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Unrevised Hansard National Assembly Tuesday, 19 March UNREVISED HANSARD NATIONAL ASSEMBLY TUESDAY, 19 MARCH 2019 Page: 1 TUESDAY, 19 MARCH 2019 ____ PROCEEDINGS OF THE NATIONAL ASSEMBLY ____ The House met at 14:01. House Chairperson Ms M G Boroto took the Chair and requested members to observe a moment of silence for prayer or meditation. CONSIDERATION OF REPORT OF STANDING COMMITTEE ON APPROPRIATIONS – PUBLIC AUDIT EXCESS FEE BILL There was no debate. The Chief Whip of the Majority Party moved: That the Report be adopted. Motion agreed to. UNREVISED HANSARD NATIONAL ASSEMBLY TUESDAY, 19 MARCH 2019 Page: 2 Report accordingly adopted. PUBLIC AUDIT EXCESS FEE BILL (First Reading debate) Ms Y N PHOSA: Chair, the hon Deputy President Mr David Mabuza, hon Ministers and Deputy Ministers, hon members, and the public in the gallery, I would like to take this opportunity to table the report of the Standing Committee on Appropriations on the Audit Excess Fee Bill of 2019. From the outset, let me indicate that the report was adopted by the committee unanimously, and it is available in the Announcements, Tablings, and Committee Reports of Parliament for hon members’ perusal. Chapter 9 of the Constitution of the Republic of South Africa, Act 108 of 1996, establishes the Auditor-General of South Africa as one of the state institutions supporting constitutional democracy. The Constitution recognises the importance and guarantees the independence of the Auditor-General of South Africa, stating that the UNREVISED HANSARD NATIONAL ASSEMBLY TUESDAY, 19 MARCH 2019 Page: 3 Auditor-General of South Africa must be impartial and must exercise its powers and perform its functions without fear, favour, or prejudice. The functions of the Auditor-General of South Africa are described in section 188 of the Constitution and are further regulated in the Public Audit Act, Act 25 of 2004. This Act mandates the Auditor-General of South Africa to perform constitutional and other functions. Constitutional functions are those the Auditor-General of South Africa performs to comply with the broader mandate described in the Constitution. Section 4 of the Act makes a further distinction between mandatory and discretionary audits. The Auditor-General of South Africa annually produces audit reports on all government departments, public entities, municipalities, and public institutions. Over and above these entity-specific reports, the audit opinions are analysed in general reports that cover both the Public Finance Management Act and Local Government: Municipal Finance Management Act cycles. In addition, UNREVISED HANSARD NATIONAL ASSEMBLY TUESDAY, 19 MARCH 2019 Page: 4 reports on discretionary audits, performance audits, and other special audits are also produced. The Auditor- General of South Africa tables reports to the legislature with a direct interest in the audit, namely Parliament, provincial legislatures, or municipal councils. These reports are then used in accordance with their own rules and procedures for oversight. Audit fees are charged by the Auditor-General of South Africa. Section 23 of the Public Audit Act, Act 25 of 2004, provides for the Auditor-General to determine the basis for the calculation and audit fees to be recovered from auditees in respect of audits, after having consulted the oversight mechanism and National Treasury. An auditee must settle the account for audit fees within 30 days from the date of the invoice, failing which the Auditor-General must promptly take legal steps to recover the amount unless it is not practical to do so. The Auditor-General may charge interest on any audit account not paid within 30 days of the date of the account at the rate prescribed in terms of section 1(2) of the Prescribed Rate of Interest Act, Act 55 of 1975. If an UNREVISED HANSARD NATIONAL ASSEMBLY TUESDAY, 19 MARCH 2019 Page: 5 auditee defaults on the payment of audit fees, the Auditor-General must promptly notify National Treasury and, when applicable, notify the relevant provincial Treasury. National Treasury or the relevant provincial Treasury, as may be appropriate, may, after consulting the Auditor-General, direct that audit fees recoverable from an auditee which is not a national or provincial department be defrayed from a vote on the national Budget or a provincial budget identified by the relevant Treasury. If the audit fee exceeds 1% of the total current and capital expenditure of such auditee for the relevant financial year, such excess must be defrayed from National Treasury’s vote, provided that National Treasury is of the view that the auditee has financial difficulty to settle the costs. This excludes national and provincial departments. The problem was that it was difficult to predict what these claims would be to budget properly for them. Historically, there has always been a shortfall between the amounts due and the funds appropriated for this by National Treasury. UNREVISED HANSARD NATIONAL ASSEMBLY TUESDAY, 19 MARCH 2019 Page: 6 The Public Audit Excess Fee Bill provides for the specified access of audit fees of certain categories of organs of state, payable to the Auditor-General, as envisaged in the Public Audit Act, Act 25 of 2004. If the stated conditions are complied with, it becomes a direct charge against the National Revenue Fund – no longer against the National Treasury vote – and the Act provides for matters connected therewith. That is the difference. There is a movement of trying to charge the funds from National Treasury, but this Act allows for these funds to be a direct charge from the National Revenue Fund. These changes were necessary to ensure the viability of the Auditor-General. Possible abuse by qualifying auditees would be curtailed by a provision that Treasury would still determine whether an auditee was unable to pay. National Revenue Fund only in terms of an appropriation by an Act of Parliament ... so, it is only by ... this Bill allows now for the direct charge from the National Revenue Fund. UNREVISED HANSARD NATIONAL ASSEMBLY TUESDAY, 19 MARCH 2019 Page: 7 In line with section 13(2) of the Money Bills Amendment Procedure and Related Matters Act, the committee has a responsibility to hold public hearings on any money bills and report on the Bill to the National Assembly. In the absence of any public submissions after the advertisement was placed in the national and regional newspapers from 1 to 8 March 2019, the Bill was adopted by the Standing Committee on Appropriations on 13 March 2019. The committee welcomes the Bill, as it will assist in unlocking the required resources and guarantee financial viability for the Auditor-General. The independence of the Auditor-General is sacrosanct, as it is guaranteed in the Constitution. The committee welcomes the recent amendments to the Public Audit Act, Act 25 of 2004. The significance thereof is that it will enhance the work of the Auditor- General of South Africa and enforce consequence management, which has been a big challenge. We strongly believe that the amendments to the Public Audit Act will assist in improving governance, internal controls and compliance, particularly with supply chain management UNREVISED HANSARD NATIONAL ASSEMBLY TUESDAY, 19 MARCH 2019 Page: 8 policies in government departments. The committee strongly recommends that the departments and public entities appoint independent audit committees and effective internal auditors and ensure that effective monitoring and evaluation units are in place and continually trained to discharge their responsibilities. Before I conclude, I would like to remind this august House that the Freedom Charter is 64 years old this year – that seminal document the freedom-loving people of our country adopted on 26 June 1955 in Kliptown, Soweto. On that day, 3 000 delegates arrived from all corners of our country – from towns and the rural areas. They came by train, bicycle, and on horseback, bearing in their hands pieces of paper containing demands from their communities. Simply translated, these demands pointed to a dream to bring about a new society, free from discrimination, oppression, and exploitation. These 3 000 delegates – young and old, workers, peasants, and intellectuals – were motivated by nothing else than a quest for freedom and a better life for all. They longed for a country and continent where all shall live as UNREVISED HANSARD NATIONAL ASSEMBLY TUESDAY, 19 MARCH 2019 Page: 9 equals, with equal opportunities, friendship, and brotherhood. As we table this Bill today and recommend its adoption, let us dedicate it to these heroes who gathered in 1955 to come up with this very important document that has informed our Constitution – the Constitution of the country – and continues to inform the programmes of the government of the day to bring about a better life for all. Let us make sure that our forebears, the heroes of the revolution, will look at us with great pride, not with disappointment – with great pride, for they shall know that they gave birth to sons and daughters who will never betray the revolution. The message here is that we should not betray the revolution and the people who died for this revolution. I dedicate this speech today to the heroes and heroines of our revolution, those who sacrificed everything, including life and limb, to ensure that South Africa is a free country today. Let them know that the Bill passed by this House today will only be used to bring about a UNREVISED HANSARD NATIONAL ASSEMBLY TUESDAY, 19 MARCH 2019 Page: 10 better life for all South Africans, not a certain section of South Africans or certain individuals, and a better future for all. Let this House continue to demand accountability, efficiency, competence, and value for money. Hon members, let us not tolerate incompetence, mediocrity, and laziness. Let jus not tolerate this. [Interjections.] We must continue to frown upon corruption and make sure that those who misuse public funds – and I repeat: those who misuse public funds – are punished, as they also hinder our fight to push back the frontiers of poverty.
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