Navigating the new normal

Author Garth Pretorius CA(SA), Founder and Principal Owner, GPA Consulting and Training

As we reflect on the life-altering impact of COVID-19, we appreciate the innate human ability to adapt in order to survive. Amidst the fear and uncertainty, with the global economy forced to recede as the health crisis mounted, we had no choice but to clear a path forward and to navigate what we now know to be the new normal

Across the globe, COVID-19 has catalysed an unprecedented shift in the way of working across the public, private and social spheres alike. Globally there has been an effort to embark upon a drastic realignment exercise as organisations desperately sought to survive by any means necessary as a result of the mounting regression in economic activity. Yet, despite the toll that the pandemic has taken, through this chaos we have seen a long-awaited mind shift in the utilisation of resources and the realisation of dormant capabilities. When faced with the impossible, many organisations have demonstrated unwavering resilience and ingenuity through reimagination and reform. But can this bold compliment be bestowed on the public sector?

In my initial article, ‘The onus to change the narrative’, I sketched a scenario in relation to the current state of the public sector – depicting our government submerged in a body of water, unable to swim ashore. In this article I sought to identify key role-players with the ability to aid government (further expanded upon in ‘Calling all role-players’). Now, you may ask, given that government is barely remaining afloat, is resilience and reform beyond their grasp?

Consider this … what if the pandemic was the catastrophic event that government so desperately needed?

Before we dive into this tantalising discussion, let us look at our private sector counterpart. In the private sector sphere, many organisations have been faced with no choice but to cut capacity and costs as far as reasonably possible while keeping their businesses afloat through making strategic and agile business decisions. With many companies forced to look inward, they have identified new ways of utilising their resources in order to survive. A key element of success has been a flexible approach and reassessing the capabilities of the company.

To provide context, let us consider the food and beverage industry. For many consumers, there was no choice but to reduce non-essential expenditure and with this, the food and beverage industry saw a drastic shortfall in budgeted volumes. The carbonated beverage industry, for example, took a particular knock, as many products previously affordable to the general public became aspirational and out of grasp. So how, you may ask, did they survive? The simple answer is that for those that made it to the other side, it was a case of reinvention as they realised new capabilities through reverse integration measures. So, where survival alone seemed impossible, certain companies realised growth. In some ways, the same can be said for the public sector.

For the public sector, survival amidst COVID-19 was not only necessary but also essential given government’s mandate to serve the needs of the country’s citizens. Where reform became necessary for the private sector as a result of the pandemic, I believe the need for reform in the public sector had arisen long before. It is undeniable that there has been a need within the public sector for government to demonstrate resilience and drive reinvention across all existing spheres. It may seem that a global pandemic was the catalyst needed to drive reform in the public sector, as government was compelled to navigate the new normal.

In support of my view, let us consider the reinventive measures taken by government in relation to the role of Internal Audit.

First, consider the role of Internal Audit within the public sector and the functions that it facilitates. Internal Audit’s role is to consider the public sector mandate, to serve the citizens of the country and to uphold the principles of good governance in relation to accountability for funds collected from the public, and efficiency, effectiveness and equity in the delivery of goods and services.

How Internal Audit has undertaken to deliver against their mandate has been facilitated by key functions categorised into the areas of control, governance, and risk management. Each of these functions comprises setting strategies, providing oversight and instilling ethical practices.

Now that we have clarified the role of Internal Audit and its associated functions, I wish to pose the following question: If we consider the role of Internal Audit within the public sector and what is currently facilitated, are there not greater capabilities within this structure that could be realised? Put simply, is there room for reinvention? 

I believe that the answer to this question is an irrefutable yes. Although Internal Audit undoubtedly facilitates critical functions within government, there may be dormant capabilities from which untold potential benefits are yet to be derived.

Before we unpack this statement, let us remind ourselves of the current state of our government and the public sector as a whole. The global pandemic aside, our country is plagued with poor service delivery and a constrained fiscus burdened by fraud and corruption (I will not even begin to unravel the devastating PPE procurement fiasco) and is fraught with an overall lack of credible, reliable and aligned reporting.

As for South Africa’s public sector, I believe that the crux of the issues at hand vests in the segmented manner of working across the value chains of most government institutions. There is an inability to drive cohesion and a single vision in delivering optimal public service delivery, resulting in many structures functioning at less than optimal capacity.

It may seem that due to the global pandemic, we have seen a long-awaited mind shift within the public sector as government too has been forced to look inward and reimagine the capabilities of existing structures. What this has meant for Internal Audit is the birth of its leadership capabilities. If we consider Internal Audit’s governance role, coupled with the level of recognition from government and the fairly comprehensive guidance available in terms of legislation, it is clear that Internal Audit has long been held to a higher standard and possessed leadership potential − leadership that could drive cohesion and a single vision. However, until now we yet had to realise it.

So I return to my earlier statement. I believe that the need to demonstrate resilience and drive reinvention within the public sector was called for long ago … and rather than devastate the sector, a global pandemic may have been the catalyst to drive much-needed reform as government navigates the new normal.