The AGSA is a chapter 9 institution, which means its mandate and functions are outlined in chapter 9 (sections 181 & 188) of the Constitution of the Republic of South Africa. The Public Audit Act (PAA) further defines the organisation’s functions, while the amendments to the PAA expand this mandate to cover material irregularities.

As the supreme audit institution of South Africa, our role is to strengthen our country’s democracy by enabling oversight, accountability and governance in the public sector through auditing, thereby building public confidence.

Where do we fit into the accountability ecosystem?

The mission of sustainably and efficiently shifting public sector culture through insight, influence and enforcement is broad and cannot be achieved by the AGSA alone. To successfully deliver on this mission within the scope of our mandate and resources, we continue to engage with the relevant roleplayers in the broader accountability ecosystem to encourage them to consistently and effectively fulfil their respective responsibilities and mandates.

By the time that we report on adverse findings, multiple failures have already occurred along the accountability value chain. Once we conclude the work that falls within the scope of our mandate and resources, it is up to other roleplayers in the accountability ecosystem to do their part.

Who do we audit?

Each year, we produce audit reports on all government departments, public entities, municipalities and public institutions, referred to as auditees, as well as general reports analysing the audit outcomes for both the Municipal Finance Management Act (MFMA) cycle, which covers local government, and the Public Finance Management Act (PFMA) cycle, which covers national and provincial government. These Acts set out how auditees must manage and report on their finances and are two of the most important laws that auditees must comply with. We also produce reports on discretionary audits, performance audits and other special audits.

What do our audits cover?

When performing the statutory audits, our auditors go through the financial statements and performance reports of our auditees to check the quality and to see if they have complied with key laws on financial and performance management (such as the MFMA and the PFMA). They focus on three main areas:

1. 1. Have all the facts and figures been included and are these correct and accurate?

   This is about making sure that the financial statements give a fair presentation of the department’s finances and that there are no material misstatements, which could mislead the user of the statements.

   2. Did the auditee provide reliable and credible information on the things it was supposed to do during the year?

   These goals are known as performance objectives or predetermined objectives

1. Did the auditee comply with all the laws and regulations governing public finances (such as the MFMA and PFMA)?

WHAT ARE THE DIFFERENT AUDIT OPINIONS?

There are five main audit opinions that the AGSA can give:

	Unqualified opinion with no findings
	Unqualified opinion with findings
	Qualified opinion with findings
	Adverse opinion with findings
	Disclaimed opinion with findings

What does an audit not do?

The test nature and inherent limitations of both an audit and internal controls mean that there is always a risk that we may not detect some misstatements – even material ones – in reported information, and so we cannot guarantee the accuracy and completeness of the information reported. Although we may identify possible fraud during the audit, this is not the main purpose of the audit.

Because our audits focus on specific areas in key legislation, they do not provide assurance that all legislation that applies has been complied with. The audit also does not provide assurance that services have been delivered to citizens, only that the annual performance report is useful and reliable.

What is our expanded mandate?

The Public Audit Act was amended to expand the AGSA’s mandate beyond auditing and reporting in an effort to strengthen accountability mechanisms.

In a nutshell, our expanded powers centre around the concept of material irregularity. For example, accounting officers and authorities have the responsibility to prevent irregularities and act when they do happen. We only use our expanded mandate when we detected and reported on a material irregularity and no action has been taken.

 

What happens after we audit?

After we have completed our audit, the audit report is published in the auditee’s annual report, which is tabled in Parliament and the provincial legislatures and councils. It informs those responsible for oversight, the public and others of material misstatements in the financial statements, material findings on the usefulness and reliability of the performance report, material non-compliance with key legislation in specific focus areas, and the deficiencies in internal control that we identified during the audit.

What do we NOT do?

We do not:

• take action against the wrongdoers if an audit shows that money was wasted, misused or not properly accounted for
• prescribe what government ministers or heads of departments should do with the audit findings
• respond to inquiries that do not relate to the AGSA’s mandate and role
• provide services directly to the public
• intervene in disputes between private citizens and government departments, other private citizens, businesses or banks
• review legal decisions, provide legal opinions, or audit matters that are before the courts
• audit policy decisions.