1. Briefing to the Portfolio Committee on Department of Mineral Resources (DMR) APP 2015/16 Presenter : Margaret Seoka – Senior Manager AGSA
18 March 2015

2. 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.

3. Oversight model OVERSIGHT:
Parliament, provincial legislature or municipal council
Identify desired impacts
Assess and adjust Specify performance
indicators
Monitor and take Set targets
corrective action and allocate
resources
Policy development
Strategic Planning
Accountability
INSTITUTION
National department
Provincial department
Municipality
Public entity
Municipal entity
Operational planning and budgeting
AGSA advises the committee members on the Interim work done the Annual Performance Plan.
Budgeting process including the Medium Term Budgeting Framework.
Quarterly reporting done throughout during implementation on both performance and budget.
End year reporting includes budget review processes to determine whether money spent is in line with Targets achieved.
End-year reporting
Implementation and in-year reporting

4. Oversight component - Portfolio committee mandate
Role of Portfolio Committees (Rule 201)
consider, amend, approve or reject legislation (bills in its portfolio)
1. Legislation
consider and approve budgets and monitor expenditure of the Departments and entities reporting to them
2. Budgets
consider progress reports (monitoring) from line-function departments, and provincial and local government authorities and entities on their respective mandates
3. Mandates
ensure that all appropriate executive organs of state in its portfolio are held accountable for their actions (oversight); and
4. Accountability
conduct oversight over the executive authority and consult/liaise with any other executive organ of state and make recommendations
5. Oversight

5. Considerations for Portfolio Committees when dealing with performance monitoring
APP aligns with NDP
Adequate resources (human and financial) available to achieve APPs?
Are the targets realistic ?
S M A R T
Ask ‘how’ the entities will achieve the APPs
e.g.
Performance contracts/ monitoring
Portfolio Committee should review quarterly progress against the APP targets
Portfolio Committee should review the annual achievement against APP targets
Portfolio Committee should track any changes to the APP
Is the Strategic Plans and Annual Performance Plans for entities aligned to the National Development Plan
Does the entity have adequate resources (human and financial) available to achieve predetermined objectives
Are the targets realistic (can it be done)
How are the entities ensuring that Strategic Plans and Annual Performance Plans will be achieved (performance contracts, quarterly monitoring, etc.)
The Portfolio committee should review the quarterly progress of entities with regard to predetermined objectives and contributions to NDP
The Portfolio committee should review annual achievement of predetermined objectives by entities (Annual Reports)
The Portfolio committee should approve and track changes to strategic plans and annual performance reports

6. Support oversight – complimentary mandate
Senior
management
Accounting
officers/
authority
Executive
Required assurance levels
Extensive
Management’s assurance role
Senior management – take immediate action to address specific recommendations and adhere to financial management and internal control systems
Accounting officers/ authority – hold officials accountable on implementation of internal controls and report progress quarterly and annually
Executive authority – monitor the progress of performance and enforce accountability and consequences
Management assurance
First level of assurance
Oversight assurance
Second level of assurance
Coordinating /
Monitoring
institutions
Internal
audit
Audit
committee
Extensive
Required assurance levels
Oversight’s assurance role
National Treasury/ DPSA – monitor compliance with laws and regulations and enforce appropriate action
Internal audit – follow up on management’s actions to address specific recommendations and conduct own audits on the key focus areas in the internal control environment and report on quarterly progress
Audit committee – monitor risks and the implementation of commitments on corrective action made by management as well as quarterly progress on the action plans
Independent assurance
Third level of assurance
Oversight
(portfolio
committees /
councils)
Public
accounts
committee
National Assembly
Extensive
Required assurance levels
Role of independent assurance
Oversight (portfolio committees) – review and monitor quarterly progress on the implementation of action plans to address deficiencies
Public accounts committee – exercise specific oversight on a regular basis on any report which it may deem necessary
National Assembly – provide independent oversight on the reliability, accuracy and credibility of National and provincial government

7. Role of accounting officer Robust financial and performance management
Understanding and monitoring of the accounting officer’s mandate are key to improving internal control environment
Role of accounting officer
Robust financial and performance management
systems
Oversight and
accountability
Commitment and
ethical behaviour
Effective, efficient and transparent systems for
financial and risk management
internal controls (under control of audit committee)
procurement and evaluation
Effective, efficient, economical and transparent use of resources
Prevention of unauthorised, irregular and fruitless and wasteful expenditure and, if discovered, reporting to treasury
Efficient and economic management of available working capital
Manage and safeguard assets and liabilities
Take appropriate disciplinary steps against any official contravening the PFMA
The role of the accounting officer is critical to ensure:
timely, credible information + accountability + transparency + service delivery
Chapter 5 of the Public Finance Management Act, 1999

8. AGSA’S aspirations for the Public Service
Transparent and stable reporting systems
Budgeting and planning processes
Focussed information management platforms
Strong internal audit capabilities
Robust financial and performance management systems
Oversight and accountability
Commitment and ethical behaviour by all
Competent and value-adding Auditor General
Creating a better and dignified life for the citizens of South Africa through timely effective, efficient and economical SERVICE DELIVERY
Reporting to enable effective oversight
Applying consequences for transgressions and poor performance
Professionalism
Visible commitment by all players in the public service
Demonstrated impeccable ethical behaviour and professionalism
Independent and relevant reporting by the AG
Value-adding input expressed by the AG

9. Impact orientated APP aligned to FMPPI
AGSA Review of DMR 2015/16 APP
Usefulness
Reliability
Impact orientated APP aligned to FMPPI

10. AGSA Review of DMR 2015/16 APP Usefulness Presentation FMPPI
Consistency
APP objectives, KPI’s & targets = Strategic plan objectives, KPI’s & targets
Key performance indicator
Specific, measurable, achievable, relevant, time bound (SMART)
Target
SMART

11. Reliability of reported performance information
AGSA Review of DMR 2015/16 APP
Reliability of reported performance information
Valid
Accurate
Complete

12. AGSA Review of DMR 2015/16 APP - SCOPE
Understanding the environment (DMR policies, procedures and internal controls)
Evaluating and testing the processes, systems and controls documentation maintained that support the generation, collation, aggregation, monitoring and reporting of the performance indicators and targets.
Evaluating, testing and confirming the usefulness of planned and reported performance information in accordance with the identified performance management and reporting framework.

13. There were no significant findings reported
Audit findings 2015/16 APP
There were no significant findings reported

14. Audit findings history
DESCRIPTION
Audit report findings for PDO
Department of Mineral Resources (DMR)
Areas audited
Promotion of Mine Health and Safety
Usefulness
None
Reliability
Mineral Regulation
Mineral Policy and Promotion
AUDIT OPINION INDEX
No findings on PDO
Compliance findings on PDO reported in audit report
Significant findings on PDO reported in audit report

15. Review of DMR 2015/16 Budget % Budget allocated per programme
(R1.59 bn)
Administration 19%
Promotion of mine safety and health 11%
Mineral Regulation 15%
Mineral Policy and Promotion 55%

16. Percentage of the total excluding transfer payments
DMR Appropriation by economic classification
Year
Percentage of the total excluding transfer payments
2014/15 (R'000)
2015/ (R'000)
2016/ (R'000)
2014/ (R'000)
2015/ (R'000)
2016/ (R'000)
Compensation of employees
476.8
505.7
539
32%
Goods and services
265.6
278.8
356.5
18%
17%
21%
Payments for capital assets
11.0
11.5
12.1 1%
Transfer payments
717.9
803.3
756.4
49%
50%
45%
Total
1471.3
1599.3
1664
100%

17. Amount of irregular expenditure (R'000) % of IE to Total Expenditure
Irregular expenditure(IE) as a percentage of total expenditure
Year
Amount of irregular expenditure (R'000)
Total expenditure (R'000)
% of IE to Total Expenditure
2013/14
1 567
0.11%
2012/13
3 348
0.28%
2011/12
7 905
0.76%

18. Implementation of the action plan by the DMR
Status of issue raised
Number of items
% per category
Implemented 27
82%
In progress 6
18%
Not implemented 0%
Total 33
100%
Implementation of the action plan- AGSA findings

19. Audit progress
The audit of the 2015/16 APP has been completed and there were no significant issues identified.
The planning for the 2014/15 financial year has been completed and the execution of the audit is currently in progress. There are no significant issues identified to date

20. Questions?