CLEAN ADMINISTRATION AS A COMPLIANCE ENABLER - PowerPoint Presentation

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CLEAN ADMINISTRATION AS A COMPLIANCE ENABLER

Nosipho Mba CA (SA)

OVERVIEW

Background and the original purpose of the Clean Audit Initiative.

Difference between Clean Administration and Clean Audit.

Benefits of Clean Administration/Clean Audit.

Pillars of Clean Administration and Clean Audit.

Critical Path for Clean Administration:

Required Management Thought Patterns.

Required Management Commitment.

Strong Accountability System as an enabler for Effective Consequence Management.

Recommendations.

BACKGROUND & ORIGINAL PURPOSE

The Operation Clean Audit initiative was launched on 16 July 2009 by the late and then Minister of COGTA, Honorable Sicelo Shiceka.

The purpose of this initiative was to clean up governance and enhance service delivery at both local and provincial spheres of government.

The clean audit 2014 was part of a four-legged Operation Clean Up which includes three other legs, which are:

Clean Cities/Towns;

Debt Collection, Public Mobilization and Revenue Enhancement, as well as;

Infrastructure backlogs eradication and Economic development.

CLEAN AUDIT VS CLEAN ADMINISTRATION

Clean administration

relates to an

environment created

to facilitate a clean audit outcome, whereas,

clean audit

relates to the

outcome.

Clean Administration Environment

is mainly centered around Focused Service Delivery in accordance with the Spirit of the Constitution of RSA

(Transparency, Accountability, Fairness and Responsibility), PFMA/MFMA and other applicable

prescripts.

Three main values of RSA Constitution:

(a) Human dignity, the achievement of equality and the advancement of human rights and freedoms. (b) Non-racialism and non-sexism. (c) Supremacy of the constitution and the rule of law.

CLEAN AUDIT VS CLEAN ADMINISTRATION

RSA Constitution Preamble

:

We, the people of South Africa,

Recognise

the injustices of our past;

Honour

those who suffered for justice and freedom in our land;

Respect those who have worked to build and develop our country; andBelieve that South Africa belongs to all who live in it, united in our diversity.We therefore, through our freely elected representatives, adopt this Constitution as the supreme law of the Republic so as to ­

Heal the divisions of the past and establish a society based on democratic values, social justice and fundamental human rights;

Lay the foundations for a democratic and open society in which government is based on the will of the people and every citizen is equally protected by law;

Improve the quality of life of all citizens and free the potential of each person; and

Build a united and democratic South Africa able to take its rightful place as a sovereign state in the family of nations.May God protect our people. Nkosi Sikelel' iAfrika. Morena boloka setjhaba

sa

heso

. God seën Suid-Afrika. God bless South Africa. Mudzimu fhatutshedza Afurika. Hosi katekisa Afrika.

CLEAN AUDIT VS CLEAN ADMINISTRATION

Clean Administration Environment further focuses on:

Providing stakeholder assurance that abilities are applied in such a manner that objectives will be achieved effectively and efficiently in an

agreed ethical environment.

Achieving Maximum Output with Minimum Inputs in an

agreed Ethical Environment.

Improving General Governance, Risk Management, Internal Controls, Internal Audit, Resource Utilisation and Financial Management.

Processes and systems by which the Department/Municipality/Entity/Organ of State is Directed, Controlled and held to Account for.

Holding a Balance between Economic and Social goals, and between Individual and Communal goals.

Therefore, becoming an auditable organisation.

BENEFITS OF CLEAN ADMINISTRATION

Clean Administration and Clean Audit influences:

Foreign investment decision making.

The degree of confidence that the general public has in its elected government.

The amount of grant allocation from the National Fiscus.

The quality of service the Department/Municipality/Entity/Organ of State receives from its human capital and service providers.

It ensures appropriate and timeous responses to the critical needs of the communities/citizen we are serving.

PILLARS OF CLEAN ADMINISTRATION

In response to the clean audit initiative, in 2010 the then Auditor General, Mr. Terrence Nombembe, did National Clean Audit roadshows, introducing the enablers and key pillars of clean administration which then leads to clean audit.

The key pillars/drivers of clean administration and clean audit outcome as reflected in the AGSA’s dashboard and Directive 104 (Annexure C) of the Public Audit Act 25 of 2004 are as follows:

Leadership

Financial and performance management and

Governance.

PILLARS OF CLEAN ADMINISTRATION

Leadership

Providing effective leadership based on a culture of honesty, ethical business practices and good governance, protecting and enhancing the best interests of the

Department/Municipality/Entity/Organ of State

.

Exercising oversight responsibility regarding financial and performance reporting and

compliance

and related internal controls.

Implementing effective HR management to ensure that adequate and sufficiently skilled resources are in place and that performance is monitored.

Establishing and communicating policies and procedures to enable and support understanding and execution of internal control objectives, processes and responsibilities.

Developing and monitoring the implementation of action plans to address internal control deficiencies.

Establishing an IT governance framework that supports and enables the business, delivers value and improves performance.

PILLARS OF CLEAN ADMINISTRATION

Financial and performance management

Implementing proper record keeping in a timely manner to ensure that complete, relevant and accurate information is accessible and available to support financial and performance reporting.

Implementing controls over daily and monthly processing and reconciling of transactions.

Preparing regular, accurate and complete financial and performance reports that are supported and evidenced by reliable information.

Reviewing and monitoring compliance with applicable laws and regulations.

Designing and implementing formal controls over IT systems to ensure the reliability of the systems and the availability, accuracy and protection of information.

PILLARS OF CLEAN ADMINISTRATION

Governance

Implementing appropriate risk management activities to ensure that regular risk assessments, including consideration of IT risks and fraud prevention, are conducted and that a risk strategy to address the risks is developed and monitored.

Ensuring that there is an adequately resourced and functioning internal audit unit that identifies internal control deficiencies and recommends corrective action effectively.

Ensuring that the audit committee promotes

accountability and service delivery

through evaluating and monitoring responses to risks and providing oversight over the effectiveness of the internal control environment including financial and performance reporting and

compliance with laws and regulations

.

CLEAN ADMINISTRATION CRITICAL PATH

Required Management Thought Patterns

Understanding that Government (Public Sector) is complex.

Government is ruled by management efforts not incidents/Crisis.

Being proactive in our responses to the needs of our communities/citizens rather than reactive.

Understanding the importance of how to design, deliver, evaluate, report on and monitor activities when planning service delivery.

The need to plan extensively, closely monitor the execution of the plan and take corrective action timely.

The importance of developing meaningful performance indicators.

Striking the balance between new service improvements and existing programs.

Delivering on time, every time.

Understanding that this is

a SHARED RESPONSIBILITY

.

CLEAN ADMINISTRATION CRITICAL PATH

Required Management Commitment

Community/Citizen focus

.

Managing for results

– focusing on the following:

Clearly defining the results to achieve.

Pre-determining the resources needed to achieve the results.

Monitoring progress made according to the predetermined key indicators.

Exercising responsibility and accountability towards those responsible for achieving results.

Making timely adjustments.

Linking strategic goals/objectives on the Strategic Plan/Annual Performance Plan or IDP/SDBIP or Corporate Plan/Service Delivery Agreement to activities.

Tracking progress against plans.

Performance based management based on employee level linked with performance - based management on service delivery activities.Provide assurance that analysis is unbiased and that both good and bad performance are transparent.

CLEAN ADMINISTRATION CRITICAL PATH

Responsible Spending

Establishing and maintaining balance between:

Investing in service improvement.

Maintaining the integrity of existing programs.

Developing new programs.

Coping with budgetary constraints.

Assessing the integrity of the existing programs.

Integrating National/Provincial Priorities with specific services needed within the Metro/District/Local Municipality.

Linking financial and non-financial performance information with the cost of the actual or expected results.

Proper risk management.

Designing, implementing and monitoring adequate internal controls.

Producing spending proposals that are well rooted in policy and contributes to achieving objectives in the plans.

Enforcing public accountability.Implementing best management practices.Re-allocating funding to maintain integrity of the existing programs for stability and sustainability.

CLEAN ADMINISTRATION CRITICAL PATH

Strong Accountability System as an enabler for effective Consequence Management.

Accountability is the

obligation

of an

individual

or

organization

to

account for its activities, accept responsibility for them, and to

disclose

the

results

in a transparent manner. Obligation of an individual/organization: A course of action to which a person/organization is legally and morally bound.Key element: Put the right people in the right positions and create an obligation to perform.

Define the Organizational Culture/ Ethical Environment

t

o which the individual is held accountable to, both morally and legally in performing their duties.

Pillars of culture being; behaviors (leadership in particular), systems of managing performance, symbols (observable events and decisions), business rationale/order of the day, values to hold people accountable to, beliefs needed and deal breakers.

CLEAN ADMINISTRATION CRITICAL PATH

Account for activities and accept responsibility for them

:

Activities that are linked to organizational objectives and targets must be clearly defined and assigned to the relevant individuals.

Individuals must accept responsibility for the activities assigned to them.

Most important is that the individuals must be given adequate authority to enable them to carry out their responsibilities.

Disclose the results in a transparent manner

:

Clearly define and communicate the KPAs, KPIs, timelines and portfolio of evidence required for the performance of activities before the activities are performed.

Clearly define the manner and frequency of reporting.

Most importantly, clearly define the consequences for performance and nonperformance.

Reward good performance and

Deal decisively with and/or address poor/non- performance.

RECOMMENDATIONS

Define your Ideal state and all the

relevant Laws and Regulations you must comply

with as a Department, Municipality, Entity/Organ of the State (Vision, Mission, Niche, Perfect Storm, Culture including Beliefs, Values, Behaviors, Mechanisms/systems, Business Rationale/Order of the day and Deal Breakers).

Perform a diagnostic review of where you compared to the Ideal (Key documents being your Customer Satisfaction/perception Surveys, AGSA Management Report: Status of Dashboard, internal Audit and other oversight reports).

Discover and/or re-affirm your mandate from the

Constitution

as a Department, Municipality, Entity/Organ of the State (Profiling your current most loyal customers, identify the specific problem that you are solving for them, who else should you be serving, your uniqueness, Top Leadership’s passion, what can you be the best at in the world, where do you have ability to add most value, what drives your engine)

Refine/realign your Functional Strategy (What do you need to start doing, stop doing (min 10 and max 20 points to align to your Functional Strategy), How will you make it happen (Strategic imperative, measure and target) and what are the next steps.

Articulate your culture**

CULTURE HOLDS EVERYTHING TOGETHER!!!

Thank You!