1. Presentation to Portfolio Committee on Arts and Culture
20 March 2013

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. 2012/2013 Anticipated audit outcomes

4. Summary of anticipated audit outcomes
Audit outcomes based on either interim audits performed or based on engagements held with management on the status within the auditees where interim audits not performed.
The status can still change based on the quality of AFS submitted.
This status serves as an early warning signal in entities where there are possible challenges.
The status update was performed in February.

5. Anticipated audit outcomes 2012-2013

6. Department of Arts and Culture
Summary of anticipated audit outcomes
7 entities are anticipated to receive clean audits, i.e. financially unqualified opinion with no findings on compliance and predetermined objectives.
Freedom Park
Iziko
KwaZulu Natal Performing Arts Council
Luthuli Museum
Market Theatre
Msunduzi/Voortrekker
Natal Museum

7. Department of Arts and Culture
Summary of anticipated audit outcomes
5 entities are anticipated to receive financially qualified audits.
National Arts Council
Pansalb
Packofs
SAHRA*
State Theatre
* Improvement expected from Disclaimer to Qualified

8. Main reason for other matters
Compliance
Quality of Annual financial statements (12)
Non compliance with procurement processes (12)
Performance information
Usefulness (7)
Reliability (5)

9. Interim Audit of Predetermined Objectives

10. Audit of predetermined objectives defined as:
Annual audit of reported actual performance against predetermined objectives, indicators and targets as contained in the annual performance report .
Integral part of the annual regularity audit process, confirming the
Compliance with laws and regulations
Usefulness of performance reporting
Reliability of performance reporting

11. AGSA strategy to the audit of predetermined objectives
Adopted a phased-in approach
Factual audit findings reported in both management and audit reports
No audit opinion in audit reports – only findings
Regular interaction with stakeholders (NT, Presidency, DPSA) to determine and test audit approach
Provided inputs to drafting of NT Frameworks (FMPPI)
Completed phased audit approach
Audit to the extent necessary to express an audit opinion
Audit opinion in the management report
Audit reports contain audit findings – not audit opinions

12. Audit criteria Main criteria Sub-criteria Existence
Compliance with regulatory requirements
Timeliness
Presentation
Measurability
Usefulness
Relevance
Consistency
Compliance with regulatory requirements:
Existence : Objectives, indicators and targets must be predetermined and performance information must be reported against them
Timeliness : Performance information must be reported within two months after year end
Usefulness
Presentation: Performance against predetermined objectives is reported using the relevant principles from the National Treasury guidelines.
Measurability : Indicators are well defined and verifiable, and targets are specific, measurable and time bound, as required by the National Treasury Framework for managing programme performance information.
Relevance : The indicators/measures relate logically and directly to an aspect of the institution's mandate and the realisation of strategic goals and objectives, as required by the National Treasury Framework for managing programme performance information.
Consistency : Objectives, indicators and targets are consistent between planning and reporting documents as required by the National Treasury regulations.
Reliability:
Validity : Reported performance has occurred and relates to the institution.
Accuracy : : Amounts, numbers and other data relating to reported performance have been recorded and reported correctly.
Completeness : All actual performance that should have been recorded has been included in the reported performance information.
Validity
Reliability
Accuracy
Completeness

13. Audit approach
Understand and test the design and implementation of the performance
management systems, processes, and relevant controls 1
Test the measurability, relevance, presentation & consistency of planned and reported performance information 2
Conclude on the usefulness of the report on predetermined objectives 3
Test the reported performance information to relevant
source documentation to verify the validity,
accuracy & completeness of reported performance information 4
Conclude on the reliability of the reported performance for
selected programmes or objectives 5

14. OVERVIEW
The final draft APP was audited for the Department of Arts and Culture
The focus of the interim audit was on the:
measurability and relevance of indicators and;
measurability of targets.

15. Findings – Measurability of Indicators
WELL DEFINED
4.71% error rate. 4 out of a sample of 85 indicators were not well defined VERIFIABLE 14% error rate. 12 out of a sample of 85 indicators were not verifiable

16. Findings – Measurability of Targets
SPECIFIC
8% error rate. 7 out of a sample of 85 targets were not specific MEASURABLE 7% error rate. 6 out of a sample of 85 targets were not measurable

17. Findings – Measurability of Targets
TIME BOUND None of the targets were identified as not time bound.

18. Findings – Relevance
RELEVANCE None of the indicators were identified as not relevant.

19. Technical indicator descriptions
Framework for Strategic Plans and Annual Performance Plans effective 2012/2013 requires all departments and public entities to have a technical indicator description for all performance indicators.
These technical indicator descriptions must be published on the website of the department/public entity.
Department of Arts and Culture did not have any technical indicator descriptions for the 2012/13 year as well as 2013/14.

20. Technical indicator descriptions

21. Recommendation
The department should develop the technical indicator descriptions to ensure consistent understanding of the indicators and process to reach the objectives.

22. Conclusion The APP have been changed, where applicable
Department in the process of developing the technical indicator description
Department is in the process of developing a lower planning document to indicate all key stages towards realisation of outputs or targets.

23. Questions?