Transcript Governance: Challenges & Possible Solutions

Governance: Challenges &
Possible Solutions
Audit and Risk Indaba
28 October 2011
Challenges
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Unclear roles and responsibilities between the Audit Committee and MPAC
Internal Audit – no space to periodically assess the state of ethical climate in
municipalities
Municipalities lack capacity to assess the effectiveness of organisation strategies
(IDP, SDBIP) tactics, communications and other processes in achieving desired
level of legal and ethical compliance
No dedicate governance officials and ethics assessor to assess organisation ethic
climate in municipality i.e. Ethics advocates (local ombudsman at municipal level)
No ethics committees
There are serious leadership and governance challenges in municipalities
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Weak responsiveness and accountability to communities;
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No dedicated ethics advocates:
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to ensure that codes and conducts and statements of visions,
mission and policy are important declarations of the organisation’s
values and goals, that aligns with the objectives set out in the IDP
and SDBIPs
No consistency and value-add in in-year reports i.e. MFMA Section 71, 72, 121,
129 and MSA 46
Possible Solutions
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Audit Committee responsibility is ito Section 166 and to provide assurance that
internal controls are in place
Empower MPAC members with skills and competencies to execute their mandate,
through training and development (such as workshops, learning from best
practices.
MPAC Deals with matters referred to it by Council i.e. Section 32 – Fruitless,
wasteful and irregular expenditures – can conduct investigation with the Audit
Committee and recommend to Council for further action i.e. write-off or recovery
– Establish clear terms of reference for MPACs
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Propose appointment of Ethics Advocates (eg Compliance and Ethical
officer/assessor)
– Assessment of Ethical Conduct
– Essential that municipality assigns responsibilities to Chief Ethics Officers
– As counselor of the administration, managers and others and as champion within the
organisation “doing the right thing”
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Establish Ethics Committees with clear terms of reference (Treasury can lead to
develop such)
Strengthen the governance structures i.e. Internal Audit, Audit Committee, MPAC
and Ethics Committees
Possible Solutions
• “Evaluate the effectiveness and enhancement of the following:
– Monitor the code of conduct i.e. applicable legislation eg. Constitution , MSA
– Ensure frequent communication and demonstration of ethical attitudes and
behaviour by influential leadership of the organisation
– Explicit Strategies to support and enhance ethical culture, i.e implementing
regular programs to update and renew the organisation’s commitment to an
ethical culture
– Confidentiality report of any transgressions
– Embarking of awareness campaigns amongst stakeholders i.e employees,
suppliers and community
– Clear delegation of responsibilities
– Easy access of learning opportunities
– Make it easy for the public to report confidentially to violations of ethics
– Positive personnel practices that encourage every employee to contribute to
the ethical climate in the organisation
Possible Solutions
– Easy access of learning opportunities
– Make it easy for the public to report confidentially to violations of ethics
– Positive personnel practices that encourage every employee to contribute to
the ethical climate in the organisation
– Regular surveys of employees, suppliers and customers to determine the state
of the ethical climate in the organisation.
– Regular reviews of the formal and informa processes within the organisation
that could potential create pressures and biases that woul undermine the
ethical culture
– Regular reference and background checks as part of the human resource
recruitment procedures, including integrity tests, drug screening and similar
measures”
Possible Solutions
• Delegate responsibility to ensure ethical consequences
are evaluated, confidential counselling is provided,
allegation of misconduct are investigated, and case
findings are properly reported.
• Regularly review processes that could potentially
create biases that would undermine the ethical culture
• Ensure background checks as part of the recruitment
processes i.e. integrity tests, drug screening etc,.