regulatory reform in Korea

76 – 2 – SUPREME AUDIT INSTITUTIONS’ INPUT INTO POLICY FORMULATION

Box 2.8. The SAI of South Africa – budget and strategic plan review

Objective

In South Africa, the portfolio committees of parliament and the provincial legislatures are required to undertake a budget review, recommendation and reporting process on all budgets prior to submission to parliament and provincial legislatures for approval. The SAI of South Africa, the Auditor General (AGSA), adds value through a budgetary and strategic plan review that uses the knowledge and insights gained from the previous year’s audit, including the performance of the department. Feedback is provided to accounting officers and presentations are made to the relevant parliament or legislature portfolio committees.

Type of activity

Financial audit, compliance audit and providing guidance.

Scope and methodology

AGSA incorporates all national and provincial departments in its budget and strategic plan review. It complements the findings from previous years financial and compliance audits, and mid-year audits, with each department’s financial accountability records, assessments of internal controls, and delivery on service objectives, to provide insight on the adequacy of departmental budget preparations. AGSA’s process broadly involves the following checks on departments: 1) appropriation account statements; 2) budget compliance; and 3) the relevance and measurability of pre-determined objectives. i. Procedures related to appropriation account statements - year-end

At year-end, AGSA audits the final appropriation, the actual funds received, any variance over/under, and the total appropriation for each programme. It undertakes the following: inspects the rollover of entities’ unspent funds; verifies the current year adjusted estimate against the appropriation statement; checks for unauthorised expenditure; determines whether virements were applied; assesses actual expenditure; recalculates figures on the Appropriation Statement; verifies approval for any shifting funds; inspects the Estimates of National Expenditure Budget (for applicable year); and inspects the presentation and disclosure in the financial statements.

Procedures performed on the budget process – year-endAs part of the compliance audit, AGSA reviews compliance with the Public Finance Management Act of South Africa in the areas of: current annual budget, virements,8 rollovers, adjustments and reporting. ii. Procedures performed on the pre-determined objectives – interim audit

The procedures below are performed by AGSA as part of the interim auditing. The results are discussed with the chair of the portfolio committee before submission of the strategic plan to the oversight committee.

 In assessing the measurability of objectives, AGSA asks: Does the indicator/measure have a clear unambiguous definition? Is the indicator/measure defined so that data will be collected consistently? Based on discussions held with senior management and relevant information inspected, is the indicator/measure well-defined? Is it possible to verify the processes and systems that produce the indicator? Based on discussions held with senior management and information inspected, is it possible to conclude whether the indicator/measure is verifiable?

SUPREME AUDIT INSTITUTIONS AND GOOD GOVERNANCE: OVERSIGHT, INSIGHT AND FORESIGHT © OECD 2016