Page 129 - DSD ANNUAL REPORT 2022-2

PART C: GOVERNANCE

Activities of the Audit Committee

During the period under review, the following activities were The Committee is concerned about the recent regression in the
undertaken which demonstrate the commitment of the Audit current financial year with regard to leadership, governance and
Committee in achieving its mandate: the culture of accountability relating to the oversight role played
• Reviewed quarterly management reports; by DSD over the department entities, entity oversight remains
• Considered the effectiveness of the risk management process; an area of concern for the Audit Committee and human resource
• Considered the Internal Audit plans and reports and made management and record keeping.
recommendations as appropriate;
• Monitored progress with the Internal Audit coverage plans Although the process of appointing senior management at critical
as well as management’s follow-up on matters requiring post has commenced, The Committee would also like to highlight
attention; to the Executive Authority the need to prioritise filling of leadership
• Monitored compliance with the department’s policies and positions in order to stabilise the leadership and governance. The
applicable legislation; posts of Accounting Officer and two Deputy Director-Generals
• Prioritising oversight on forensic investigations reports issued including the CFO’s post have been vacant throughout the period
into allegations of misappropriations of funds especially on under reviewed with acting incumbents. Filing these three critical
Social Relief of Distress (SRD) Grants on South African Social posts will go a long way in strengthening leadership and thus
Security Agency (SASSA). enhance the department opportunity on delivering on its mandate,
• Conducted separate informal meetings with management, goals and objectives.
internal and external audit;
• Reviewed External Audit plans, reports and management’s Internal Audit
follow-up of matters requiring attention
• Provided guidance to the department on ICT governance issues The Audit Committee reviewed and approved the Internal Audit
and alignment to applicable legislations and ICT governance Unit’s risk-based three-year rolling and operational plans for
Frameworks. 2021/22. Internal Audit was guided by the consolidated risk profile
of the department, critical audit areas and management’s inputs in
the formulation of its three-year strategic and annual plans. The
Effectiveness of Internal Controls Audit Committee also monitored performance of the Internal Audit
Unit against its approved operational plan on a quarterly basis.
The Accounting Officer and Management are responsible for
designing and implementing an effective system of internal We are satisfied that the Internal Audit Unit is operating
controls to mitigate risks and control deficiencies. effectively and that it has reviewed key controls associated with
the risks pertinent to the strategic and operational objectives of
A risk management process is in place in the department. A Risk the department and has provided appropriate recommendations
Management and Ethics Committee (RMEC) is established within to improve the internal control system. The work performed by
the department which comprises of the Head of Branches and four Internal Audit has enabled the Committee to fulfil its duties
(4) independent external members. This committee is chaired by around compliance, financial reporting, governance, performance
independent Chairperson and is responsible for monitoring the information management and information technology.
departmental risks on a regular basis and deals with ethics related
matters. The Internal Audit Unit carried out audit assignments in
terms of the approved plan and was monitored by the Audit
Internal Control is a cost-effective process effected by the executive Committee as required by the PFMA and Treasury Regulations. The
management of the department, designed to provide reasonable recommendations of the Audit Committee were considered during
assurance regarding the achievement of its objectives, effectiveness the course of the execution of audits.
and efficiency of operations, financial reporting, compliance to
applicable laws and regulations as well as policies and procedures. The Quality of In-Year monitoring and
Whilst the Audit Committee noted some improvements on the Quarterly Reports
implementation of controls during the financial year, there were
some areas of concerns noted by the Committee as reported by The Department has reported monthly and quarterly to the National
AGSA and Internal Audit in the following areas: Treasury as required by the PFMA. The Audit Committee reviewed
• Slow progress in the implementation of the 2020/21 AGSA the quarterly reports prepared and issued by the Accounting Officer
audit findings and in resolving internal audit findings; of the Department during the year under review, and is satisfied
• Undue delays in investigating material irregularities identified with the content and quality thereof. There are opportunities for
/fraud related cases and slow pace in the implementing fraud improvement in some areas on the quality of both performance
investigations recommendation; and information and financial reporting.
• Inadequate consequences management for holding
transgressors accountable.

DEPARTMENT OF SOCIAL DEVELOPMENT ANNUAL REPORT 2021/22 129