Report of the Committee on the Auditor General on the salary package of the Auditor-General of the Republic of South Africa, dated 9 June 2011

The Committee on the Auditor–General, having considered the recommendations of the Remuneration Committee of the Auditor–General on the salary package of the Auditor-General, reports as follows:

1. Introduction and Background

The Committee on the Auditor-General (the Committee), established in terms of Rule 208A of the National Assembly Rules, read with Section 10(3) of the Public Audit Act, 2004 (Act No. 25 of 2004) is mandated in terms of Section 2 (c) of the Act to assist and protect the Auditor-General in order to ensure the independence, impartiality, dignity and effectiveness of the Auditor-General and to advise the National Assembly.

On 22 September 2006, the Committee recommended to the President of the Republic of South Africa in terms of Section 7(1) of the Public Audit Act, that:

• The Auditor-General to-be-appointed, Mr. TM Nombembe, receive a total remuneration package of R1,708,600.00 per annum commencing on 01 December 2006 to be reviewed annually:

• Mr. Nombembe is not entitled to an annual performance bonus, but should receive a termination bonus/deferred compensation on the successful completion of his term equal to 10% X average term compensation X years of the fixed term of office; and

• The total remuneration package is structured by
  Mr. Nombembe according to the parameters and guidelines as are generally applicable to the Office of the Auditor-General.

The recommendations were included in the President’s Act No. 349, dated 11 November 2006.

The Committee also indicated in the notice that “the entire remuneration dispensation of all public office-bearers, including the judiciary, is currently under review”. Section 7 (2) (b) of the Public Audit Act provides, amongst others, that the allowances and other benefits of a person appointed as Auditor-General must be substantially the same as those of the top echelon of the judiciary.

Whilst the remuneration dispensation of the Chief Justice has been reviewed, that of the Auditor-General, serving in accordance with the conditions of employment as determined prior to the said review, has not been adjusted.

2. Conclusion

In light of the above and after considering the submission from the Remuneration Committee of the Auditor-General, which relies on a benchmarking exercise undertaken by Alexander Forbes and the Chairperson of the Remuneration Committee, the Committee on the Auditor-General, in accordance with its statutory mandate, recommends to the President, subject to section 7(3) of the Public Audit Act, to do the following:

· To take note of the original salary offer to the Auditor-General, Mr. TM Nombembe, as well as the salary adjustments that were implemented during the past three years, to increase the Auditor-General’s annual salary package from R1,708,600.00 to R2,650,000.00, effective from 01 December 2006;

· Whilst the Auditor-General is not entitled to an annual performance bonus, to increase the termination benefit from 10 percent of the average term compensation for each year of service to 50 per cent of average term compensation for each year of service. This will compensate for the differences in the remuneration package of the Auditor-General as compared to the remuneration package of the Chief Justice; and

· To effect payment of back pay amounts in accordance with the parameters and guidelines as applicable to the Office of the Auditor-General.

For information.