Madam Chair, I am very thankful to have this opportunity to say a few words about public accounts. The work of the public accounts committee has an impact on service delivery. There are 58 reports before us to be confirmed and adopted by this House, starting from the 85th report to the 143rd report. The following fact sheet provides an overview of some of the Scopa reports for the 2006 financial year. All of the entities highlighted in these reports received unqualified audit opinions with no significant matters of emphasis during the year 2005-06. That is very important.
I think one finds that for many years we have had so many reports that were qualified. Some of us who are not used to books of accounts become so happy when we say something is qualified and think that we have done well. In the transactions of books when we talk about qualification it means you have done badly. So most of them normally come with a disclaimer and all of that, but today there is no disclaimer. As a common procedure within the committee there is a standard resolution for all such entities. In the resolution the committee notes the receipt of the annual reports and financial statements for the year under review, and acknowledges the unqualified audit report that the entity receives.
The audit opinion, however, is made from the financial management and regularity point of view, and it is by no means an opinion of the overall performance of the entity, meaning that service delivery is included. It is in this light therefore that the committee brings its report to Parliament, and commends the entities on their performance. This also means that no further interaction with the entity concerned is warranted as they have received unqualified audit opinions with no significant matter of emphasis on issues mentioned. This applies to all 59 reports.
The work of Scopa is not merely about ensuring proper financial management in government, the department and public entities. Scopa's oversight role is important to service delivery. Scopa seeks to ensure improved service delivery by focusing in those areas of poor financial management that are hampering the effective use of the millions of rands annually voted by Parliament to the various departments for them to provide service delivery. By reviewing more than 260 annual reports every year and by holding public hearings nearly every week that Parliament is in session, Scopa examines the financial management performance of departments and entities.
By explaining the following key elements of effective financial management we can assess the ability of the department to manage its finances and conclude whether the department is at an adequate level of financial management to provide a proper environment for effective service delivery. The elements we look at are, firstly, the element of proper controls because without proper controls funds and other assets are not protected or resources properly controlled. Without controls, there is no certainty that the programme of departmental objectives will be achieved or would be sustainable.
Nearly every report of Scopa over the last few years has made recommendations about the improvement of internal controls, and I am glad to tell you that the reports of the Auditor-General indicate that government departments have been showing steady progress in establishing proper controls.
Scopa also examines the quality of financial management information, and determines whether the availability of the management information is reliable or used by the department to get the best out of their resources. Without good management information a director-general is like a blind man. It will be very difficult to make government more businesslike if stronger management information is not well integrated into day-to-day management. Good progress has been made in this area, but Scopa will keep on monitoring it.
A last financial management focus area that Scopa examines is the strategic planning, and how it is linked to resources. In setting strategic targets or objectives and ensuring that these are achieved, and enabling departments to provide the service delivery that they are established for, Scopa has found that a higher number of strategic plans do exist, but they are not always sufficiently linked to resources. Strategic plans also go hand in hand with proper budgeting. Reporting to Parliament on performance will become more and more important as Parliament improves its oversight of service delivery performance.
The annual report promises to become the main accountability mechanism in the hands of the legislature. Scopa therefore seeks to ensure improvement of financial management systems that will enable government to provide quality services. I want to state that we would not be effective without the assistance of an independent Auditor-General, and we welcome the improved legal framework established by the Public Audit Act, which enables the AG to do his or her work even better.
As stated previously, the work of Scopa is not mainly about financial savings, but about ensuring improved service delivery. This is critical, because in the private sector bad service results in more business for competitors. In the Public Service, however, there is simply no alternative.
I am told that Scopa members have a poor reputation as senior public servants, as we are seen as being aggressive. The ANC proposed the adoption of this report. Thank you very much. [Time expired.][Applause.]