Over the last four years we consciously adopted continuous improvement as thee approach that will help us to embed a culture of performance in the Department. That approach permeated through to all levels of the organization. Hence we now performing above 80%. To be precise, for Q2 we are at 87%. Continuous improvement implies that we are going to constantly review how we do our work in order to identify those areas that have a potential to drag us down or overshadow the successes we have already registered. Continuous improvement, or Kaizen, is a method for identifying opportunities for streamlining work and reducing waste.

What kind of waste are we talking about? Well, to use a language we all familiar with, in this instance, waste refers to irregular, fruitless, and wasteful expenditure. As you all know that regulatory audit is not the only thing that we should concern ourselves with. We should all be concerned about performance information. The claims we make as being our achievements. One of the AG findings is that an inspector issued a notice before even undertaking the inspection. This talks to the authenticity, reliability of information that we collect and the integrity of the performance outcomes. Lastly, there’s obviously an ethical dilemma that we have to deal with.

Those of you familiar with the audit process, you’ll know that there are four types audit comes that an organization could get, qualified, unqualified, adverse and disclaimer. We have over the last five years, tested all four of them. As we speak, CF has a disclaimer, UIF has a qualification, SEE has a qualification, DEL has an unqualified audit with findings.  The common thread to all the findings is the failure by management to monitor and control thereby compromising the internal controls. It doesn’t matter the level at which such a breach of internal control occurred, the general understanding is that management must exercise its control over the functionaries. This therefore, compels us to look at the whole value chain to identify where problem lies and how we can resolve those challenges. That is why all of you are here today. If we want to improve our audit outcomes, we have got to engage the line function managers who are a cog in this value chain. 

Colleagues, we now need to aspire to get a “Clean Audit Outcomes”. What is a clean audit outcome? A clean audit is an unqualified audit and a “clean audit” relates to three aspects; the financial statements are free from material misstatements, there are no material findings on the annual performance report and lastly, there are no material findings on non-compliance with key legislation. Can we achieve this? I believe so. We already have labour centers that obtained clean audit outcomes. We simply have to build on that. Getting a clean audit outcomes will require that we act and behave responsibly. We will have to take accountability to a highest level. We will have to show a high level of intolerance towards those who have no regards for internal controls. We will have to tighten controls in areas where there’s non or controls are inadequate.

So today is about understanding where the problems are and how best we can utilize internal audit and risk management unit to achieve our aspirational goal of a clean audit outcome over the next two years. Today is the beginning of a march towards achieving that goal. As you know a leader is as good the people that it leads. Again as we have done when we decided to improve our performance, we will step on each other’s toes so as to achieve this fit of a clean audit. Whatever, happens as from today onwards , know that it is not personal. So as I close the chapter of my first five years which was mainly focused on embedding a culture of performance I now journey into my second five year term at the helm of this Department, my preoccupation will be on performance and governance and thereby achieving Clean Audit Outcomes. To achieve this, I will rely on all of you especially Internal Audit and Risk Management. Management will have to account with regards to a failure to implement both Internal Audit and Risk Management recommendations. Ukwenjenje oku ndihlab’ikhwelo. IsiXhosa sithi “Ikhwelo lityala” 

Thank you

Thobile Lamati

Director General

Employment and Labour