Assessment of Annual Performance Plan 2014/15 Department of Rural Development and Land Reform

1. Assessment of Annual Performance Plan 2014/15 Department of Rural Development and Land Reform 2 July 2014

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. Topics for discussion

4. Audits performed by AGSA

5. Clean administration – from annual audits *Not qualified, disclaimed or adverse opinion

6. 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

7. Legislative requirements - auditing Sections 20(2)(c) and 28(1)(c) of the Public Audit Act (PAA) An audit report must reflect an opinion or conclusion relating to the performance of the auditee against predetermined objectives Applicable to all spheres of government

8. Legislative requirements for planning, budgeting & reporting of performance info Public Finance Management Act (PFMA), 1999 (Act No.1 of 1999) Treasury Regulations issued in terms of the PFMA, 2002 Public Service Regulations (PSR), Part III B: (Only applicable to departments) Guidelines, instruction notes, practice notes, issued by National Treasury Framework for managing programme performance information (issued by the National Treasury in May 2007) Framework for strategic and annual performance plans (issued by National Treasury in August 2010)

9. AGSA strategy to the audit of predetermined objectives 2009/10 to 2012/13 2004/05 to 2008/09 • 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

10. Auditing the planning, budgeting and reporting cycle

11. Audit criteria Main criteria Sub-criteria Existence Compliance with regulatory requirements Timeliness Presentation Measurability Usefulness Relevance Consistency Validity Reliability Accuracy Completeness

12. 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 Test the reported performance information to relevant source documentation to verify the validity, accuracy & completeness of reported performance information 3 4 Conclude on the reliability of the reported performance for selected programmes or objectives 5

13. Audit reporting – Management report An audit conclusion will be prepared and included in the management reports for all departments, constitutional institutions, trading entities, public entities, Parliament and provincial legislatures

14. Audit reporting – Auditor’s report REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS Predetermined objectives Reliability of information: Audit findings focus on the validity, accuracy & completeness of reported performance information Usefulness of information: Audit findings focus on the consistency, relevance, measurability & presentation of reported performance information. COMPLIANCE WITH LAWS AND REGULATIONS Report non-compliance matters in relation to the performance management and reporting processes

15. Assessment of 2014/15 APP – Department of Rural Development and Land Reform AGSA Approach for assessment of 2014/15 Annual Performance Plan • The strategic plan and APP of 2014/15 approved by the Minister and was submitted to the AGSA in March 2014. The approved APP will therefore be audited in detail during the 2014/15 audit. • From assessment of the 2014/15 APP we could verify the consistency of the APP to the overall 2014-2019 strategic plan and to the department’s mandate. • It should be noted that although DRDLR did submit the 2014/15 APP for review no technical indicator descriptions was submitted with the 2014/15 APP and therefore the measurability and relevance of the APP could not be verified. This will only be verified once the technical indicator descriptions have been received. • The 2014/15 interim audit of the final 2014-15 APP will focus on the following: • The process followed for the preparation, submission and approval of strategic plans (if relevant) and APP’s. • Assessment of the measurability and relevance of the indicators and targets planned for each selected programme/objective. .

16. Performance information must be presented using the National Treasury Annual reporting guidelines. Actual performance information in tables and narrative in annual report must be consistent. Reasons for major variances between planned and actual performance must be explained and should be supported by corroborating evidence. Audit of Predetermined Objectives Usefulness of 2013/14 Annual Performance Report Requirement Presentation Conclusion No material findings identified Objectives, indicators and targets must be consistent between planning and reporting documents. Requirement Consistency No material findings identified . Conclusion Indicators should be well-defined and verifiable. Targets should be specific, measurable and time-bound. Requirement Measurability No material findings identified Conclusion The indicators relate logically and directly to an aspect of the institution's mandate, and the realisation of strategic goals and objectives Requirement Relevance No material findings identified. Conclusion

17. Audit of Predetermined Objectives Additional Matter paragraphs included in audit report: Material adjustments were made to the annual performance report submitted for audit No matters reported Reported in audit report

18. Performance information must be presented using the National Treasury Annual reporting guidelines. Actual performance information in tables and narrative in annual report must be consistent. Reasons for major variances between planned and actual performance must be explained and should be supported by corroborating evidence. Audit of Predetermined Objectives Usefulness of 2012/13 Annual Performance Report Requirement Presentation Not all variance explanations could be supported with supporting documentation Conclusion Objectives, indicators and targets must be consistent between planning and reporting documents. Requirement Consistency Changes to objectives, indicators and targets not approved. Reported targets not consistent with planned targets Conclusion Indicators should be well-defined and verifiable. Targets should be specific, measurable and time-bound. Requirement Measurability Conclusion 21% of the performance indicator is not well defined The indicators relate logically and directly to an aspect of the institution's mandate, and the realisation of strategic goals and objectives Requirement Relevance Conclusion No material findings reported.

19. Audit of Predetermined Objectives No Additional Matter paragraphs included in audit report. No matters reported Reported in audit report

20. Audit finding from the 2013/14 audit - Department of Rural Development and Land Reform

21. Audit finding from the 2013/14 audit – Department of Rural Development and Land Reform

22. Audit finding from the 2013/14 audit - Department of Rural Development and Land Reform

23. Audit finding from the 2013/14 audit – Department of Rural Development and Land Reform

24. Common root causes Inadequate training of staff

25. Recommendations and way forward

26. Recommendations and way forward

27. Recommendations and way forward

28. THANK YOU Questions??