Chairperson, colleagues, on behalf of my committee, I wish to present to you our report as a committee on the annual report of the Auditor-General for the period stipulated by the Chairperson.
Before I proceed, I would like to invite this House to join me in expressing our sincere appreciation to the Auditor-General, Mr Terence Nombembe, for the sterling work and the stewardship that he has demonstrated in providing leadership to the institution since he took office in 2006. [Applause.]
I do so because, as you may be aware, his tenure ends in November this year and this might just be the last opportunity for presenting the annual report as well as the strategic plan whilst he is still in office, as I assume that the next round of this kind would happen after he has already left office. I thought it might be opportune, but I hope that this House would think of something more special to express its recognition and appreciation.
I think it is befitting to do so because under his leadership, for example, the institution has continued to grow. Well, firstly, it has achieved the position of being the best supreme audit institution in the world and retained that position for at least the past three years in succession thanks to the leadership that he has demonstrated. [Applause.]
Secondly, I think that there are many other achievements that are not necessarily related directly to the core mandate of the institution, which deserve mention as well. For example, the institution today remains in South Africa the one that produces or contributes to the largest number of rare skills in the form of qualified auditors, chartered accountants and similar skills, which in South Africa are sorely needed for the economic advancement and achieving the core objectives of the country. So, for the institution to have been able to make this contribution, I think it deserves special recognition.
In that regard, one also needs to highlight that the institution has made strides in ensuring that it not only produces these specialised skills, but that in the process it adheres to the country's legislative and policy objectives. These are objectives such as achieving transformation through its internal trainee auditor scheme; through awarding contract work to audit firms from historically disadvantaged backgrounds; and through assisting certain universities like the University of the North and the University of Fort Hare, which historically have not been able to meet the standards of producing qualified charted accountants and auditors. It ensures that we transform our education system by assisting those institutions that were on the periphery to qualify to contribute towards the skills development of the country in a meaningful way.
To that extent, I think that their contribution has gone far beyond their core mandate as stipulated in the Constitution and has sought to actually further the broader objectives of the country as a whole.
The report has a recommendation that is the primary recommendation and that is to request this House that we approve the surplus that has been accumulated by the institution. It was targeted at 3,8%, but it actually became 4,8%. We think that it is at the level of R99 million. We think that it is useful to be retained in the institution, so as to further enhance its financial sustainability.
I just wanted to remind us that, three or four years ago, you would recall that the institution had to obtain a bail-out from the Minister of Finance of this House, as they went short of their budget. But, since then, the institution has ensured that in their budgeting and in the way in which it manages its resources, it continued over the past two or three years in succession to achieve surpluses and make savings so that it remains self- sustainable. It had done this despite challenges such as bad debt and certain auditors failing to meet their obligations towards the institution, like some of the struggling municipalities.
I also want to highlight the fact that the institution had to go way beyond its mandate in some instances ...
Hon member, your time has expired.
... to capacitate auditors to enable them fully to comply with the prescripts in terms of the law. So, to that extent, I would want to commend the report of the Auditor-General. Thank you.
Chairperson, there are no objections, but the DA requests an opportunity to make a declaration.
The DA is requesting a declaration. May we request political parties in future to just alert the NA Table so that it can ensure the smooth flow of proceedings in the House when declarations are to be made?
Chairperson, the programme committee was alerted of this yesterday and today - the Chief Whips yesterday and Programme Committee this morning.
There was no debate.
Adv A H GAUM, on behalf of the Chief Whip of the Majority Party, I move:
That the Report be adopted.
Declarations of vote:
House Chair, we join hands with the committee chairperson in congratulating the current Auditor-General, Terence Nombembe, and his department on setting what can only be regarded as a very good example, by receiving their excellent, clean audits. They provide this example to the many municipalities that they go out to audit, and it would be great if the Department of Co-operative Governance and Traditional Affairs, Cogta, could eventually get its act together and also set an example like this.
We must not underestimate the importance of the role that the Auditor- General plays in fulfilling the constitutional mandate for oversight, accountability and, most importantly, to build public confidence in our government and our structures. In order to foster this public confidence requires not only for the report to be made, but for action to then be taken upon those reports. I think it is incumbent on Parliament itself to ensure that the reports of the Auditor-General are taken very seriously and that there are concrete action steps taken to ensure that the recommendations and findings are dealt with comprehensively. Far too often these reports just simply go away and disappear.
We also welcome the Auditor-General's reports and his work done on performance against predetermined objectives, which is a very useful tool for members to hold government to account. We noticed with some dismay in the committee that 74% of all arrears owed to the Auditor-General are from municipalities that cannot afford to pay for these services, and we think this needs to be given some very, very serious attention.
We support the retention of the surplus within the department and hope that it is going to be ploughed into assisting the Auditor-General to further the work that they are doing. We believe that it is incumbent upon all of us in this House - not only the members of the Standing Committee on the Auditor-General, Scoag, and the Standing Committee on Public Accounts, Scopa, but across all committees - to vigorously defend the independence of the institution of the Auditor-General ... [Interjections.] ... so that we can continue to hold government to account and ensure that the taxpayers and citizens of this country are getting real value for money. Thank you. [Interjections.]
Thank you, hon member. Since there were no objections, the report is agreed to.
Chairperson, the practice is that once a declaration is made, then the other parties are also given an opportunity, and I know that the hon Koornhof and hon Singh are also ready to participate. Thank you.
Hon members, I will repeat what I said earlier. Please alert the NA Table so that I am aware of those declarations as well. I will allow the declarations to be made.
Thank you, Chairperson. I rise on behalf of Cope because it is important to support the Auditor-General. The problem is that he always reports on what went wrong in the past, and the value of that is that one hopes it will be rectified by the affected department or municipality. The sad news is that it is simply not happening.
The fact that departments and municipalities are very slow to pay outstanding fees to the Auditor-General shows the level of disrespect some have for this institution. Maybe it is time to follow the Austrian model, where these services are paid for by the national government, adding to that some more powers to make sure that the same mistakes do not occur every year. We support this report. [Applause.]
Thank you, Chairperson, and my apologies for the late notice. I was only told five minutes ago that I had to respond. I want to echo the sentiments of the chairperson of our committee in congratulating the Auditor-General, Mr Nombembe, on the excellent work that he and his office do for us as civil society.
Recently, we were in Austria with our committee and we were amazed at the kind of respect that the Auditor-General of South Africa has internationally. I think we can be very, very proud that Mr Nombembe carries out his duties in such an exemplary manner, not only in South Africa, but also outside South Africa.
One always marvels at the quality of the work produced by the office of the Auditor-General but, as other hon members have said, I think we need to take very, very seriously the outcomes, resolutions and recommendations of the audit reports. If one looks at the Public Finance Management Act, you will find that there are many ways in which the transgressors - people who do not follow the rules and regulations of basic accounting - can be held accountable and even dismissed, if necessary. That is where we are lacking.
The nonpayment of approximately R263 million from national departments for 15 days, the R206 million from local government and R58 million from other statutory bodies is a matter of concern, and hopefully some day we could have a more extensive debate here, as other hon members have said, about how Parliament could support this institution so that we don't have municipalities that really cannot afford audit fees, and do not have proper audits done. We really need to look into that particular aspect. However, on behalf of the IFP, we support the one recommendation that we have made with regard to retaining the surplus. Thank you.
House Chair, before I deliver my declaration, I want to dedicate it to Ms Reeva Steenkamp. As a woman in this country who was still young, she deserved to live life to the full. May her soul rest in peace.
I want to join the chairperson in thanking the Auditor-General for the contribution that he has made to the Republic of South Africa. During briefings that we had with the Auditor-General, we noted that the audit committee was satisfied with the fact that the Auditor-General of the Republic of South Africa led by example. They emphasised that he actually paid a lot of attention to smaller details.
When we visited Austria, we were impressed by the fact that the world holds our Auditor-General in high esteem. We are also taking this opportunity to thank the South African Parliament for having allowed the Auditor-General the independence that befits his office. I thank you. [Applause.]
Motion agreed to.
Report accordingly adopted.