC in Monitoring and Evaluation TVETCGC members are part-time, and this work is done on given intervals. TVETCGC has inadequate human resource capacity to carry out our mandate. TVETCGC has insufficient financial resources to properly executive effectively monitoring of the Audit Action Plans. DHET failure to provide financial support for the implementation of this programme. Performance management of the Principals that lies with DHET in terms of the ACT, requires legislative amendments. Lack of recognition of TVETCGC as statutory body result in limitation of authority and resources. TVET Colleges underfunding and huge deficit result in increase of numbers colleges declared by AG as non- going concerns and un able to pay subscription.

Conclusion TVETCGC is committed to perform its support, advocacy and oversight role to Councils with its limited resources. We are committed to clean good governance and clean audits in the TVET sector.