OUR GOVERNANCE

Corporate governance framework

Our governance framework is defined by the Constitution, PAA, certain regulations issued in terms of the PAA and good governance best practices. We fully adhere to most King IV principles. In line with best practice, we rotate the members of our governance structures and annually perform independent reviews of their effectiveness. We also regularly fine-tune our internal governance framework to enhance our leadership decision-making processes.

The Standing Committee on the Auditor-General

Scoag is an oversight mechanism aligned to section 55(2)(b)(ii) of the Constitution and section 10(3) of the PAA.

Legislative duties of Scoag

  • Protects the independence, impartiality, dignity and effectiveness of the auditor-general (section 2(c)(i))
  • Provides advice to the National Assembly (section 2(c)(ii))
  • Provides general oversight in terms of section 55(2)(b)(ii) of the Constitution (section 10(3))
  • Gives an opinion on the appointment of the deputy auditor-general (section 31(1))
  • Gives an opinion on regulations (section 52(2))

Performance matters

Strategic plan and budget

  • Considers the strategic plan and budget and recommends its submission to the Speaker for tabling in the National Assembly – sections 38(2)(a) and 38 (3)
  • Provides an opinion on audit fees – section 23(1)
  • Considers reports from the deputy auditor-general on any actual or impending revenue under- collection, shortfalls in budgeted revenue and overspending of the budget or expenditure not in accordance with the budget – section 43(5)(b)

Annual report

  • Considers the annual report, the financial statements and the audit report on these statements – section 41(5) (and refer to section 10(1) and (2))
  • Agrees on retaining the surplus – section 38(4)
  • Considers audit committee concerns – section 40(6)(b)(iii)
  • Appoints an external auditor – section 39(1)

Audit matters

  • Provides an opinion on the standards applied to audits, the nature and scope of audits and procedures for handling complaints when auditing – section 13(1)(a), (b), (c)
  • Consults on the Code of conduct for authorised auditors – section 12(3)(b)

Quality management assessment committee

Mandate

The quality management assessment committee (QMAC) oversees the system of quality control at the AGSA. It assesses quality control based on input from our Quality Management business unit and the Independent Regulatory Board for Auditors (IRBA). This ensures that we adhere to professional standards and legal requirements, and that our audit reports are in line with accepted international standards.

We submit all quality control monitoring review reports to QMAC, which considers whether we have correctly evaluated the quality assessment ratings for those engagement managers subjected to a quality review. The QMAC also reviews and approves our policies and processes for monitoring quality compliance.

The QMAC consists of the auditor-general, the deputy auditor-general, a member of the audit committee and an additional external member co-opted by the auditor-general.

MEMBERS

Ms Tsakani Maluleke, 49
(Chairperson)
Appointed 2021
Attendance: 100%
Ms Linda de Beer, 49
CA(SA)
Appointed 2015
Attendance: 50%
R29 475
Zubair Wadee, 46 CA(SA), BAcc, MCom, CIMA
Appointed 2023
Attendance: 100%
Ms Grathel Motau, 50
CA(SA)
Appointed 2022
Attendance: 66%
R80 662
Mr Vonani Chauke, 48
Appointed 2021
Attendance: 100%

The QMAC convened three times during the year and considered the following matters:

  • ISQM methodology
  • The IRBA review of the AGSA’s quality management unit reviewers
  • Outcome of the committee on differences of opinion
  • Proposed quality ratings
  • System of quality management (SoQM) external review programme
  • QMAC work plan
Advisory committee on material irregularities

Mandate

The advisory committee on material irregularities (ACMI) was established in terms of section 5(2)(b) of the PAA as part of the MI process to deal with the issuing of a certificate of debt where a financial loss was suffered by the state. The committee is mandated to hear oral representations by accounting officers or members of an accounting authority and to advise the auditor-general on the issuing of a certificate of debt. The committee is independent and comprises multi-skilled and professionally qualified members appointed by the auditor- general. The mandate and functions of the committee are set out in the terms of reference of the committee. The material irregularity unit (MIU) provides administrative services to the committee.

The ACMI met to hear oral representation on one MI on 22 August 2023, 19 October 2023, and 20 and 21 November 2023.

MEMBERS

Mr Nano Matlala
(Chairperson)
Appointed 15 Feb 2023
Attendance: 100%
R588 000
Prof. Peter Goss
(Investigator)
Appointed 15 July 2020
Attendance: 100%
R310 992
Dr Ina Botha
(Legal)
Appointed 15 Dec 2022
Attendance: 100%
R400 774
Ms Jane Masite
(Supply chain management specialist)
Appointed 15 July 2020
Attendance: 100%
R268 636
Mr Herman Thlako
(Registered auditor)
Appointed 15 Oct 2022
Attendance: 100%
R293 322
Mr Michael Bourne
(Registered auditor)
Appointed 15 Oct 2022
Resigned: 17 Aug 2023
Nil

Mr Grant Dunnington
(Financial)
Appointed 1 July 2022
Attendance: 100%
R196 137

 

Audit committee

Mandate

Section 40(1) of the PAA mandates the auditor-general to establish an audit committee and appoint its members. The audit committee does not have managerial responsibility, but reports to the auditor-general and Scoag on:

  • whether our internal controls and risk management are adequate and effective
  • its evaluation of our annual financial statements
  • its opinion of whether our chief financial officer and finance function have the necessary financial expertise to fulfil their responsibilities

The committee consists of three independent, non-executive members. Their skills and competencies align to their duties and cover business, financial and risk management matters.

MEMBERS

Ms Grathel Motau, 50 (Chairperson) CA(SA)
Appointed 2022
Attendance: 100%
Experience: An entrepreneur and non-executive director with more than 20 years’ experience in supply chain, risk management, ICT, finance and operations.
R388 522
Mr Cedrick Mampuru, 49
CA(SA)
Appointed 2018
Attendance: 100%
Experience: Over 20 years in debt and equity structuring, risk and financial management.
R322 669
Ms Carol Roskruge, 51
MBL
Appointed 2016
Attendance: 100%
Experience: Many years in supply and value chain and as an independent non-executive director.
R349 718

The audit committee met five times during the year to consider, and where appropriate, approve:

  • the status of our internal controls and risk management
  • Internal audit short, medium and long-range work plans.
  • progress of the internal and external audits
  • the integrated annual report and audited financial statements
  • our sustainability and performance information
  • the recommendation to Scoag to appoint the external auditor and their work plans.
  • review of the chief financial officer and finance function’s capacity and expertise to fulfil their responsibilities
  • monitor the complaints management system
  • the early adoption of new accounting standards
  • the annual assessment of the audit committee members
  • mitigation that the AGSA implemented to improve quality management
Remuneration committee (Remco)

Mandate

The auditor-general determines the terms and conditions of employment of all employees in the organisation. The remuneration committee (remco) provides the auditor-general with specialised advice on remuneration and related issues, which she considers before making a final decision. It also provides advice on industry developments in remuneration frameworks. We review the remuneration committee is annually for independence.

In addition, the amended PAA mandates remco to make recommendations to the independent commission for the remuneration of public office bearers on the salary, allowances and benefits of the auditor-general.

MEMBERS

Mpho Nkeli, 58 (Chairperson) MBA
Appointed 2021
Attendance: 100%
Experience: 15 years of executive experience.
Was chairperson of the Commission of Employment Equity.
R – no remuneration accepted
Ms Tantatswa Fubu, 52
CA(SA)
Appointed 2022
Attendance: 100%
Experience: 31 years across diverse sectors as an audit partner and on various ethics, transformation, and remuneration committees.
R174 194
Ms Nazlie Samodien, 53 Master Reward Specialist
Appointed 2009
Attendance: 100%
Experience: 10 years of generalist HR experience and over 15 years in specialist remuneration.
R161 325
Mr Sifiso Cele, 50
MBA, MHRP
Appointed 2023
Attendance: 83%
Experience: 17 years in banking sector.
HR specialist.
R88 243
Mr Vonani Chauke, 48
Attendance: 100%

During the year, the committee convened five times to deliberate on:

  • remuneration review and benchmarking
  • performance management review
  • people strategy
  • annual salary increase and performance bonuses
AGSA executive committee
The executive committee (exco) assists the deputy auditor-general to manage the business affairs of the organisation, in line with the delegation of authority set out in the AGSA management approval framework. It also has the power to establish subcommittees to assist it. Chaired by the deputy auditor-general, the committee consists of two heads of audit, one head of specialised audit services, the chief financial officer, chief risk officer, chief technology officer and chief people officer. The exco meets once a month and, when required, holds special meetings to deal with key ad hoc governance matters.

Diversity of our exco

Profile of our exco members

 

Our governance reports

AG’S REPORT ON THE EVALUATION OF THE AGSA’S SOQM AS AT 30 NOVEMBER 2023

Introduction
As communicated in the previous year’s integrated annual report (2022-23), the AGSA adopted ISQM 1 (the standard) effective from 15 December 2022. To comply with the standard, the AGSA designed and implemented its SoQM.In line with paragraph 13 of the standard1, the inaugural evaluation of the AGSA’s SoQM was performed on 30 November 2023.

This report supports the communication requirements of paragraph 33(d)(ii) of ISQM 12. I am pleased to report on the conclusion reached from my evaluation of the AGSA‘s SoQM, as required by the standard.


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Responsibilities of the auditor-general and deputy auditor-general for the AGSA’s SoQM

As the auditor-general, I assume ultimate responsibility and accountability for the AGSA’s SoQM in line with the AGSA’s audit mandate from the Public Audit Act 25 of 2004 (PAA).

The deputy auditor-general, who has a direct line of communication to me, is assigned operational responsibility. The deputy auditor-general has, in turn, assigned certain operational responsibilities for the components of the SoQM to individuals with sufficient and appropriate experience and knowledge, as well as the necessary authority, to assume the operational responsibilities.


Evaluating the operating effectiveness of the AGSA’s SoQM

Paragraph 53 of the standard states: The individual(s) assigned ultimate responsibility and accountability for the SoQM shall evaluate, on behalf of the firm, the SoQM. The evaluation shall be undertaken as of a point in time, and performed at least annually.

In line with the guidance provided in the standard3 I conducted the evaluation of the AGSA, supported by the QMAC, on 30 November 2023.

In evaluating the SoQM, we considered the outcomes of the monitoring and remediation process. In using these results, the following was taken into account:

  • The severity and pervasiveness of identified deficiencies, and the effect on achieving the SoQM objectives
  • Whether remedial actions have been designed and implemented by the firm, and whether the remedial actions, taken until the time of the evaluation, are effective
  • Whether we have appropriately corrected the effect of identified deficiencies on the SoQM.


Conclusion reached on the evaluation of SoQM
Based on the evidence considered, I am satisfied that the AGSA’s SoQM provides the firm with reasonable assurance that:

  • the AGSA and its personnel fulfil their responsibilities in accordance with professional standards and applicable legal and regulatory requirements, and conduct engagements in accordance with such standards and requirements
  • engagement reports issued by the AGSA or engagement managers or any other delegated signatories are appropriate in the circumstances.

Context of the conclusion

In discharging my allocated responsibilities of ultimate accountability and responsibility for the AGSA’s SoQM:

  • I considered the committee’s recommendation, as resolved at the QMAC meeting held on 30 November 2023
  • Applied my professional judgement on the supporting evidence submitted from the AGSA’s quality management processes

I believe that the SoQM evidence I have received is sufficient and appropriate to provide a basis for my conclusion.


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Signed:
23 September 2024
Lynnwood

1
Paragraph 13 of ISQM 1: “Systems of quality management in compliance with this ISQM are required to be designed and implemented by December 15, 2022, and the evaluation of the system of quality management required by paragraphs 53–54 of this ISQM is required to be performed within one year following December 15, 2022.”
2
Paragraph 33(d)(ii) of ISQM 1: “Information is communicated externally when required by law, regulation or professional standards, or to support external parties’ understanding of the system of quality management.”
3
The individual(s) assigned ultimate responsibility and accountability for the system of quality management may be assisted by other individuals in performing the evaluation. Nevertheless, the individual(s) assigned ultimate responsibility and accountability for the system of quality management remains responsible and accountable for the evaluation.

INDEPENDENT ASSURANCE PRACTITIONER’S LIMITED ASSURANCE REPORT TO PARLIAMENT ON SELECTED KEY SUSTAINABILITY INDICATORS

Report on selected keysustainability indicators

We have undertaken a limited assurance engagement on selected key sustainability indicators, as described below, and presented in the 2023-24 Integrated annual report of the Auditor-General South Africa (AGSA) for the year ended 31 March 2024 (the report).

Subject matter

We have been engaged to provide a limited assurance conclusion in our report on the following selected key sustainability indicators, prepared in accordance with the Global Reporting Initiative (GRI) G4 Standards.

Category Key Sustainable Indicators Scope of Coverage
Economic Application of the funding model.
Amounts and initiatives in respect of:

 

  • Trainee auditors scheme
  • Preferential procurement
  • Corporate social investment
Republic of South Africa
Social Amounts and initiatives in respect of:

  • Bursaries and scholarships
  • Rural schools programme
  • Social responsibility programmes
  • Enterprise and supplier development
Republic of South Africa
Cultural Disclosures in respect of:

  • Employee profile
  • Diversity
  • Staff turnover
  • Ethics training initiatives
  • Employee wellness programmes
  • Employee relations
Auditor-General of South Africa
Stakeholder
engagements
Disclosures in respect of:

  • Employees
  • Auditees
  • Constitutional stakeholders
  • Media
  • Professional bodies
  • Regulatory bodies
  • Citizenry
  • International stakeholders
Republic of South Africa

Deputy auditor-general’s responsibilities

The Deputy Auditor-General (DAG) is responsible for the selection, preparation and presentation of the selected key sustainability indicators in accordance with the GRI G4 Standards. This responsibility includes the identification of stakeholders and stakeholder requirements, material issues, commitments with respect to sustainability performance and design, implementation and maintenance of internal control relevant to the preparation of the Report that is free from material misstatement, whether due to fraud or error.

The DAG is also responsible for determining the appropriateness of the measurement and reporting criteria in view of the intended users of the selected key sustainability indicators and for ensuring that those criteria are publicly available to the Report users.

Our independence and quality control

We have complied with the independence and all other ethical requirements of the Code of Professional Conduct for Registered Auditors, issued by the Independent Regulatory Board for Auditors (IRBA), that is consistent with the International Ethics Standards Board for Accountants International Code of Ethics for Professional Accountants, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior.

Crowe JHB applies the International Standard on Quality Management 1, and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Auditors responsibility

Our responsibility is to express a limited assurance conclusion on the selected key sustainability indicators based on the procedures we have performed and the evidence we have obtained. We conducted our limited assurance engagement in accordance with the International Standard on Assurance Engagements (ISAE) 3000 (Revised), Assurance Engagements other than Audits or Reviews of Historical Financial Information, issued by the International Auditing and Assurance Standards Board. That Standard requires that we plan and perform our engagement to obtain limited assurance about whether the selected key sustainability indicators are free from material misstatement.

A limited assurance engagement undertaken in accordance with ISAE 3000 (Revised) involves assessing the suitability in the circumstances of AGSA’s use of GRI G4 Standards as the basis of preparation for the selected key sustainability indicators, assessing the risks of material misstatement of the selected key sustainability indicators whether due to fraud or error, responding to the assessed risks as necessary in the circumstances, and evaluating the overall presentation of the selected key sustainability indicators.

A limited assurance engagement is substantially less in scope than a reasonable assurance engagement in relation to both risk assessment procedures, including an understanding of internal control, and the procedures performed in response to the assessed risks. The procedures we performed were based on our professional judgement and included inquiries, observation of processes followed, inspection of documents, analytical procedures, evaluating the appropriateness of quantification methods and reporting policies, and agreeing or reconciling with underlying records.

Given the circumstances of the engagement, in performing the procedures listed above we:

  • Interviewed management and senior executives to obtain an understanding of the internal control environment, risk assessment process and information systems relevant to the sustainability reporting process;
  • Inspected documentation to corroborate the statements of management and senior executives in our interviews;
  • Tested the processes and systems to generate, collate, aggregate, monitor and report the selected key sustainability indicators;
  • Performed a controls walkthrough of identified key controls;
  • Inspected supporting documentation on a sample basis and performed analytical procedures to evaluate the data generation and reporting processes against the reporting criteria;
  • Evaluated the reasonableness and appropriateness of significant estimates and judgments made by the DAG in the preparation of the selected key sustainability indicators; and
  • Evaluated whether the selected key sustainability indicators presented in the Report are consistent with our overall knowledge and experience of sustainability management and performance at AGSA.

The procedures performed in a limited assurance engagement vary in nature and timing, and are less in extent than for a reasonable assurance engagement. As a result, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had we performed a reasonable assurance engagement. Accordingly, we do not express a reasonable assurance opinion about whether AGSA’s selected key sustainability indicators have been prepared, in all material respects, in accordance with GRI G4 Standards

Limited assurance conclusion

Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention that causes us to believe that the selected key sustainability indicators as set out in the subject matter paragraph above for the year ended 31 March 2024 are not prepared, in all material respects, in accordance with GRI G4 Standards.

Other matters

The maintenance and integrity of the AGSA’s website is the responsibility of AGSA management. Our procedures did not involve consideration of these matters and, accordingly, we accept no responsibility for any changes to either the
information in the Report or our independent limited assurance report that may have occurred since the initial date of its presentation on AGSA’s website.

Restriction of liability

Our work has been undertaken to enable us to express a limited assurance conclusion on the selected key sustainability information to the AGSA in accordance with the terms of our engagement, and for no other purpose. We do not accept or assume liability to any party other than AGSA, for our work, for this report, or for the conclusion we have reached.


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Raakesh Khandoo

Partner
Registered Auditor

Rivonia
31 July 2024

AUDIT COMMITTEE REPORT

Introduction

This audit committee (the committee) report is based on the requirements of section 40(6)(a) of the Public Audit Act 25 of 2004 (the PAA) and the committee’s terms of reference.

The committee is pleased to present its report for the 2023-24 performance year, to the Standing Committee on the Auditor-General (Scoag) and all other stakeholders of the Auditor-General of South Africa (AGSA).

Committee governance

The committee is a statutory oversight structure, constituted in terms of section 40 of the PAA and appointed by the Auditor-General (AG). It is accountable to both the AG and Scoag.

The composition of the committee is outlined in section 2 of this report. In line with the PAA, all members of the committee are independent of the AGSA. Furthermore, the members have periodically declared their independence and that they are free of any conflict of interest in discharging their statutory duties throughout the reporting period.

The committee’s terms of reference, which are in line with best practice are reviewed annually and are approved by the AG. In support of the terms of reference, the committee compiles an annual work plan that guides its activities.

The committee conducted its affairs and discharged its responsibilities to enable it to conclude that:

  • the system of internal controls over financial reporting was adequate and operated effectively
  • risk management processes were adequate and effective
  • the organisation has the necessary skills, experience and financial expertise to perform
    its duties.

Activities of the committee
External audit and evaluation of the annual financial statements

The committee assessed the external auditor’s independence, Crowe JHB (Crowe) as required by section 39(2)(b) of the PAA and is satisfied that their objectivity was not impaired.

As regards the external audit, the committee performed its duties including:

  • considered the audit approach and audit risks in approving the external audit plan
  • reviewed the financial statements and concurred with management that the AGSA is a going concern
  • considered the appropriateness of the accounting policies, accounting treatments, any significant unusual transactions and judgement areas, and also reviewed compliance with International Financial Reporting Standards and the PAA
  • reviewed the annual financial statements
  • considered the management report received from the external auditors and reviewed the summary of unadjusted differences
  • reviewed both audit reports on the annual financial statements and on performance against predetermined objectives
  • monitored the provision of non-audit services to ensure they are within stipulated thresholds so as not to compromise the independence of the external auditors
  • met separately with the external auditors, in the absence of management, to ascertain that the quality, credibility, and effectiveness of the external audit process was maintained
  • received confirmation that no pressure was exerted on the auditors to suppress any findings nor were there any scope limitations placed on their work
  • reviewed the integrated annual report (IAR) and considered relevant factors and risks that may impact on the integrity of information in the IAR

After reviewing the management representation letters addressed to Crowe, the committee recommended that the deputy auditor-general (DAG) sign the annual financial statements and that the AG and DAG sign the IAR.

Having considered the independence of Crowe, the committee recommends their re-appointment for the 2024-25 financial year. In line with the rotation policy of the AGSA and of Crowe, Mr Khandoo who has served as the engagement partner for seven years, will rotate off. As such Mr Gary Kartsounis will be the new engagement partner. According to section 39(1) of the PAA, Scoag has the authority to appoint the external auditor and does so on an annual basis.

Internal audit

SNG-Grant Thornton (SNG-GT) are the internal auditors of the AGSA and have completed the second year of their contract period. The internal auditors presented an audit plan that operates on a three year rolling basis, within which all key finance functions of the organisation are covered at least once during the three year cycle.

In accordance with its terms of reference and the internal audit charter, the committee:

  • reviewed and approved the annual internal audit plan and the internal audit charter
  • considered reports from the internal auditors on the work performed throughout the year and their annual written assessment
  • met separately with the internal auditors in the absence of management to ascertain that the independence, quality, credibility, and effectiveness of the internal audit process was maintained and received confirmation that no restrictions nor pressure were put on them to suppress audit findings.

The committee is assured that, considering the work done in the current year by the internal auditors, the system of internal control in place at the AGSA is adequate and is operating effectively.

Risk management

Under the stewardship of a chief risk officer, the Risk and Ethics business unit (R&E) is responsible for coordinating the risk management function in the AGSA.

The committee exercised oversight on:

  • the strategic risks of the organisation includingthe mitigation strategies
  • the strategic risk profile as well as risk appetitestatement for the period under review, andmonitored the organisation’s performance inrelation to the appetite measures defined,for the financial periods, 2023-24
  • the assurance received from the internal auditorson the risk management function, financial andinternal control environment, including fraud riskand compliance management systems
  • the combined assurance report, prepared in linewith the 2023-24 combined assurance matrix,and satisfied themselves that the assuranceobtained by all assurance providers in line withthe approved combined assurance plan forall significant risk areas is adequate.

Furthermore, the committee considered and approved the combined assurance plan for the 2024-25 performance period.

The committee is satisfied with its oversight over the adequacy and effectiveness of risk management processes employed by the organisation throughout the financial year to manage risks to an acceptable level.

Assessment of the finance function and the chief financial officer

The committee considered the composition, experience and skills set of the finance function,as well as the performance and expertise of the chief financial officer and is satisfied that all were appropriate to fulfil their responsibilities.

Key focus areas

During the 2023-24 performance period, the committee’s focus was on supporting the executive committee in the implementation of the #cultureshift strategy and on the information technology function.

Cybersecurity remains an area of focus for the organisation, given the inherent risk associated with our legacy systems. The AGSA has crafted a comprehensive digitisation strategy which is the blueprint to modernise the environment and also assist in managing the cybersecurity risk. In the short term, there are mitigating controls in place to address high risks, while the digitisation strategy addresses sustainable solutions through medium to longer term programmes.

In preparation for the 2024-25 performance period, the committee continues to provide oversight and monitor IT security related risks. The committee augments its capacity to provide oversight through continuous improvement opportunities such as the attendance of cybersecurity workshop, implementation of ISO 27001 international standards for information security management and the addition of IT skills and solid experience to the committee. Strengthening the committee with these capabilities and knowledge supports the continuing organisational work to close off on all ICT/cyber security-related audit outcomes.

Furthermore, the committee will continue to pay attention to the implementation of strategic initiatives, given the ongoing implementation of the #cultureshift2030 strategy.

Conclusion

The committee concludes that the system of internal controls over financial reporting, the risk management activities, as well as the combined assurance processes of the AGSA, are adequate and operating effectively. The committee will continue to focus on the IT environment, given the heightened IT risk, where the controls were deemed partially effective.

Finally, the committee is satisfied that it has adequately discharged its responsibilities as outlined in various statutory and other governance documents during the current financial year.

REMUNERATION COMMITTEE’S REPORT

Background

The auditor-general is responsible for determining the terms and conditions of employment of all employees in the organisation, in accordance with section 34(3) of the PAA. The remuneration committee (remco) was established to provide specialised advice to the auditor-general on remuneration and related issues, while the final decision-making rests with the auditor-general. The AGSA’s remco was established as an oversight governance structure with the primary purpose of ensuring that the organisation’s remuneration principles, policies and practices are fair and transparent to promote the achievement of strategic objectives.

Remuneration committee membership

To ensure adherence to good governance practices, the members of the remuneration committee are appointed for a period of three years subject to an annual review. In the 2023 24 financial year, there were some changes in the remuneration committee resulting in the appointment S Cele effective from 1 August 2023. Furthermore, Ms M Nkeli’s term as the chairperson ended 31 March 2024, we thank her for her valuable service during her tenure.

The remuneration committee for the 2023-24 financial year consisted of the following members:

  • Mpho Nkeli (Outgoing Chairperson – Term ended 31 March 2024
  • Tantaswa Fubu (Deputy Chairperson)
  • Sifiso Cele (appointed effective from 1 August 2023)
  • Nazlie Samodien (member) and
  • Vonani Chauke (Deputy Auditor-General as a member)

An overview of the main provisions of the remuneration policy

The organisation has developed a remuneration policy, procedures and processes that are made available to all employees. Any amendments to the policy principles are communicated to employees following consultations (where applicable).

The AGSA’s approach to recognising and rewarding employees is based on a total reward philosophy in which the benefits of working for the AGSA are considered in their entirety, considering a whole range of financial and non-financial benefits, rewards and the working environment. The total reward policy has been designed to support the achievement of the organisational objectives, reinforce organisational values and behaviours, as well as recognise outstanding contributions made by individuals and teams.

The implementation of the policy principles is executed in accordance with the provisions of the organisation’s management approval framework (MAF), the performance management framework and the following total reward philosophy principles:

  • AGSA is committed to rewarding employees in line with our values and objectives.
  • We want to attract the best talent that shares our vision of being an institution that enhances public sector accountability and services the nation in public service.
  • We are committed to assisting our employees in fully understanding our remuneration packages and offerings.
  • We want to offer our employees a clear growth path that encourages them to build rewarding careers with us.
  • We believe in paying for qualifications, skills and experience that add benefit to our organisation.
  • We want to ensure that our employees are rewarded for good performance and behaviour that instils trust, care and ethics.
  • We want to promote a healthy work-life balance for our employees which includes recognition and flexible work arrangements.

Internal and external factors that influenced remuneration

Remuneration considerations and decisions are based on a combination of external and internal factors, which are:

  • Sustainability of the organisation – budget considerations and financial affordability
  • Market relativity and industry market positioning
  • Attraction, retention and employee engagement considerations
  • • Strengthening performance culture
  • Consumer price index (CPI) / inflation
  • Economic outlook

Key areas of focus by the remuneration committee

The people strategy was tabled and recommended by remco. This strategy is underpinned by five strategic imperatives as reflected in the figure below:


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A workshop was facilitated to ensure that guidance was provided to focus on the people agenda.was provided to focus on the people agenda.

In the same year under review, the following areas were attended to by remco:

  • Organisation-wide remuneration review and benchmarking
  • Reward philosophy and strategy
  • Medical aid benchmarking and analysis
  • AG and DAG remuneration
  • Non-executive directors (NED) fees
  • Salary increase proposal for 2023-24 financial year

Remco also gave recommendations on the revised performance management framework, which mainly aims to achieve the following:

  • Drive collective accountability through a focus on team’s as well as individual’s performance.
  • Support and encourage mobility/career development and advancement of our people.
  • Provide support to employees to perform and develop to higher levels of performance in the now and future.
  • Improve the culture of dialogue, honest, constructive and forward-focused conversations in the organisation.
  • Encourage and hold leaders accountable for managing performance and developing talent.
  • Create a gateway for recognition and rewarding of excellent performance.

The committee reviewed and recommended the implementation of project Lungisa that was aimed at reconfiguring the corporate support function for future-fitness. Post this project, the AGSA implemented healing sessions across all portfolios, including those that were not directly affected as a commitment to the value of care.

Performance bonus

Remco reviewed the exco recommended performance bonus proposal and after consideration of the proposal, remco resolved to recommend that the AG to pay the recommended proposal of the total performance bonus, which is aligned to the performance bonus provision of R285 million in the budget for the 2023-24 financial year.

Use of remuneration consultants

While the organisation strives to use its internal resources to deliver on remuneration initiatives, it should be noted that there have been areas of specialty where external remuneration experts/consultants have been used due to the nature of benchmarking required. These include the following:

  • Market benchmarking – an area of specialty that can only be provided by service providers that are accredited as salary survey providers for the purposes of, among other things, developing pay scales, considering salary adjustment projections and best practices on executive remuneration.
  • Group risk benefits (i.e., group life, disability, funeral cover as well as the group pension fund) are all administered through the use of external service providers. These functions require specialist expertise and in-depth knowledge of various financial regulations and legislation.
  • Job evaluation – the organisation uses the services of external service providers for its job evaluation processes.
  • Review of the AGSA’s remuneration philosophy and strategy.
  • Review of the AGSA external committee members remuneration.

Remuneration to members of external governance structures and executive management during the reporting period

  • The AGSA has adopted a retainer fee approach. This approach entails that external committee members for governance structures will no longer be remunerated as per the Saica rate but rather a retainer fee will be paid to each member quarterly.
  • The AGSA remunerates its executives in terms of the AGSA remuneration policy and the details of executives’ remuneration are reported as per section 25.1 (Key management personnel compensation) of the integrated annual report.

Conclusion

The committee remains committed to provide guidance and advise on total reward and recognition strategies, principles, and decision, to align employee motivation with the organisation’s strategy. The committee appreciated that staff remained committed to achieving the goals of the organisation.

We wish to also thank the outgoing chairperson Ms Nkeli and expressed gratitude to her for her leadership and service to the AGSA and the country.


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Tantaswa Fubu

Remuneration committee Chairperson


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