Public Audit Bill, 2003

1
Public Audit Bill, 2003

• Introductory remarks by Shauket
  Fakie,
• (Ad hoc committee on Audit legislation,
  10 September 2003)

2
Why the new Public Audit Bill

• To align both existing statutes (i.e. AG Act and
  Audit Arrangements) with
• Constitution, 1996
• PFMA, 1999
• Labour Relations Act, 1995
• Other Legislationeg. MFMB
• To consolidate the AG Act and AA Act
• To provide a modern framework for governance,
  financial management and best practice HR
  management
• To enhance the public sector audit provisions/
  function

3
Guiding principles and benchmarks

• Legal context (Constitution other Legislation)
• International audit legislation and best practice
  
• South African benchmark legislation (e.g. Gender
  Commission, Public Protector)
• 2nd King Report on Corporate Governance

4
Consultation Process

• Various stakeholders at beginning who preferred
  to comment once Bill was published
• Audit Commission (on AG Act amendments), Dec
  2000
• All staff, especially HR issues, Jan - March 2002
• Speakers and Deputy Speaker, April 2002 (process
  only)
• Audit Commission on Public Audit Bill May 2002
• Minister of Finance April 2003
• Public comments subsequent to Gazetted Bill
• Assessment of comments received

organigram
5
Feedback - some common views

• Independence of Auditor-General accountability
  v/s independence
• Audit Commission an effective oversight mechanism
  of the Office of the Auditor-General
• Primary purpose of the AG - structural
  arrangements to reflect this
• Align PFMA and Public Audit Bill

6
Feedback - some common views (cont.)

• Quality nature of reporting to the Audit
  Commission improvement
• AC - responsibilities - e.g. ensure high quality,
  cost-effective audit reports timeously
• Continuity on the Audit Commission
• Bill must enable AG to conduct transversal audits
• Financial independence of AG must be provided but
  must be reasonable

7
Overview of AG Bill - main changes and
enhancements

• Functions of AG aligned with Constitution and
  streamlined
• Alignment with PFMA and MFMB, enhancing mandate
  with regard to public entities
• Clarification of relationship between AG, AC and
  Audit Office
• Enhancing appointment of the AC providing a
  charter for clarification of functions

8
Overview of AG Bill - changes and enhancements
(cont.)

• Providing Office with an enhanced governance
  structure by placing Auditor-General in overall
  control of his/her Office
• Consolidating the financial and operational
  independence of AG, tightened-up cost recovery
• Clarifying the service conditions of the AG the
  related role of the Audit Commission

9
Way forward

• Workshop Bill with Committee (clause by clause),
  if required
• Public hearings
• Presentation of proposed refinements to Bill
  (arising out of public comment)
• Parliamentary process
• Implementation