Agricultural Sector Education and Training Authority
AGRICULTURAL SECTOR EDUCATION AND TRAINING AUTHORITY
(AGRISETA)
Rolling Three Year Strategic Internal Audit Plan
July 2013
Agricultural Sector Education and Training Authority (AgriSETA)
Rolling Three Year Strategic Internal Audit Coverage Plan
July 2013
APPROVED BY: / CHAIRPERSON OF THE AUDIT COMMITTEE – AgriSETA / APPROVED BY: / CHIEF EXECUTIVE OFFICERAgriSETA
PREPARED BY: / DIRECTOR
OMA CHARTERED ACCOUNTANTS INC.
INDEX
Page
1.Executive Summary
2.Introduction and Development of the Rolling Three Year Strategic Internal Audit Coverage Plan
3.Analysis of Risk Based Reviews
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Agricultural Sector Education and Training Authority (AgriSETA)
Rolling Three Year Strategic Internal Audit Coverage Plan
July 2013
1. Executive Summary
The Strategic Risk Assessment focused on identifying risks on a strategic and operational level.
In terms of the PFMA and Treasury Regulations, it is the responsibility of management to identify risks. As the appointed Internal Audit Service Provider, we used the risk assessment of AgriSETA in order to provide a basis for the development of a Rolling Three Year Strategic Internal Audit Coverage Plan for consideration by the Audit Committee.
2. Introduction and Development of the Rolling Three Year Strategic Internal Audit Coverage Plan
The Rolling Three Year Strategic Internal Audit Coverage Plan is a product of the Strategic Risk Assessment process. Internal Audit effort will be focused on the most significant areas which were identified. The Internal Audit Operational Plan (a separate document) for the 2012/2013 period was also a product of a facilitated process by Management.
In prioritising the activities for the purpose of compiling this Rolling Three Year Strategic Internal Audit Coverage Plan, the Impact assessment is the predominant factor for consideration, as this factor indicates the possible effect of the risk. The Likelihood assessment is a variable factor that is influenced by the adequacy and effectiveness of control strategies implemented by Management.
As part of our methodology, we have applied the following broadly outlined internal audit coverage as part of this plan, for the assessed main functions/sections:
Rating / Risk Categories / Definition / Suggested Audit Coverage20 – 25 / Maximum Risk / Fundamental/Critical / As this is high, a review of the controls identified for the risk should be performed on an annual basis
15 – 16 / High Risk / Serious / Extreme / As this is high, a review of the controls identified should be performed on a rotational basis. This basis should be determined by management but we would recommend an annual review
10 – 12 / Medium Risk / Significant / Major / As this is medium, a review of the controls identified should be performed on a rotational basis. This basis should be determined by management but we would recommend every 2 years
5 – 9 / Low Risk / Moderate / Management should have contingency plans in place to reduce the impact. This basis should be determined by management but we would recommend every 3 years as well
1 – 4 / Minimum Risk / Minor / We propose that no internal audit work is performed on this area unless management has specific areas, which they would like us to address as it is up to management to ensure sufficient controls exist
3. Analysis of Risk Based Reviews
Our Strategic Internal Audit Coverage Plan is based on the 20 reportable risks identified in the Process and Risk Overview Report. The focus areas identified as auditable processes given the assessment below includes:
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Agricultural Sector Education and Training Authority (AgriSETA)
Rolling Three Year Strategic Internal Audit Coverage Plan
July 2013
During the three years of the Strategic Internal Audit Coverage Plan, the Internal Audit function will be carried out in phases as indicated below. This is the proposed Rolling Three Year Strategic Internal Audit Coverage Plan resulting from our review of the results of the risk assessment process.
Risk No / Risk Description / Focus AreaAuditable Process / Residual Risk / Assurance Providers / Frequency of Review / Internal Audit Coverage Period
External Audit / Internal Audit / Management / 2012/2013 / 2013/2014 / 2014/2015 / 2015/2016
/ Incorrect calculation and payment of payroll / Corporate Services / 25 / / / / Annual / / / /
/ Inadequate Quality control for skills program achievements. / ETQA / 16 / / / Annual / / / /
/ Incomplete QCTO systems and structures / ETQA / 16 / / / Annual / / / /
/ Lack of formal guidelines relating to the payments for skills programmes / SSP / 16 / / / / Annual / / / /
/ Absence of proper integrated filing system. / ETQA / 16 / / / / Annual / / / /
/ Loose/misplaced documentation. / ETQA / 16 / / / / Annual / / / /
/ Inadequate auditing of training providers / ETQA / 16 / / / / Annual / / / /
/ Learners change or drop out without SETA being notified / Corporate Service / 12 / / / / Every 2 yrs / / /
/ Site visits not timeously conducted by the Learnerships department. / Corporate Service / 12 / / / / Every 2 yrs / / /
/ Payments made without valid Tax Clearance certificate / Corporate Service / 12 / / / / Every 2 yrs / / /
/ Payment processed and paid after thirty days / Corporate Service / 12 / / / / Every 2 yrs / / /
/ Disclosure of confidential information / Corporate Service / 12 / / / / Every 2 yrs / / /
/ Non payment of stipends by Service Providers / Corporate Service / 12 / / / / Every 2 yrs / / /
/ Inadequate quality of providers. / ETQA / 12 / / / Every 2 yrs / /
/
- Poor assessment and moderation.
- Insufficient monitoring systems.
/ Lack of reliable management information system and reporting. / ETQA / 12 / / / / Every 2 yrs / /
/ Lack of interdepartmental communication. / ETQA / 12 / / / Every 2 yrs / /
/ Unethical practice by clients and providers. / ETQA / 12 / / / / Every 2 yrs / /
/ Not receiving data on time from Skills Delivery Department and Quality Assurance department. / ETQA / 12 / / / / Every 2 yrs / /
/ Payments are released without reviewing the supporting documentation (EFT releaser). / Finance and Administration / 12 / / / / Every 2 yrs / / /
/ Not achieving grant payout targets / Grant / 12 / / / / Every 2 yrs / / /
/ Poor decision making by standing committees - e.g. Sub Sector Committees. / Office of the CEO / 12 / / / / Every 2 yrs / /
/ Lack of project and time management skills. / SSP / 12 / / / / Every 2 yrs / /
/ Skills Programmes not advertised adequately resulting in poor uptake in programmes offered by AgriSETA / SSP / 12 / / / / Every 2 yrs / /
/ Contractual performance of providers is not monitored against deliverables resulting in deliverables not met by the service provider / SSP / 12 / / / / Every 2 yrs / /
/ Unreliable allocation of credits and certification to learners. / ETQA / 12 / / / Every 2 yrs / /
/ Invoices and personal claims are submitted without a GL account. / Finance and Administration / 9 / / / / Every 3 yrs / /
/ Learnerships not approved in terms of Discretionary Grant policy, i.e. Not approved by Learnership Committee / Corporate Service / 9 / / / / Every 3 yrs /
/ Learnerships paid without adequate supporting evidence of training undertaken. / Corporate Service / 9 / / / / Every 3 yrs /
/ Learnership agreements are not timeously assessed, approved or rejected. / Corporate Service / 9 / / / / Every 3 yrs /
/ Learnerships registered do not adequately meet the needs of the sector. / Corporate Service / 9 / / / Every 3 yrs /
/ Inadequate leave control. / Finance and Administration / 9 / / / / Every 3 yrs /
/ Not serving the sector to the maximum - reference specifically to land reform actions. / Office of the CEO / 9 / / / Every 3 yrs /
/ Incorrect information on the database / Office of the CEO / 9 / / / / Every 3 yrs /
/ Inputs received from standing committees / Office of the CEO / 9 / / / / Every 3 yrs /
/ Shortage of staff. / Corporate Service / 8 / / / / Every 3 yrs /
/ Bribery from clients or service providers. / Corporate Service / 8 / / / / Every 3 yrs /
/ Backup plan for staff that are sick or on leave (who will take over to do the work?) – Succession Planning / Corporate Service / 8 / / / / Every 3 yrs /
/ Lack of performance management system. / Corporate Service / 8 / / / / Every 3 yrs / /
/ Permanent posts not filled. / Corporate Service / 8 / / / / Every 3 yrs /
/ Non existence of a Quality Management System. / ETQA / 8 / / / / Every 3 yrs /
/ Contractual performance of providers is not monitored against deliverables / Finance and Administration / 8 / / / / Every 3 yrs / /
/ Uninformed expenditure due to inadequate project management and controls / Finance and Administration / 8 / / / / Every 3 yrs /
/ Lack of understanding of roles and responsibilities and skills development arena of members on all committees. / Office of the CEO / 8 / / / Every 3 yrs /
/ Late, inappropriate or incorrect reporting resulting in incorrect management decisions / Office of the CEO / 8 / / / / Every 3 yrs /
/ Operational capacity to achieve DoL SLA severely hampered due to 10% Administration Funding limit / Office of the CEO / 8 / / / / Every 3 yrs / /
/ Disclosure of interests not timeously performed at Committee level / Office of the CEO / 8 / / / / Every 3 yrs /
/ Low level of interaction with stakeholders (employers, SDF’s, Training providers, Government). / Office of the CEO / 8 / / / Every 3 yrs /
/ Lack of performance management system. / Office of the CEO / 8 / / / / Every 3 yrs / /
/ Stakeholders are not working together to achieve NSDS targets. / Office of the CEO / 8 / / / / Every 3 yrs / /
/ Image of the AgriSETA / Office of the CEO / 8 / / / Every 3 yrs /
/ Overspending - e.g. ETQA. / Office of the CEO / 8 / / / / Every 3 yrs /
/ Info on scarce / critical skills is not communicated internally / Office of the CEO / 8 / / / Every 3 yrs /
/ Not achieving NSDS targets / SSP / 8 / / / / Every 3 yrs / /
/ Inaccurate capturing of data. / SSP / 8 / / / / Every 3 yrs /
/ Discretionary grant contracts not signed appropriately / SSP / 8 / / / / Every 3 yrs /
/ The process of grant allocations/approvals takes too long / Corporate Service / 6 / / / / Every 3 yrs /
/ The process of signing of contracts is too long. / Corporate Service / 6 / / / / Every 3 yrs /
/ Contracts awarded to providers that are not accredited at all. / Corporate Service / 6 / / / / Every 3 yrs /
/ Learnerships not registered with DHET / Corporate Service / 6 / / / / Every 3 yrs /
/ Progress reports and learners' attendance registers not attached to invoices. / Corporate Service / 6 / / / / Every 3 yrs /
/
- Lack of induction into AgriSETA.
- Lack of awareness of policies and procedures. (permanent and temp staff)
/ Lack of experience/training/ insight of staff. / Corporate Service / 6 / / / / Every 3 yrs /
/ Overlaps/duplication of work or gaps. / Corporate Service / 6 / / / / Every 3 yrs /
/ Personnel not working to their full potential. / Corporate Service / 6 / / / / Every 3 yrs /
/ Invoices being paid late - invoice process problems. / Corporate Service / 6 / / / / Every 3 yrs / /
/ Lack of structured communication within AgriSETA. / Finance and Administration / 6 / / / Every 3 yrs /
/ Inadequate IT support, back-up staff and infra structure. / Finance and Administration / 6 / / / Every 3 yrs / /
/ Possibility of double payments. / Finance and Administration / 6 / / / / Every 3 yrs /
/ Unauthorised travel bookings made / Finance and Administration / 6 / / / / Every 3 yrs /
/ Missing invoices, application forms and related documents. / Finance and Administration / 6 / / / / Every 3 yrs /
/ Asset register incomplete and not updated timeously after purchase of assets. / Finance and Administration / 6 / / / / Every 3 yrs /
/ Loss of assets are not timeously detected, recorded and assets disposed off not according to policy / Finance and Administration / 6 / / / / Every 3 yrs /
/ Liabilities may not be timeously discharged resulting in interest payments / Finance and Administration / 6 / / / / Every 3 yrs /
/ Invoices being paid late - invoice process problems. / Finance and Administration / 6 / / / / Every 3 yrs / /
/ Assets are moved from current location / Finance and Administration / 6 / / / / Every 3 yrs /
/ Assets not adequately insured and maintained / Finance and Administration / 6 / / / / Every 3 yrs /
/ Poor quality of information on WSPs and ATRs / Grant / 6 / / / / Every 3 yrs / /
/ Incorrect payments from SARS. / Grant / 6 / / / / Every 3 yrs / /
/ Incorrect grant payments. / Grant / 6 / / / / Every 3 yrs / /
/ Limited understanding / knowledge of the MoU and interpretation of the aligned budgets. / Office of the CEO / 6 / / / / Every 3 yrs /
/
- Inadequate integration of MIS system within each department.
- Inadequate information for the quarterly reports.
/ Information does not reach target audience - Primary (non-levy paying) / Office of the CEO / 6 / / / Every 3 yrs /
/ Lack of communication from board to staff regarding decisions taken - minutes should be available to managers. / Office of the CEO / 6 / / / / Every 3 yrs /
/ Inadequate succession planning for critical position and staff in general. / Office of the CEO / 6 / / / / Every 3 yrs /
/ Personnel not working to their full potential. / Office of the CEO / 6 / / / Every 3 yrs /
/ Five year back-log in Skills Programmes results. / SSP / 6 / / / Every 3 yrs /
/ No timeous communication relating to SETA focus and funding (especially discretionary funds) / SSP / 6 / / / / Every 3 yrs /
/ Lack of structured communication within AgriSETA. / SSP / 6 / / / Every 3 yrs /
/ AgriSETA staff uninformed with regard to Skills Strategy. / SSP / 6 / / / Every 3 yrs /
/ Building – image and maintenance. / Corporate Service / 4 / / / / Management Request / n/a / n/a / n/a / n/a
/ Building – image and maintenance. / Corporate Service / 4 / / / / Management Request / n/a / n/a / n/a / n/a
/ Permanent posts not filled. / Corporate Service / 4 / / / / Management Request / n/a / n/a / n/a / n/a
/ Important faxes could get lost, personnel still taking faxes from machine without being recorded (including 4th floor). / Office of the CEO / 4 / / / / Management Request / n/a / n/a / n/a / n/a
/
- Lack of induction into AgriSETA.
- Lack of awareness of policies and procedures. (permanent and temp staff)
/ Unclear departmental role definitions throughout AgriSETA. / Office of the CEO / 3 / / / / Management Request / n/a / n/a / n/a / n/a
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