Page 179 - Department of Social Development Annual Report 2021

PART C: GOVERNANCE

11: AUDIT COMMITTEE REPORT

Effectiveness of Internal Controls

The Accounting Officer and Management are responsible The Internal Audit Unit carried out audit assignments in
for designing and implementing an effective system of terms of the approved plan and was monitored by the
internal controls to mitigate risks and control Audit Committee as required by the PFMA and Treasury
deficiencies. Regulations. The recommendations of the Audit
Committee were considered during the course of the
Internal Control is a cost-effective process effected by execution of audits.
the executive management of the department, designed
to provide reasonable assurance regarding the The Quality of In-Year monitoring and Quarterly Reports
achievement of its objectives, effectiveness and
efficiency of operations, financial reporting, compliance The Department has reported monthly and quarterly to
to applicable laws and regulations as well as policies and the National Treasury as required by the PFMA. The Audit
procedures. Committee reviewed the quarterly reports prepared and
issued by the Accounting Officer of the Department
• Timeous addressing of the 2019/20 AGSA audit during the year under review, and is satisfied with the
findings; content and quality thereof. There are opportunities for
• Slow pace in resolving internal audit findings; improvement in some areas on the quality of both
• Lack of or inadequate consequences management. performance information and financial reporting.
While improvements were noted in the current financial
year with regard to leadership, governance and the Evaluation of Financial Statements and Performance
culture of accountability relating to the oversight role Information
played by DSD over the department entities, entity
oversight remains an area of concern for the Audit The Audit Committee has:
Committee; • reviewed and discussed the audited Annual
The Committee would also like to highlight to the Financial Statements to be included in the Annual
Executive Authority the need to prioritise filling of Report with the AGSA and the Accounting Officer;
leadership positions in order to stabilise the leadership • reviewed the AGSA’s Management Report and
and governance. The posts of Accounting Officer and two Management’s response thereto;
Deputy Director-Generals have been vacant throughout • reviewed accounting policies and practices as
the period under reviewed with acting incumbents. Filing reported in the Annual Financial Statements;
these three critical posts will go a long way in • reviewed the Department’s processes for
strengthening leadership and thus enhance the compliance with legal and regulatory provisions;
department opportunity on delivering on its mandate, • reviewed the information on predetermined
goals and objectives. objectives as reported in the Annual Report;
• reviewed adjustments resulting from the audit of the
Internal Audit Department;
• reviewed and where appropriate, recommended
The Audit Committee reviewed and approved the Internal changes to the Annual Financial Statements as
Audit Unit’s risk-based three-year rolling and operational presented by the Department for the year ending 31
plans for 2020/21. Internal Audit was guided by the March 2021.
consolidated risk profile of the department, critical audit The Audit Committee has met and discussed the audit
areas and management’s inputs in the formulation of its outcomes with the AGSA and Management to ensure that
three-year strategic and annual plans. The Audit there are no unresolved findings.
Committee also monitored performance of the Internal
Audit Unit against its approved operational plan on a
quarterly basis. Auditor-General of South Africa

We are satisfied that the Internal Audit Unit is operating We have, on a quarterly basis, reviewed the Department’s
effectively and that it has reviewed key controls implementation plan for audit issues raised in the prior
associated with the risks pertinent to the strategic and year. We have reviewed the AGSA’s Management Report
operational objectives of the department and has and Audit Report for the department. We have thus
provided appropriate recommendations to improve the requested the Management to conduct a root cause
internal control system. The work performed by Internal analysis for the findings of AGSA and to present a
Audit has enabled the Committee to fulfil its duties remedial action plan to the Audit Committee.
around compliance, financial reporting, governance,
performance information management and information
technology.

DEPARTMENT OF SOCIAL DEVELOPMENT ANNUAL REPORT 2020/21 179