SECTION 8: REPORT OF THE AUDIT AND RISK COMMITTEE

SECTION 8

REPORT OF THE AUDIT AND RISK COMMITTEE

The Audit and Risk Committee (Committee) is pleased to present its report for the financial year ended 31 March 2022.

Background

The Committee is a sub Board committee constituted in terms of Section 51(1) (a) (ii) and 76(4) (d) of the Public Finance Management Act (PFMA), read together with the National Treasury Regulation 27(1). The role and responsibility of the Committee are provided for in its Terms of Reference and any other duties delegated to it from time to time by Accounting Authority (the Board).

Terms of Reference

The Committee has adopted formal Terms of Reference (Charter), which were approved by the Board. Furthermore, the Committee reports that it regulated its affairs and discharged its responsibilities in compliance with its adopted Charter and the PFMA, read in conjunction with the National Treasury Regulations. The Committee has discharged its functions through attendance of Committee meetings and discussions with Executive Management, Internal Audit, Auditor General of South Africa and relevant external advisers where appropriate. The Committee is required to meet at least four times per annum, with the authority to convene special meetings as circumstances might require.

Membership and Attendance

The Committee’s Charter prescribe that it be constituted by three independent members as well as representatives from each constituency, which includes organised labour and organised employers. For the financial year under review, the Committee met four (4) times, as per its terms of reference which require a minimum of four meetings per annum. The Committee also convened One (1) special meeting to consider and recommend reports of the AuditorGeneral for Board approval. Below are details of meetings held during the year under review:

MEMBER CONSTITUENCY MEETING DATES

Adv J C Weapond 29 Jun 21 30 Jul 21 27 Jul 21 8 Jul 21 27 Aug 21 Independent √ √ √ √ √

P Phukubje* Independent √ M Sikhosana Independent Atlee Organised labour √ H. Jansen van Vuuren Organised labour √

S. Dlamini Mthethwa

Organised Employer E. Howes Organised Employer

* Chairperson of the Audit and Risk Committee

FEES RECEIVED

66 780,00

43 843,50 37 908,00

The Members of the Committee has the required qualifications, skills and experience in business, finance, accounting, internal audit, risk management, Information technology, legal and compliance management.

The Role and Responsibilities of the Committee

The Committee assists the Board in discharging its oversight responsibilities, which includes the evaluation of the adequacy and efficiency of accounting policies, internal controls, financial reporting processes, and technology and information governance.

The Chairperson (on behalf of the Committee) reports to the Board on a quarterly basis, regarding the Committee’s deliberations, decisions and recommendations in line with the approved Charter.

The key focus areas of the Committee for the 2021/22 Financial Year includes the following:

• Provide assurance over the integrity of the

MQA’s financial statements and accounting policies; • Provide assurance on the effectiveness of the internal control, governance and risk management systems; • Review the internal audit, risk management, compliance and the IT control environment; • Review of key risk and opportunity management, including mitigation plans; • Monitor the performance against predetermined objectives/ performance information.

Internal Audit

During the year under review, the Internal Audit function was outsourced to a service provider. The Internal Audit Charter and the Internal Audit Plan were approved by the Committee in accordance with the Internal Auditing Standard and its Charter. The Committee hereby confirms that the internal audit function has unrestricted access to all documents it requires to fulfil its function.

For the year under review the Internal audit function focused on key areas of risk, weaknesses which revealed control deficiencies within managements processes. The Board have agreed with the recommendations and findings of internal audit, Auditor General and the Committee.

The Effectiveness of Internal Control Environment

The Committee noted the significant improvement in the internal control environment both on the financial management and performance information. The MQA has attained the desired audit outcome commonly known as a clean audit in the year under review namely, no material misstatements were noted in the annual financial statements, no material non-compliance were noted and no material misstatements were noted on reliability and usefulness of reported performance information. The Committee intends to enhance its oversight to ensure that the audit outcome is sustained in the upcoming financial years.

Implementation of corrective actions

The AGSA’s review confirms that a number of the audit commitments made in the prior year were implemented through the implementation of appropriate corrective actions.

Risk Management

The Board has assigned oversight of the MQA’s risk management function to the Committee. The Committee fulfils an oversight role regarding the risks of financial reporting, internal financial controls, fraud risk and information technology as they relate to the annual financial statement and performance information.

Evaluation of the Financial Statements

The Committee has amongst others::

• reviewed and discussed the audited annual financial statements and performance report to be included in the annual report with the AGSA, with the Chief Executive

Officer and with the Board as the Institute’s accounting authority. • reviewed the AGSA’s audit report and management report on the findings of the audit and management’s response, and has reviewed all changes in accounting policies and practices.

• has noted and reviewed the AGSA’s assessment of the usefulness and reliability of performance information examined.

The Committee concurs with and supports the AGSA’s opinion on the Annual Financial Statements and other legal and regulatory matters, and is of the view that the audited Annual Financial Statements fairly presents the financial affairs of the MQA.

The Auditor-General South Africa

The Committee concurs and accepts the conclusions and the unqualified audit opinion on the Annual Financial Statements for the year ended 31 March 2022.

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Mr Phuti Phukubje

Chairperson of the Audit and Risk Committee Date: 31 July 2022