1. Portfolio Committee Presentation Government printing Works Audit and Compliance 07 May 2013 Presented by: Chief Executive Officer

2. In attendance from the GPW Prof AD Mbewu Chief Executive Officer Ms PM Sedite Chairperson Audit Committee Ms M Strydom Audit Committee Member Ms C Shibambo Chief Audit Executive

3. Scope 1.Purpose 2.Background 3.Internal Audit Challenges 4.Overview of Strategic Outcomes 5.Performance against strategic plan 6.Report of the Auditor General 7.Risk Management

4. 1. Purpose To brief the Portfolio Committee on internal audit and compliance monitoring capacity and functioning at the Government Printing Works as at 31 March 2013

5. 2. Background 2009 No Internal Audit Function Advertise position of CAE 2010 Start with recruitment process of CAE CAE appointed August 2010 Five new members of the Audit Committee appointed in November 2010 2011 Audit Committee Charter, Internal Audit Charter and Audit Methodology presented and approved by the Audit Committee Two positions of Internal Audit Specialists filled Annual Audit Plan presented and approved

6. 2. Background 2012 85% of the previous year’s Annual Audit plan implemented 2013 Three year strategic rolling plan and Annual Internal Audit plan presented and approved by the Audit Committee 87% of the Annual Internal Audit Plan implemented Four Internal Audit interns appointed Resignation of key personnel – Internal Audit Specialist 2014 Risk Assessment of GPW conducted by KPMG A risk based audit plan to be developed and presented to the Audit Committee end of May 2013

7. 3. Internal Audit Challenges New ERP systems implemented 01 October 2012 This impacted on the scope of internal audit to be evaluated Lack of approved policies and procedures for audit compliance testing Capacity constraints resulting in audit information requested not provided in time Management responses to audit findings not timely addressed

8. 4. Overview of Strategic Outcomes Monthly risk management compliance / improvement reports Updated Internal Audit policies Approved Internal Audit plan Percentage of Internal Audit plan implemented

9. 5. Performance against Strategic Plan Monthly risk management compliance reports to be generated once the risk assessment is completed The Internal Audit Charter and methodology as well as the Audit Committee Charter are reviewed and updated annually Internal Audit Plan submitted annually at the beginning of the financial year for approval by the Audit Committee 87% of the Internal Audit plan implemented in 2012/13

10. 6. Report of the Auditor General Area of Audit Concern DetailManagement Intervention Status Compliance with laws and regulations The Audit Committee did not review the entity’s compliance with laws and regulations as per the requirements of Treasury Regulations3.1.10(f) as no compliance reports were submitted by management The audit committee will review GPW’s compliance with legal and regulatory provisions during the next financial year. Evaluation of information system environment Internal Audit did not adequately evaluate the effectiveness and efficiency of controls and did not give recommendations for their enhancement and improvement with regard to the information system environment and compliance with significant laws and regulations The current GPW structure did not make any provision for an IT Auditor. The evaluation of information systems requires the expertise and skill of a qualified and experienced IT Auditor. Current establishment does not have such expertise. A decision was taken by management on the advice of the Audit Committee to appoint an IT Audit Specialist GPW is in the process of outsourcing the services of an IT Audit Specialist Risk assessmentNo risk assessment was performed during the financial year under review Risk assessment to be conducted before end of financial year 2012/13 Risk Assessment was conducted in February 2013 by KPMG Monitoring controls There is lack of sufficient monitoring controls to ensure adherence to the internal policies and procedures and for purposes of taking corrective action to address deficiencies in a timely manner in the trading entity

11. 7. Risk Management KPMG was appointed to conduct a comprehensive risk assessment of the GPW Strategic and operational risk assessments took place in February 2013 Risk registers generated A risk-based audit plan for the financial year 2013/14 to be developed