Presentation to Joint Standing Committee on Financial Management: Audit Action Plan
The Audit Action Plan is a crucial annual development to address issues raised by the Auditor-General, guiding the Secretary to Parliament in fulfilling responsibilities under the FMPPLA. The process involves consolidating findings, analyzing deficiencies, root cause analysis, consultations, and finalizing actions. Key audit findings cover compliance areas such as laws, trade payables, employee benefits, heritage assets, and more. Specific management actions and target dates are outlined to address findings, ensuring adherence to regulations and efficient financial management.
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Presentation to the Joint Standing Committee on Financial Management of Presentation to the Joint Standing Committee on Financial Management of Parliament: Audit Action Plan Parliament: Audit Action Plan 1
Context Context The Audit Action Plan is developed annually to assist the Secretary to Parliament to fulfil her responsibilities in terms of Section 61 of the FMPPLA which requires that the Accounting Officer must: a) promptly address any issues raised by the Auditor-General in an audit report; and b) advice the Executive Authority of the steps taken to address the issues. 2
Action Plan development process Action Plan development process a) Upon finalisation of annual AGSA audit, audit findings are consolidated into one tracking sheet (usually in August). b) Analysis of internal control deficiency as identified by the AGSA. c) Root-cause analysis for each finding raised. d) Consultation with Audit Task Team, relevant line managers and the Management Team. e) Finalisation of agreed actions (usually mid September). 3
Summary of audit findings Summary of audit findings Findings per AGSA focus area 3 2 2 2 2 1 1 1 Compliance with laws and regulations Trade Payables Employee (MPs) Benefits Heritage Assets Human Resource Management Contract Management Audit of predetermined objectives ICT Controls 4
Compliance with laws and regulations Compliance with laws and regulations No. Audit Finding Management Action Target Date Responsibility 1. The annual financial statements were not submitted for audit by 31 May 2020 as a result of the lack of mobility of staff members during the nationwide lockdown. a) The Constitutional and Legal Services Office (CLSO) provided legal advise on effecting s65(q) read with s65(6) of the FMPPLA. As part of this draft regulations have been prepared for issuing by the EA for approval by Parliament. b) The business continuity plan to include steps to activate responses for national disasters in line with the lessons learned from the pandemic. Implemented ASTP 30 May 2021 2. Invoices paid in excess of 30 days a) Division Managers monitor the payment of invoices on a monthly basis. b) The invoice age analysis dashboard is presented to the ASTP monthly for timely corrective action. Monthly a) Division Managers b) Unit Manager: Financial Accounting 5
Trade payables, employee benefits & assets Trade payables, employee benefits & assets No. Audit Finding Trade Payables Management Action Target Date Responsibility 1. A system of review on a monthly basis to reconcile the invoice number captured per the accrual listing to the invoice received from the relevant supplier s/service providers implemented. Monthly ASTP Invoice number incorrectly recorded on the accruals listing when compared to the actual invoice inspected as audit evidence. has been Employee Benefits 2. a) Management will validate database records to exclude Members who passed away. b) Management is in the process of establishing a relationship with the Department of Home Affairs to facilitate verification against the relevant database. 31 Mar 2021 Manager: Members Facilities Deceased Members (ordinary, Ministers and Deputy Ministers) included in the list provided for the actuarial employment travel benefits. valuation for post- Heritage Assets 3. a) Management has implemented the Best Practice Controls for Asset Management as issued by the AGSA. b) The Business Units in charge of assets to perform asset verification to ensure adequate verification of all assets and accuracy of the Asset Register. c) Asset Management function to review the quality of the asset verification on a sample basis. Implemented Library Unit Unit Logistics, Fixed Asset Disposals Manager: Assets were found based on their description, however the asset barcode differed to the asset number on the asset register. 31 Mar 2021 & 6
Human Resource Management Human Resource Management No. Audit Finding Human Resource Management Management Action Target Date Responsibility 1. a) The group life and acting allowance line items were removed from basic salary and disclosed separately. Note 39.5 was also updated in respect of classifications for prior period and Note 22 amended. Implemented Unit Manager: Financial Accounting Acting allowance and group life benefit incorrectly classified as basic remuneration in note 22 of the annual financial statements. b) The reviews of mapping will be performed to ensure accuracy in terms of the nature of the expense in the notes to the financial statements. 31 Mar 2021 Leave liability misstatement 2. The Procedure Manual will be updated to cater for the leave transfer. 31 Mar 2021 Human Resource Executive Lack of approved policy on retainment of work experience (annual leave entitlement) by employees who transfer from government entities to Parliament. The HR Policy Manual which was approved on the 30 October 2018 is silent on these conditions. 7
Contract Management Contract Management No. Audit Finding Management Action Target Date Responsibility Suppliers declarations at the time of the award. supplied false/ incomplete 1. Management will ensure that procurement files are readily available and include evidence of the verifications performed during the procurement processes. b) Recommendations will be made, as part of the review of FMPPLA, to include a measure to prohibit public servants from doing business with Parliament. c) Consideration is being made for all TOR for RFQs and Bids to include a clause meant to prevent public servants from participating. a) 31 Mar 2021 Section Manager: SCM Persons in the employ of the State participated in bidding for the contracts awarded by Parliament. Incomplete contract register. 2. The SOP on contract management to be updated to stipulate thresholds that will assist in determining whether a contract should be recorded in the contract register. 31 Mar 2021 Unit Manager: Strategic Sourcing & Acquisitions Lack of a contract register for decentralised contracts. 8
Audit of predetermined objectives Audit of predetermined objectives No. Audit Finding Accuracy of actual performance Management Action Target Date Responsibility 1. a) Workshops were held with data capturers and handlers within Divisions to improve the format and quality of data for usability. As part of this, technical descriptors were re- visited to ensure that data limitations, e.g. verbal requests are documented where applicable. Implemented Analyst: Monitoring & Evaluation The actual achievements as reported in the annual performance report (APR) does not agree to the totals per the listings which were provided to support the actual achievements reported in the APR for the following indicators. b) Performance established to ensure adequate preparation of data for reporting (monthly, quarterly, mid- year and annual). Data Forum has been House Paper: Percentage available on sitting days; Procedural advice: Percentage within 7 day average; Policy Advice: Percentage within 7 day average; Minutes: Percentage within 3 days; and Translation: Percentage within agreed time. 9
Audit of predetermined objectives ( Audit of predetermined objectives (cont cont ) ) No. Audit Finding Management Action Target Date Responsibility Accuracy of listings provided 2. a) Workshops were held with data capturers and handlers within Divisions to improve the format and quality of data for usability. As part of this, technical descriptors were re-visited to ensure that data limitations, e.g. verbal requests are documented where applicable. Implemented Analyst: Monitoring & Evaluation Some of information as per the listings did not agree to the supporting documentation provided to support the listings for the following indicators: 2.1c Legal Advice 100% within 7-day Average 2.1e Research 95% within time Allocated 2.1f Information Requests 95% within time Allocated 2.1g Minutes 90% within 3 Days b) Performance Data Forum has been established to preparation of (monthly, quarterly, annual). ensure data adequate reporting for mid-year and 10
Audit of predetermined objectives ( Audit of predetermined objectives (cont cont ) ) No. Audit Finding Management Action Target Date Responsibility Inadequate evidence provided 3. a) Workshops were held with data capturers and handlers within Divisions to improve the format and quality of data for usability. As part of this, technical descriptors were re- visited to ensure that data limitations, e.g. verbal requests are documented where applicable. Implemented Analyst: Monitoring & Evaluation The evidence that was provided for some indicators was not sufficient for audit purposes. The information received as evidence did not substantiate the information per the listings provided by certain Divisions to support the actual performance reported in the annual performance report. The following indicators were affected as a result of unconventional request methods: b) Performance established to ensure adequate preparation of data for reporting (monthly, quarterly, mid- year and annual). Data Forum has been 2.1d Policy Advice 100% within 7-day Average 2.1f Information Requests 95% within time Allocated 2.1k Translation % within Agreed Time 11
Information Technology Controls Information Technology Controls No. Audit Finding Lack of formal documentation of physical access and environmental controls for the server room Management Action Target Date Responsibility 1. a) The schedules equipment in the server rooms will be developed in collaboration between Facilities Management and ICT. b) Develop and approve SOPS on roles and responsibilities in relation to the server rooms. planned preventative the maintenance 31 Mar 2021 Section Manager: HH and Section Manager ICT for infrastructure and Physical access and environmental controls were in place at the server room, it was noted these controls were not included in any policy or supporting procedures documentation. Non-compliance to user access rights review procedure 2. a) ICT will enable the alert notification to be sent 10 days before the 90-day compulsory verification to the business responsibility owners, line managers and the Division managers. b) The Standard Operating Procedure will also be amended to reflect the 80-day period. c) Inform the Accounting Officer timeously of possible pending non-compliance to ensure corrective steps. Implemented Unit Manager: ERP Support As previously reported, it was noted that 12 of the responsibility owners within the business did not timeously perform the reviews of user access rights within 90 days of their previous review, as required by the SOP. Implemented Unit Manager: ERP Support Quarterly CIO 12
Monitoring and follow Monitoring and follow- -up up a) Progress on the implementation of actions is monitored and reported quarterly to the AO and Audit Committee. b) A detailed follow-up audit is performed by Internal Audit during the 3rd and 4th quarter to independently assess effectiveness of Management actions. 13
