1. 22/10/20151 CHAIRPERSON FOR FINANCE COMMITTES AG’S ACTION PLAN DATE: 29 MAY 2012

2. PURPOSE Role of council and audit committee in the action plan To provide the status of municipalities in terms of implementation of the action plan 2

3. ACTION PLAN Audit committee will have to check the progress on the implementation of the action plan. The committee is responsible for providing advice/ recommendations to Council Based on the issues raised by AG, finance committee can monitor or play an oversight role by analysing reports (e.g. sec 71, quarterly reports, etc) tabled in Council for the current financial year Chairperson of finance can request a report on the progress on implementation of AG’s Action plan 3

4. Action Plans to Address Findings 4 MunicipalityNumber of findings No of findings addressed No of findings outstanding Percentage addressed Capricorn3728976% Polokwane73284538% Blouberg6285413% Aganang813784% Lepelle-Nkumpi Action plan not ready as the AGSA is currently finalising the management letter and audit report with the municipality Molemole69442564% Mopani27111641% Ba-Phalaborwa46 Tzaneen100 Maruleng24111346% Giyani85 Letaba40241660%

5. Action Plans to Address Findings 5 MunicipalityNumber of findings No of findings addressed No of findings outstanding Percenta ge addresse d Waterberg10 Mogalakwena20 Mookgophong107248322% Modimolle60 Bela 102 Lephalale62322752% Thabazimbi57 Sekhukhune85 Fetakgomo30 0100% Makhuduthamaga86147216% Tubatse Elias Motsoaledi65125318% Ephraim Mogale3182326%

6. Action Plans to Address Findings 6 Municipalit y Number of findings No of findings addressed No of findings outstanding Percentag e addressed Vhembe45271860% Mutale Thulamela53260% MusinaAction plan not developed Makhado56263046% PT developed a Provincial standardised action plan to be used by municipalities. 28 municipalities developed action plans which have been reviewed by the Audit Committee. Of 28 submitted action plans 17 have reported progress

7. Challenges on implementation of the Action Plans Audit steering committees not functional throughout the year Internal Audits not reviewing the implementation of audit action plans timeously Root causes not properly identified Management not attending all audit steering committee meetings High vacancy rate / Inappropriate appointment Lack of technical skills ( GRAP Standards) 7

8. Audit Outcomes per District 8

9. 9

10. Concerns and Challenges 10 1.Lack of timely submission of requested information 2.Lack of supporting documentation to support balances 3.Availability of key personnel such as the following – CFOs – Section 54, 56 and 57 managers – Finance personnel – Technical Services personnel – Human resource personnel 4.Lack of knowledge and understanding of accounting standards 5.Expectations of the auditors to identify and correct misstatements 6.High reliance on consultants to do work on behalf of municipal employees

11. Concerns and Challenges 11 7.Lack of monitoring and review of work done by consultants 8.Lack of monitoring and review by managers and heads of departments 9.Action plans on prior year findings drawn up for compliance purposes, recommendations not implemented 10.No action plans on IT findings and it doesn’t seem to be taken seriously, because there is a perception that it does not affect financials 11.MFMA Circular 50 and presentations made to CFOs on ideal audit file not adhered to 12.Commitments made by management on addressing control weaknesses as per key controls not done

12. Concerns and Challenges 12 13.Management does not see the value of a fully fledged internal audit department 14.Numerous non compliances with SCM policy and PPP 15.Reporting on pre-determined objectives not taken seriously 16.Lack of knowledge and understanding on how to report on pre-determined objectives 17.Non adherence to SLA’s with regard to water related services 18.Lack of constant monitoring and ensuring the correctness of transferred balances with regard to water related transactions 19.Financial systems that are unreliable, differences between trial balances and AFS

13. 13 Thank you