RAL Strategising For Clean Audit In Board Planning Session
FOR CLEAN AUDIT IN BOARD PLANNING SESSION
The Roads Agency Limpopo (RAL) Board of Directors held their strategic planning session recently to reflect on the 2017/18 financial year and plan for the financial year ahead.
The strategic session came on the back of the publication of the Agency’s 2017/18 Annual Report, which detailed the performance and audited financial results, and the release of the audit report of the Auditor-General of South Africa (AGSA) on the audited financial results of the Agency for the year ended 31 March 2018. (See story on page 6)
The Agency has retained the unqualified audit outcome from the AGSA for 2017/18, but it came with findings that the Agency has to implement.
Giving a key note address at the opening of the session, the Limpopo MEC for Public Works, Roads and Infrastructure the Honourable Nandi Ndalane in her capacity as the Shareholder representative issued a clarion call to RAL executive management to improve the audit opinion for the 2018/19 financial year.
“The implementation of the audit action plan, and the proper identification and recognition of fruitless and wasteful expenditure will help us in improving the audit opinion,” said MEC Ndalane.
Senior management of RAL, who had held their own strategic planning session a month earlier, were invited to make presentations to the Board on weaknesses and strengths of various business units on
“THE IMPLEMENTATION OF THE AUDIT ACTION PLAN … WILL HELP US IN IMPROVING THE AUDIT OPINION.”
improving the current audit outcome.
One input warned that the expenditure or multi-year projects that had already been flagged as irregular may threaten the next audit outcome when new expenditure is incurred in the subsequent financial year.
Some of the issues raised by the AGSA will be addressed by updating the asset register quarterly, benchmarking the Supply Chain Management (SCM)’s tender documents by end of the fourth quarter and other procurement matters, meeting 2018/19 Annual Performance Plan (APP) targets as per descriptive and technical indicators, and strengthening revenue collection, including the review, gazetting and approval of tariffs (including those for billboards) before the start of a financial year.
For these to be achieved, the session noted, the Agency has to fill vacant positions in the organisation including 37 that have been flagged as key and ‘critical’ needing urgent attention, particularly in the core Engineering and Finance divisions, to reduce overreliance on consultants.
Reflecting on the session itself, RAL CEO said they have to get a balance between getting a clean audit (administration) and road infrastructure service delivery.
“You have to find a balance between something that you can point on the ground that there is infrastructure that people are happy with and still ensuring full compliance.”
The session also acknowledged that the Agency’s budget is constrained and they have to strengthen their successful Strategic Partnership Approach, explore other opportunities to raise their own funds, and to find innovative ways and alternative technologies to reduce the cost of building roads.
To put it in context, at current estimates RAL will need R160 billion to maintain and upgrade the entire road network in Limpopo Province, or that will take 50 years at current budget allocation of under R1billion for the current financial year, one board member warned.
RAL Board Chairperson Matome Ralebipi and his team wanted clarity from management on steps to be taken to achieve a clean audit outcome from the AGSA, particularly sorting out the challenges in the SCM processes and asset register (physical existence of roads as mentioned in the annual report), the root cause which, he says, predates his Board.
Members of the Board and senior managers of Roads Agency Limpopo listening to an overview presentation by CEO Maselaganye Matji at a recent strategic planning session called by the Board.