South Africa - Public Financial Management Risk Assessment Framework
Stage 2 Assessments
IBI completed three Public Financial Management Risk Assessment Framework (PFMRAF) Stage 2 assessments of three public entities in South Africa, namely, the Reconstruction and Development Program (RDP) Fund and the Departments of Basic Education (DBE) and Social Development (DSD). The objective of these assessments was to ascertain the fiduciary risks related to the government-to-government funding for implementation of USAID-funded HIV prevention and treatment programming, and to propose measures to mitigate these risks.
IBI assessed key areas in the target entities, including: organizational structure; budget formulation, planning, and execution; procurement processes and procedures; information technology systems and data security; and external and internal audit performance, among others.
Through key informant interviews (KIIs) with officials responsible for the governance, management, and day-to-day operations, IBI documented business processes. Subsequently, the team analyzed a representative sample of transactions from the target entities, which served to evaluate qualitative data garnered from KIIs against quantitative financial data. Based on the results of both the business process analysis and the testing of transactions, the assessment team identified potential and demonstrated fiduciary risks including their associated likelihood and impact. For each risk identified, the assessors documented its source or cause, and presented the most suitable risk management procedure to mitigate it.