As the Auditor-General of South Africa (AGSA), our constitutional mandate is to strengthen the democracy of our country. Our country’s Constitution states that we will improve the quality of life of all citizens and free the potential of each person; that we will build a united and democratic South Africa able to take its rightful place as a sovereign state in the family of nations. As is the case for any Supreme Audit Institution (SAI), we are expected to add value to our society by enabling accountability and governance in the public sector. As SAI South Africa, we are especially aware of the importance of building public confidence in our country.
To support this we have developed a supporting mission statement (reputation promise) that reads: The Auditor-General of South Africa has a constitutional mandate and, as the Supreme Audit Institution of South Africa, it exists to strengthen our country’s democracy by enabling oversight, accountability and governance in the public sector through auditing, thereby building public confidence.
The AGSA is one of the chapter 9 institutions mandated by the country’s highest law, the Constitution, to fulfil certain functions. These institutions are not part of government and do not have a duty to be part of the mechanisms of cooperative government. The independence of the AGSA is thus respected and strengthened.
As mandated by the Constitution and the Public Audit Act, 2004 (Act No. 25 of 2004) (PAA), the AGSA is responsible for the auditing of national and provincial state departments and administrations, all municipalities and any other institution or accounting entity required by national and provincial legislation to be audited by the AGSA. The AGSA fulfils its mandate by conducting a variety of audits, such as regularity audits (financial), performance audits, the auditing of performance information and international audits. In the 2007-08 financial year, regularity audit activities utilised 92% of the AGSA’s auditing resources, leaving 8% for performance audits. Although regularity audits remain the main focus area, the other audit services are being increased in response to the need for the AGSA to remain relevant to its stakeholders.
The Constitution establishes the AGSA as a state institution, outlines the manner in which the AG is appointed and defines the institution’s principles and key functions. As such, it provides the framework for corporate governance with which the institution must comply. Corporate governance is defined in the PAA, which also facilitates the establishment and defines the functions of the parliamentary oversight mechanism and other key structures of the AGSA, including the audit committee. The AG is accountable to the National Assembly in terms of section 181(5) of the Constitution and section 3(d) of the PAA and has to report on his/her activities and the performance of his/her functions in terms of section 10 of the PAA. The main accountability instruments are the AGSA’s Strategic Plan and Budget and Annual Report, which are tabled annually in the National Assembly. The Standing Committee on the Auditor-General (SCoAG), established in terms of section 10(3) of the PAA, oversees the performance of the AGSA on behalf of the National Assembly.
The Auditor-General is supported by 2 350 staff members, who are distributed throughout the nine provinces to represent the AGSA countrywide.
Although our activities are driven by our mandate and supported by our reputation promise, we have not forgotten the importance of people and their development. Former President of South Africa, Nelson Mandela said, “Education is the most powerful weapon which you can use to change the world.” In an effort to support the development of auditing and accounting skills in the country, the AGSA embarked on a process of building capacity via a trainee auditor scheme that currently includes about 950 trainees. The AGSA adopts an all-inclusive approach in taking on trainees who meet the minimum criteria, irrespective of the professional body with which they are associated. These include chartered accountants, registered government auditors, chartered certified accountants and certified information systems auditors.
Originally based on the British model, South Africa’s auditing legislation was first passed in 1911, amended in 1916 and then remained unchanged until the new Exchequer and Audit Act, 1956 (Act No. 32 of 1956) was passed. Control remained unchanged until the concept of performance auditing was incorporated into the Exchequer and Audit Act, 1975 (Act No. 66 of 1975).
The most radical legislative challenge lay in harnessing, for our purposes, the democratic separation of powers between the legislative, executive and judicial arms of government. We knew that for the audit office to fulfil its functional role as watchdog of the legislature and the executive, we could no longer operate under ministerial supervision – we had to become an independent institution that reported directly to Parliament.
Ultimately, this was a move which, within a decade, transformed the audit office from just another civil service department to a State institution supporting constitutional democracy – as outlined in chapter 9 of the Constitution of South Africa of 1996.
The first major piece of new legislation since 1975 was promulgated in 1989, when the Auditor-General Act, 1989 (Act No. 52 of 1989) made provision for the Auditor-General and his/her staff in a separate act. It was this act that visibly enhanced the independence of the Auditor-General.
However, the then executive authority retained the final say on certain crucial administrative matters relating to the audit office. This situation was perceived as contrary to the internationally accepted principle of an independent audit institution. It placed the Auditor-General in the unenviable position of having to report on the financial affairs of the executive authority without fear or favour, while being dependent on the goodwill and cooperation of the latter for the procurement of essential resources for carrying out its task.
The matter remained a source of concern to the then Auditor-General, and to the Joint Committee on Public Accounts. Eventually, with the full support of the Cabinet, the offending provisions were deleted from the act by the Auditor-General Amendment Act, 1992 (Act No. 123 of 1992). The Audit Arrangements Act, 1992 (Act No. 122 of 1992) followed, coming into effect on 1 April 1993. This act regulated the management, administration and conditions of employment of the staff of the audit office. It also facilitated the transfer of overall supervision and related matters to a parliamentary oversight body, the Audit Commission.
This act also ruled that future audit office reports would be tabled in Parliament – thus becoming public documents. The Audit Commission is responsible for approving the estimate of income and expenditure of the audit office, monitoring the operational performance of the audit office with regard to finance, quality control, training and affirmative action, and appointing an independent auditor to audit the accounts of the audit office. The current audit office is, therefore, in terms of legislation, a very different entity to what preceded it. It has currently the reputation as being the independent taxpayers’ watchdog for all South Africans.
The audit office has tested its government auditing standards against those agreed upon by INTOSAI in 1990 (we have been members of INTOSAI since 1986). The results secured the appropriateness and validity of our audits with internationally accepted standards and we moved on with confidence to seek full compliance with GAGAS (Generally Accepted Government Auditing Standards) during 1994.
A decisive moment in the evolution of the South African audit office was recorded on 20 December 2004, when the PAA was promulgated. The PAA enables the Auditor-General more effectively to fulfil the mandate and responsibilities prescribed in the Constitution, protect our independence and create an audit office that adopts corporate governance principles and best practices. The new PAA was developed to establish the AGSA as the Supreme Audit Institution for the public sector, in line with more recent acts. The PAA has strengthened our independence and ability to promote accountability in our country.
The logo is based on the image of a calculator or an abacus, both of which are symbols that lie at the heart of auditing. The logo is simple and uncluttered to suggest the pursuit of transparency and public accountability, while its crisp blue (business) and green (auditing) make a modern and thoroughly professional statement.
The dynamic movement suggested by the ovals mirrors the fact that cost-effective audits and examinations are constantly conducted of all information received and that diligent reporting to legislative institutions and the taxpayers takes place timeously.
The green ovals represent the cornerstones upon which the AGSA’s activities are based, namely integrity, accountability and transparency. All ovals are poised within an encompassing base. This underlines the fact that the AGSA conducts its affairs within the framework of a constitutional mandate, and that it strives to preserve the integrity, dignity and well-being of our country, in order for South Africans to enjoy the benefit of good governance.
