Publication: Business Day Weekender Issued: Date: 2006-11-18 Reporter: Linda Ensor Reporter:

Meet SA’s New Auditor-General

 

Publication 

Business Day Weekender

Date

2006-11-18

Reporter

 Linda Ensor

Web Link

www.bday.co.za

 

Terrence Nombembe vows to make clear the risk and prevalence of corruption and fraud, and the need to prevent it, writes Linda Ensor

SA’s newly appointed auditor-general, Terence Nombembe, is bursting with enthusiasm and has ambitious plans to take the auditor-general’s office to new heights, and to root it in the consciousness of ordinary people.

From the beginning of next month Nombembe will step into the shoes of departing auditor-general Shauket Fakie, taking over an establishment of about 1 700 employees and a budget of close to R1bn. He will be the first African to do so in the 95-year history of the organisation.

When his term expires in seven years, 45-year-old Nombembe says he would like the auditor-general’s office to have developed much closer relationships with its stakeholders, including ministers, accounting officers in all three spheres of government, auditors, MPs, media, suppliers and staff.

This ambition stems from an independent reputational survey undertaken recently which found that the auditor-general’s office was given only a 19% ranking by stakeholders, as against the international benchmark of 40%, which is considered good.

Nombembe said the poor image was due to a lack of understanding rather than negative perceptions *1, and he will be working hard to correct this.

When he leaves office ­ he expects the seven years to fly by very quickly ­ he would also like the office’s audit reports to be simpler, clearer and understood by ordinary citizens.

The auditor-general’s office, says this quiet, humble, affable man, should be deeply embedded in society. At the same time, renewed focus will be given to the quality of the reports *2.

Nombembe, described by his colleagues as strong and stubbornly independent *3, is undaunted by the inevitable political pressures that will be brought to bear on him and his office, both by government and by opposition parties. He is adamant about his determination to maintain the independence, integrity and objectivity of the office, for it to be a rock amidst the swirling political waters.

The constitutionally enshrined independence of the institution and the fact that it is not directly funded by the state but only through audit fees, provides a strong foundation for this aspiration, he believes.

Maintaining the independence of the office against both government interference and manipulation by other political interests will require agility. But Nombembe says he is not at all nervous of occupying this highly contested, hot seat.

“It is a job I am going to enjoy as it is one that can really add value,” he says.

“There will be challenges but we have already set a solid foundation. My predecessor Shauket Fakie was instrumental in helping set up that foundation ­ credibility, independence and transparency *4. Our task is to protect these gains and take the organisation to even greater heights.”

Nombembe assumes office at a time when several government departments are grappling with corruption, which is perceived in some quarters to have become almost endemic *5.

He does not believe, however, that the situation has reached crisis proportions, and says it will be important for the office constantly to make clear the risk and prevalence of corruption and fraud, and the need to prevent it.

“Even before corruption takes place, the public must know that there is a risk. This a role we can play,” Nombembe says. “Once corruption has happened, it becomes difficult to establish whether it is a widespread issue or whether it is an isolated issue.”

In other words, it is easy for one incident to be generalised and to overshadow good practices in government. It is the role of audit reports, Nombembe explains, to provide an assessment of the robustness or otherwise of the environment in which individual acts of corruption take place.

With regard to auditing government departments, Nombembe said the focus for the office would be to assist them in stabilising their financial management practices before moving towards value-for-money auditing.

“For now our focus is to get the basics right in terms of fundamental financial management practices within government so that they are much more sustainable.”

Several government departments have repeatedly received qualified audits on their financial statements but Nombembe believes it is important to analyse and identify the causes of the weaknesses. Most of the qualifications of the financial statements of departments, he notes, stem from their failure to comply with already established policies and practices, itself a function of a lack of capacity, staff and systems.

It is not a question of there being no underlying framework, but rather one of a high level of noncompliance.

Before his appointment Nombembe was the deputy auditor-general responsible for the internal operations of the office.

A major focus has and will be the recruitment of young auditors. Currently the office is training about 600 auditors.

Another key challenge, says Nombembe, will be to run the office in a cost-effective way so that the costs of the audits are kept within reasonable limits.

As in any institution in SA, there is the need to achieve and maintain equity. There are also international obligations both to perform foreign audits and to participate in international forums with other auditors-general.

Commenting on his successor, Fakie said: “With a leader like Terence at the helm, I know and am confident the auditor-general is in capable and safe hands. During the time we have closely worked together, he struck me as a visionary who is prepared to motivate and work closely with his team to achieve our common vision of delivering efficient service to our stakeholders.”

Nombembe was born in Qumbu in Eastern Cape.

He graduated with a Bachelor of Commerce from the University of Transkei in 1982 before he completed his Bachelor of Computing (Honours) at the University of SA in 1986.

He qualified as a chartered accountant in 1990 and joined BP Southern Africa in Cape Town in 1991 as senior internal auditor.

In 1997, he helped establish and was a partner-in-charge of auditing firm Gobodo Incorporated.

He initiated the establishment of Gobodo Corporate Governance Services, an internal audit division which operates nationally and which has regional offices in Cape Town and Pretoria.

Nombembe has a wife, Nokwanda, and three children, Mphiwa, Fezekile and Kamvalethu.

With acknowledgements to Linda Ensor and Business Day Weekender.


*1       Nonsense, the OAG's poor image is because Terrence Nombembe's predecessor , Shauket Fakie, was caught red-handed lying to parliament and for perpetrating the biggest cover-up in the country's history, i.e. the Arms Deal. In doing so Fakie shot himself and the OAG in both feet as close range.


*2      A good start would be to not allow one's auditees to interfere with the contents and findings of one's forensic reports.


*3      Good, unlike his predecessor who was weak and a stooge of the government.


*4      Nonsense, the OAG had a proud history of excellent and independent Auditor-Generals, culminating with Henri Kluever. Fakie sold out the OAG's credibility, independence and transparency for 20 pieces of silver.


*5      The fish rots from the head down.