Mandate of SCoAG and Parliamentary Environment within which it operates

1. Mandate of SCoAG and Parliamentary Environment within which it operates Presented By Adv M Masutha Chairperson of SCoAG 30 March 2010

2. Purpose This presentation addresses the following main points: The constitutional values that underpin the concept of oversight and accountability and the purpose they serve in a democracy; Mechanism that are put in place to realise the constitutional obligation of parliamentary oversight; Analysing the way in which Parliament can ensure accountability of the constitutional institutions such as the Office of the Auditor-General (OAG) while at the same time respecting their independence. The effective oversight requires that Members of Parliament to fully understand the constitutional justifications and rationale behind accountable government. Therefore, oversight helps to promote the constitutional values of accountability and good governance.

3. Overview • The National Assembly provides for mechanisms to ensure that all organs of state are accountable to it. • The parliament of South Africa exercises its oversight and accountability function through the Portfolio Committees, which are regarded as the engine rooms of Parliament. • These Committees have various oversight tools including briefing sessions, annual reports analysis, calls for submissions and petitions from the public, the consideration of strategic plans and annual reports, and public hearing. • However, there are also Standing Committees which among others include the Standing Committee on Public Accounts (SCoPA) and Standing Committee on Auditor-General (SCoAG). • The Standing Committee on Public Accounts deals with the financial accountability of all organs of state.

4. Overview continues • The financial accountability is the critical component of good governance. Good governance is at the core of a democratic society. • Accountability constitute the process that the democratic governments must explain or justify what they have done or failed to do. • In principle, the political accountability on the other hand it checks the power of political leaders, preventing them from ruling in an abusive manner. It also helps governments to operate effectively and efficiently. • The Standing Committee on Auditor-General (SCoAG) deals with both financial and legislative accountability, therefore SCoAG needs a collaborated oversight with both parliamentary Committees including Standing Committee on Public Accounts.

5. Introduction • Section 55 (2) of the Constitution prescribes that the National Assembly must provide for oversight mechanism, to ensure that all organs of state in the national sphere of government are accountable to it and maintain oversight over the executive and constitutional institutions. • However, the Constitution does not state clearly that the National Council of Provinces (NCOP) is required to perform an oversight function. The NCOP oversight role is limited to issues which affect provinces on a national and intergovernmental relations; • Therefore, the Standing Committee on Auditor-General (SCoAG) has no oversight relationship with the Select Committees; • Accountability constitutes the process that compels the government and constitutional institutions to explain and justify their actions;

6. Intro. Continues • There are two types of accountability that are: political and financial accountability; • Political accountability is a cornerstone of functioning democratic system and can be described as an obligation of political leaders to answer to the public for their actions and decisions; • Financial accountability constitutes the process that the democratic government must explain or justify what they have done with the public funds. It is the critical component of good governance, which is core of any democratic society.

7. SCoAG Role in Relation to Portfolio Committees and SCoPA • Section 2c(i) of the PAA requires SCoAG to assist and protect the AG in ensuring its impartiality, independence, dignity and effectiveness. • The effectiveness of AGs work can be witnessed through the improvement of financial management regime of state institutions. • This can be achieved through full implementation of AG’s recommendations. • Parliamentary committees can play an important role in ensuring that AG’s recommendations are implemented through their oversight and follow-up mechanisms. • SCoAG should lobby and collaborate with other parliamentary committees in promoting a culture of following up AG’s recommendations to encourage their timeous implementation. • Accountability operates where a relationship exists in which an individual or body, and its performance of functions are subject to other oversight, direction or request that it provides information on its actions or justify those actions.

8. Accountability and Independency of Auditor-General • Constitutional institutions such as Auditor-General support Parliament in accomplishment of its oversight function; • The independence of AG is Constitutionally guaranteed and explored from two perspectives, that is: financial and administrative; • The Constitution also fosters the accountability of the Chapter 9 institutions without encroaching their right of independence; • Section 181 (2) of the Constitution guarantees the independence and impartiality of the Auditor-General.

9. Accountability Cont. • Financial independence implies the ability to have access to funds that are reasonably required to perform the constitutional obligation; • Central to financial independence is the funding model of the OAG and its sustainability thereof; • However, this does not mean the Auditor-General can independently set up its budget, the National Assembly (SCoAG) must consider what reasonably required funds in the light of national interest; • Administrative independence is the ability of the Office of the Auditor-General to perform its functions without administratively controlled by the executive or any organ of state; • Administrative independence of the Auditor-General implies control over matters that are directly connect with the functions that such institutions must perform.

10. 1 2 3 Oversight and Accountability Process Auditor General Executive Audits and reports on accounts, financial statements and financial Designs and implements government policy. management of state institutions. Assists Parliament on its oversight responsibility though financial scrutiny Funds are assigned for policy implementation 4 Citizenry Parliament Entitled to know the actions of government Exercise oversight over the Executive and state organs The AG assist oversight function through audit reports

11. Legislative Mandate of SCoAG • Section 55 (2) of the Constitution establishes the Standing Committee on Auditor-General (SCoAG) as mechanism of oversight; • Section 2(c)(i) of the Public Audit Act 25 (2004) requires SCoAG to assist to and protect the Auditor-General in ensuring its independence, impartiality, dignity and effectiveness; • The Constitution recognises the independence of the Auditor-General, subject only to the Constitution and the legislation.

12. Thank you……..