1. AGSA APPROACH TO mSCOA REFORM 9 March 2017

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

4. 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

5. Current status of IT in South Africa
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

6. 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

7. Our audits – before implementation
Basic mSCOA readiness assessments were performed
Good
Concerning
Intervention required

8. 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.

10. Questions?