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Social Security Cluster 11 October 2011 Presented by: Abrie Adendorff Senior Manager AGSA

Audit Outcomes 2010-11. Social Security Cluster 11 October 2011 Presented by: Abrie Adendorff Senior Manager AGSA. Reputation promise/mission.

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Social Security Cluster 11 October 2011 Presented by: Abrie Adendorff Senior Manager AGSA

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  1. Audit Outcomes 2010-11 Social Security Cluster11 October 2011Presented by: Abrie AdendorffSenior Manager AGSA

  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. PART 1 The purpose of the briefing note is to provide an insight by the Auditor-General South Africa into the issues resulting in the audit opinion on the financial statements of the Department of Social Development (DSD), the South African Social Security Agency (SASSA) and the National Development Agency (NDA). The mission of the Department is to ensure the provision of comprehensive social protection services against vulnerability and poverty within the constitutional and legislative framework, and create an enabling environment for sustainable development. The Department further aims to deliver integrated, sustainable and quality services, in partnership with all those committed to building a caring society. Introduction

  4. The Activities of the Department The activities of the department are organised under the following five programmes:

  5. The Social Development portfolio consist of the following entities: • Department of Social Development (DSD) – Vote No. 18 • South African Social Security Agency (SASSA) • National Development Agency (NDA) • Funds under the umbrella of DSD • Disaster Relief Fund • Social Relief Fund • Refugee Relief Fund • State President fund • High School Vorentoe Disaster Fund (closed 26 August 2010)

  6. Funding of the entities • Department of Social Development – Budgeted amount 10/11 – R95 941 061 000 • (included in this amount is the amount for households – R87 492 902 000, programme 2 : • Comprehensive social security, that is transferred to households by SASSA on behalf • of the Department) • National Development Agency – R83 469 000 (transferred from DSD) • SASSA – R5 631 387 000 (transferred from DSD) • Funds – these funds are dormant and no funds are transferred to it

  7. Summary of audit opinions

  8. Audit Outcomes 2010-11 Summary of audit opinions

  9. PART 2Audit outcomes 2010-11

  10. Audit outcomes 2010-11 - continues

  11. Audit outcomes 2010-11 - continues • The other entities within the Social Security Cluster had no audit qualifications • in the prior two years: • - The National Development Agency • - Disaster Relief Fund • - Social Relief Fund • - Refugee Relief Fund • - State President fund • - High School Vorentoe Disaster Fund

  12. 2010-11 QUALIFICATION ISSUES • The Department of Social Development • The Department has been qualified on Transfers and Subsidies due to limitations placed on the audit by its agent, SASSA. • Transfer to Households: • 2762 Grant beneficiary files were selected for audit purposes. • 42 Files representing 1.52% of the sample were not presented for audit or did not contain sufficient information necessary for the beneficiary to receive the grant.. • This extrapolated to the population based on grant type and province amounted to a total scope limitation on the audit of R891 039 788,09. (2009-10 – R10.5 billion)

  13. 2010-11 QUALIFICATIONS The South African Social Security Agency SASSA received an unqualified audit opinion for the 2010-11 financial year. SASSA has had a disclaimer audit opinion for 2009-10 financial year and had an unqualified audit opinion for the 2008-09 financial year. The National Development Agency The NDA has had an unqualified audit opinion for the prior 2 years and for the 2010-11 financial year. The 5 DSD Funds All the funds have had unqualified audit opinions for the prior 2 years and for the 2010-11 financial year.

  14. Other Audit Report Matters Emphasis of Matter Department of Social Development Emphasis of matter issues were included regarding the flow of funds model between the department and SASSA. South African Social Security Agency Emphasis was brought to the attention of users that various financial statement items were restated due to the correction of prior period errors. It was further emphasised that SASSA had material impairments of debtors to the amount of R3 774 287, (2009/10 – R63 922 862). The prior year impairment was done as part of the restatement of corresponding figures. National Development Agency Emphasis was brought to the attention of users that the accumulated surplus for 31 March 2010 has been restated as a result of an error discovered during the year ended 31 March 2011 in the financial statements of the NDA.

  15. REPORT ON OTHER LEGAL AND REGULATORY REQUIRMENTS The following findings were identified on PREDETERMINED OBJECTIVES:

  16. REPORT ON OTHER LEGAL AND REGULATORY REQUIRMENTS The following findings were identified on COMPLIANCE WITH LAWS AND REGULATIONS:

  17. INTERNAL CONTROLS • Department of Social Development • Leadership • Due to the legislative reporting lines, the oversight responsibility fulfilled by the Department does not focus on the detail of the operational function performed by its agency, SASSA, which cascades down to the management of SASSA and its operational staff.   • Management did not ensure proper guidance to ensure that there’s a logical link between reported objectives, indicators and targets to ensure that reported performance targets are specific and measurable. • Financial and performance management • Management did not ensure that there was sufficient oversight over the tabled strategic plan to ensure that it complied to Treasury Regulation 5.2.2(d) and Framework for managing programme performance information (FMPPI) 5.2.7. • South African Social Security Agency • Financial and performance management • Management did not implement proper record keeping in a timely manner to ensure that complete, relevant and accurate information is accessible and available to support financial and performance reporting. • National Development Agency • Leadership • The performance of the entity is not measured against predetermined objectives, indicators and targets as required by the PFMA.

  18. OTHER REPORTS Department of Social Development A performance audit is being conducted on the readiness of Government to report on it’s performance. The findings thereof, will be reported in a separate report.

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