1. DEPARTMENT OF PUBLIC WORKS PRESENTATION TO THE PORTFOLIO COMMITTEE RISK MANAGEMENT AND FRAUD PREVENTION STRATEGY 24 August 2005 PRESENTED BY:Ms. Z. Mxunyelwa, ACFE, CIA Chief Audit Executive - DPW

2. INTRODUCTION Development of a comprehensive plans for 2004 to 2007 Adoption – 31 July 2004 –Management Committees –Audit Committee –Office of the Auditor General [Acceptance] Annual revision of critical and emerging risks [Until 2007] Revised comprehensive plan – April 2007 RISK MANAGEMENT AND FRAUD PREVENTION STRATEGY

3. FRAUD PREVENTION PLANS [2004 – 2007] Prevention Plan/Capacity Fraud and Corruption Risks Code of Conduct Fraud Policy and Response Plan Implementation Plan FRAUD PREVENTION STRATEGY RISK MANAGEMENT AND FRAUD PREVENTION STRATEGY

4. RISK MANAGEMENT PLAN Risk categories StrategicStrategic FinancialFinancial TechnologicalTechnological OperationalOperational Fraud and corruptionFraud and corruption RISK MANAGEMENT AND FRAUD PREVENTION STRATEGY

5. STRATEGIC CHALLENGES Mandate of the Department Co-ordination between DPW and other government structures Corporate Governance Government’s Role Communication Strategy RISK MANAGEMENT PLAN 1. CHALLENGES

6. FINANCIAL CHALLENGES Internal Controls Financial Management Financial Resources RISK MANAGEMENT PLAN

7. TECHNOLOGICAL CHALLENGES IT Governance Policies Business Continuity Loss of Data Data Integrity Access Controls RISK MANAGEMENT PLAN

8. OPERATIONAL CHALLENGES Service Delivery Asset Management BEE initiatives and implementation Legislation Implementation Expanded Public Works Program HR Strategies Lawsuits against DPW RISK MANAGEMENT PLAN

9. FRAUD AND CORRUPTION CHALLENGES Organizational Culture Tender and Procurement, including fronting Payroll Theft Abuse of State Assets RISK MANAGEMENT PLAN

10. DPW White Paper – 1997 Public Finance Management Act, 1999 State Properties Maintenance Backlog Cooperation by Client Departments Nature of Operations Inadequate Financial Resources Government Information Technology Systems Public Sector Environment RISK MANAGEMENT PLAN 2. CAUSES/SOURCE

11. Implementation of the 1997 White Paper Initiatives –Improved Service Delivery –Devolution of budgets to client department Effective communication of the Leadership Way Personnel Development and Training Revised Organizational Structure –Decentralization of Functions –Capacity Building in Regions Service Delivery Improvement Development of New Business Processes RISK MANAGEMENT PLAN 3. CONTROL STRATEGIES

12. CONTROL STRATEGIES (cont.) Service Level Agreements with Client Departments Consultation with stakeholders on Policy Development Information improvement on the asset registers Proactive disposal programs Development of IT Policies and DRP Improved Financial Management & Controls Coordination & improved communications with AG Office Capacity building of the Internal Audit Activity Fraud Awareness Workshops and Training Measures to address fronting – BEE verification and on-site monitoring RISK MANAGEMENT PLAN

13. 4. TIME FRAMES RISKSTIME FRAMES Critical/High Risks Annual Emerging Critical Risks July 2004 to March 2006 Medium Risks Annual Emerging Critical Risks April 2005 to March 2006 Low Risk Annual Emerging Critical Risks April 2006 to March 2007