We finalised the final plotting for national, provincial and local government, based on the 2022-23 audit outcomes. This forms a baseline for tracking scorecard measures on auditees’ movement towards our ultimate aspiration. Below is a summary of national, provincial and local government auditees plotted against the revised framework.

We cannot overstate the importance of our audit teams crafting culture shift and influence plans relevant and responsive to the unique challenges of their specific auditees. Therefore, our commitment is to ensure that our culture shift plans focus on moving key auditees, especially those auditees that receive a significant portion of the government budget, along the continuum over the coming years.

Since we began our #cultureshift2030 journey in 2022, we have been clear about its ultimate aspiration: creating a consistent, meaningful and sustainable improvement in auditee performance and ultimately the lives of ordinary South Africans. To achieve this aspiration, the underlying culture of the public sector needs to move to one where the public service consists of auditees whose operations are characterised by strong Pati indicators. To assess auditees’ progress, we use Pati as a framework to measure progress.

In our second year of implementing the #cultureshift2030 strategy, we focused on assessing signs of change in the public sector culture. Based on the Pati framework and auditee plotting, we observed that certain auditees have shown some progress, while others have not shifted at all. We identified coordinating institutions, infrastructure, service delivery, clean auditees and disclaimed auditees as sectors where increased progress is imperative.

The overall performance of metros paints a bleak picture given the extensive role that they play in the lived realities of South Africa citizens. The sector still requires significant work to ensure that there is an improvement on all of the indicators that our Pati model unpacks. Metros continue to face challenges relating to revenue collection, interest and penalties, poor payment practices, uneconomical procurement practices and weaknesses in project management that result in undue additional costs.

A lack of accountability and transparency is also seen through the continued use of their budget for the next year to cover current year spending. In addition, current liabilities are more than half of their next year’s revenue budget, which puts the implementation of future planned service delivery targets at significant risk.

To help turn metros around, we intend to advocate for the following interventions:

• Continue to focus on integrated planning to influence the adequate allocation of budget to priorities and the alignment of targets to provincial and national imperatives with the aim of improving service delivery.
• Increase metros’ capacity and capability to deliver on their mandates and strengthen the culture of accountability by following through on the commitments to capacitate service delivery units, and the effective functioning of council committees.
• Strengthen the systems of internal control to enable the efficient use of financial resources, reduction of fiscal losses and improved budget processes to positively contribute to financial health.
• Elevate the need for greater coordination between provincial and local government leadership in strengthening service delivery and transparency.

The infrastructure sector is performing poorly on all Pati indicators, which is particularly concerning as the sector plays a key role in supporting service delivery across all three spheres of government. Over the past year, we again identified project management deficiencies and delays. There were gaps in infrastructure departments’ monitoring of grants issued to provincial and local government, and intergovernmental challenges that include a lack of ownership and requisite skills in the infrastructure environment.

To help improve this sector, we will focus our insights on the following:

• Integration and coordination of infrastructure planning and coherent execution across all spheres of government, including infrastructure
• Existence and effectiveness of a centralised monitoring function of infrastructure implementation
• Closer collaboration with all infrastructure roleplayers in the accountability ecosystem, including the South African Institution of Civil Engineering, Council for the Built Environment, Infrastructure SA and Association of Quantity Surveyors. These organisations currently use insights from our infrastructure work to address challenges in the industry.

Auditees in the sectors most dedicated to service delivery faced various challenges, such as limited budgets, causing them to miss their planned targets. This meant that they could not work at the level necessary to move their performance towards the category of doing good. We also found that inadequate reviews compromised the credibility of both the financial and performance reports of most service delivery auditees.

Despite this, we observed improvements at auditees such as the Passenger Rail Agency of South Africa and the Property Management Trading Entity, which improved their audit outcomes from disclaimed to qualified audit opinions. However, the Passenger Rail Agency of South Africa still needs to improve its responsiveness and posture in dealing decisively with issues of non-compliance, ethics and fraud.

To help turn this situation around, we will focus our efforts on elevating insights on critical service delivery areas to influence an improvement in the delivery and quality of basic services.

Auditees that received disclaimed audit opinions continued to struggle with the credibility of their performance reports and the achievement of their performance targets. We could not quantify their level of performance because performance information was unavailable. Overall, disclaimed auditees did not have effective, efficient or transparent accounting and information systems. Their systems did not support accounting and record keeping, resulting in poor audit outcomes annually. As a result, the disclaimed auditees performed poorly on all the Pati indicators.

Despite the challenges, some auditees responded to our call for accountability and transparency, which was encouraging.

Going forward, we will focus on the effectiveness of the designed plans, initiatives and interventions aimed at influencing improvement in the areas that result in continuous disclaimers.

In general, the clean audit cluster showed strong performance on most of the Pati indicators, specifically accountability, transparency and integrity. The one area that requires improvement is performance, or going beyond the financials and delivering the services required by their mandates. While clean audits lay solid foundations to advance service delivery, they do not always translate into good service delivery. Many auditees with clean audits struggle to achieve most of their performance targets.

Interventions to help these auditees improve their performance will include effective planning (e.g. completeness of performance indicators and targets relative to the needs of residents), budgeting and monitoring to meet their performance targets.

Coordinating institutions, such as the national and provincial treasuries, cooperative governance and traditional affairs, as well as the various offices of the premiers need to improve their performance, accountability and transparency. These auditees did not employ integrated government planning or have effective oversight and monitoring to address financial management, performance management and service delivery challenges. They generally did well on institutional integrity.

To help direct the areas of improvement, we will focus on the following:

• Strive to influence these institutions’ commitment to reworking their performance indicators so that they are more outcome-based, measurable and closely linked to their mandates.
• Influence better alignment among coordinating institutions that strengthen the public sector.
• Activate internal audit units and audit committees as key roleplayers in the accountability ecosystem to assist us to achieve combined assurance.

Internally, we have made significant strides on this strategic goal. These include ensuring organisational alignment on how we will go about implementing the #cultureshift2030 strategy (through the development of our culture shift framework) and conducting our first Pati analysis of key auditee sectors. However, our auditee environment is not improving as quickly, but we have always understood that changing organisational cultures will not be easy and will require long-term focus.

 We will continue to work with auditees and our accountability ecosystem partners to illuminate their understanding through impactful insights, and influence in a manner that will help them to improve the Pati indicators within their organisations.