The Standing Committee on the Auditor General (ScoAG) met with the Auditor-General of South Africa for an update on the process to date for appointment of an External Auditor. An appointment had to be made by the end of November to enable the audit firm to commence work immediately after the AGSA Audit Committee approved the external audit coverage plan at a special meeting in early January 2011. The Office of AGSA would struggle to meet its obligations if SCoAG did not approve appointment of an external audit firm by the end of November.
Members asked what guarantee there was that there would be a suitable candidate for SCoAG to be able to appoint an audit firm by the end of November and what plan was in place should Moore Stephens refuse to stand for re-appointment.
The SCoAG researcher then presented an analysis of the AGSA Budget and Strategic Plan 2011/12. AGSA clarified for SCoAG that two important statutory matters for SCoAG approval of the Budget and Strategic Plan 2011/12 were (1) approval of the updated tariff schedule – adoption by Parliament may require guidance; and (2) approval of the audit directive – scope of standards by which the auditors of public entities need to audit.
The researcher highlighted two questions from SCoAG - whether AGSA would borrow money in 2011/12 to cover the variance of R 5. 9 million finance charges between 2010/11 and 2011/12 and if bad debts would involve writing off some of the debtors, as R4.2 million provision was made for bad debt. AGSA clarified that the purchase agreement with Standard Bank resulted in finance charges which were offset by interest on cash AGSA did not spend, and that money was not borrowed by other institutions. Bad debts were not written off but provided for in the financial statement. Every effort was made to receive payment of audit fees. After deliberation, it was decided that a further meeting was required with multi-party quorum representation for SCoAG adoption of the reflective Draft Report.
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