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 ...