Introduction
Today is the day that will be recorded in the history books as an archive of ideas, proposals and suggestions from our stakeholders. I refer to my talk today as an archive of ordinary South Africans because as a department we have consulted with stakeholders and sister departments on matters that affect our communities.
Honourable Ministers, Premiers, MEC's, Members of Parliament, Members of Provincial Legislatures, Honorable, Mayors and Councillors, Traditional Leaders
Auditor-General, Mr Terence Nombembe
Accountant-General Mr Freeman Nomva
Senior officials, in all three spheres of government
Members of the media
Ladies and gentlemen
We are launching Operation Clean Audit 2014 today but what matters the most to me is how to address the needs of our people through clean audits. What matters most to me and to ordinary South Africans is how an audit query is addressed, in a sustainable way, to improve service delivery.
Ladies and gentlemen, last month, as a department we held a stakeholder Legkotla to discuss matters that affect our service to South Africans. Starting a few months ago, my senior officials visited provinces to discuss 'Operation Clean Audit 2014' with our counterparts, including offices of the Auditor-General, both national and provincial. The provincial visits are still on-going. Just a few days ago, we met with some government entities and the private sector, including South African Banks, with the aim of strengthening our private public partnerships and also share information about operation clean audit'.
Just yesterday, both I and the Deputy Minister addressed and shared ideas regarding operation clean audit and other policy matters with senior provincial officials, communicators from all spheres of government and to a team of agents of change that I refer to as ministerial audit ambassadors. The latter is a group of officials who have turned their own municipalities around. Let me tell you, these ambassadors are here today, invited by me and Deputy Minister. Once more, I must tell you ladies and gentleman; these are indeed real agents of change. They shared their own experiences with us and I am convinced that South Africa is rich with diverse expertise, ready to serve our people with passion and pride.
Ladies and gentlemen, I give you the picture above to show you the road to this launch today came through a consultative approach. In my own view, this is an essence of people's power with a bottom up approach. This is because I believe, through a consultative process, the public wins and the dignity of our people is restored. Therefore, an audit management, within an entity or a department, must enhance and support the developmental agenda of our government.
In essence, once an audit plan is implemented, it must result in improved service delivery. The same applies here; operation clean audit must improve the lives of our people. Therefore, this campaign must be both inward and external looking, as the end goal is that the lives of our people are improved.
Ladies and gentlemen, I want to emphasise the point that even though today's event will not automatically improve the lives of our people, but it has to be seen as a project to review and assess a social contract that we signed with our people in 1994, when we took power from the apartheid regime. Before I get to the crux of the matter, I want to share what I saw and could not resist attending to the matter.
The Auditor-General report indicates that for 2006/07 financial year, only 253 of the 283 municipalities' audits had been finalised. Further, of the 253 audited, only 56 municipalities received unqualified audit opinions. That to me was enough to conclude that we are having a crisis in local government, which we needed to attend to swiftly.
The main findings were about poor internal controls, poor quality of financial statements and non-compliance with supply chain management. The same picture that is given above is found in some departments at a provincial level. This is the time to turn the situation around, in defence of our freedom and the advancement of our democracy.
Strategic vision and objective
Ladies and gentlemen, we are guided by our vision that says 'by 2014 all 283 municipalities and all provincial departments in the nine provinces in South Africa will have achieved clean audits on their financial statements and they will also be maintaining systems for sustaining quality financial statements and management information.
Already, there are critiques that suggest otherwise, saying we cannot achieve this task within five years. Let me technically and politically suggest otherwise too. The work has already started; the launch is just a platform to share our strategy, while demonstrating our unswerving commitment. However, we are not taking this momentous challenge lightly but we will ensure that all the departments and municipalities, including task teams have clear measurable objectives and clear targets. This is intended to help us measure our success as we go along.
We are saying
By 2011, all municipalities and provincial departments must have dealt or cleaned disclaimers and adverse opinions. By 2009/10, all accounting officers, both in municipalities and provincial departments must sign performance contracts on audit management (internal and external audits), integrated risk management, function of audit committees and internal audit units. We shall monitor the situation very closely.
Ladies and gentlemen, let me warn those officials in municipalities and departments that have no sense of accountability and responsibility, those who lose documents, especially when auditors are on site. You better stop now or do not even think about it because document tracking will be one of our priorities.
There is no reason to keep a signed tender document at home or your own brief-case because that is state property. Equally, let me caution some of my colleagues (politicians) who sometimes get involved in this document mismanagement. The latter creates a culture of disclaimers because the Auditor-General cannot express an opinion.
On this. We are clear of our approach because it raises red flags. If there are rats in our offices that destroy documents, let's report them. Aphi lamagundwana that are destroying state documents?
How to achieve our strategic objectives (enablers)
Governance and leadership
We will only achieve this strategic objective if leadership on the ground leads by example. We must be prepared to walk the talk, even in difficult times. We will achieve our strategic goal if all of us speak the truth and become honest about our daily operations within our departments and municipalities. Both the administrator and politician ask yourself this question, "What is my contribution from today to 2014 in making sure that operation clean audit becomes a reality and a testimony for generations to come"? What is also critical is the ability of officials within departments and municipalities to have both technical and conceptual skills. To deal with this challenge, training and reskilling of officials will be also one of our priorities.
Both the Public Finance Management Act, 1999 and Municipal Finance Management Act, 2003 refer to the functioning of audit committees so that assurance is made on daily operations of a department. It is with shock and dismay that in some departments and municipalities these structures of governance are dysfunctional or non-existent. In most instances, those who serve in such committees cannot even analyse financial statements presented to them. We will deal with the situation and a plan to arrest the situation is in place.
To achieve this goal, effective political oversight is critical. Portfolio committees, especially the Portfolio committees on Finance and on Cooperative Governance and Traditional Affairs, as well as the Standing Committee on Public Accounts (SCOPA) must exercise oversight. Administrators cannot be accountable to themselves when they implement operation clean audit, even in other situation, departments and municipalities must appear before these portfolio committees to effect political oversight. Again, political oversight will be compromised if some committee members cannot analyse financial statements.
We will intervene where there are skills gaps to support operation clean audit, both at political and administrative levels. On the other end, we need to attend to the separation of powers at municipal level because any confusion compromises governance in general and financial accountability in particular. Therefore, we need to review the Municipal Structures Act.
In addition to the issues raised above, record keeping, planning and budgeting, bank reconciliation, positive culture within a municipality or department are critical to assist in achieving the vision of 2014.
Ethics and Corruption
Ladies and gentlemen, as we embark on this project, corruption is our enemy. We will not rest until we see corrupt free zones in our society, including our departments and municipalities. We will sign Memorandum of Understanding (MoU) with some security state organs in order to deal with corrupt individuals. This we will do without fear, favour of prejudice! Nothing will stop us that I can assure you. As part of our programme, operation clean audit, we are going to launch a project called ayihlome. This project will promote ethics in the public service while simultaneously fight corruption. Within the spirit of ayihlome, we say we are at war with corruption. We will leave no stone unturned. Before ayihlome is launched, we will engage with the Department of Public Service and Administration and Public Service Commission to jointly work on this project for coordination purposes.
Benefit of Operation clean audit
Ladies and gentlemen, if our mind is focused and our eyes are always on the ball will achieve good governance in South Africa. Our municipalities and provincial departments will be free from corruption, financial statements will be of high quality, and systems will be effective and sustainable. Once more, it takes leadership to achieve the above. This means we must get to the bottom of the problem in order to see the light through the tunnel. Clean audits, clean cities and towns and clean governance can only lead to better service delivery which is a step towards the creation of a better life for our people.
Officials in the ministry, led by the Head of the Operation, Dr Batandwa Siswana will continue visiting provinces to strengthen and set-up coordinating committees that will support the project. Yesterday, senior officials from provinces and my department met here and agreed that by September 2009, all the provinces should have launched operation clean audit. My message to all of you is simple, "let us aim for effective accountability and responsibility; quality and sustainable financial statements; effective record keeping; effective audit committees and internal audit units; visionary leadership and high morals in defence of freedom and democracy. This is an achievable target, clean audits for municipalities and provincial government departments by 2014.
I thank you
Issued by: Department of Cooperative Governance and Traditional Affairs
14 July 2009
Source: Department of Cooperative Governance and Traditional Affairs (http://www.thedplg.gov.za/)
