ATC100824: Report on Auditor-General on the 2008/09 financial statements of the Boxing South Africa

Public Accounts (SCOPA)

Seventh Report of the Standing Committee on Public Accounts on the Report of the Auditor-General on the 2008/09 financial statements of the Boxing South Africa, dated 24 August 2010

 

The Standing Committee on Public Accounts (the Committee) heard evidence on and considered the contents of the Annual Report and the Report of the Auditor-General on the 2008/09 financial statements of Boxing South Africa (BSA). The Committee noted the qualified audit opinion, highlighted areas which required urgent attention of the Accounting Authority, and reports as follows:

 

1.        Operating Expenditure

 

The Auditor-General reported the following:

a)        BSA could not provide sufficient and appropriate audit evidence for operating         expenditure amounting to R346 239.000;

b)       Information that was considered necessary for determining the accuracy, completeness and occurrence of operating expenditure was not obtained; and

c)       The entity’s records did not permit the application of alternative audit procedures.

 

The Committee recommends that the Accounting Authority ensures that:

a)       Measures are in place to ensure that supporting documents are safeguarded and properly filed after they are processed for reference for audit purposes;

b)       Requisition for payments are verified and approved before payments are made; and

c)       Disciplinary action is taken against officials who fail to comply with the measures to safeguard records in accordance with PFMA

 

2.       Going Concern

 

The Auditor-General identified that:

            BSA incurred a net loss of R4 327 497 during the year ended 31 March 2009 and total liabilities exceeded its total assets by R5 951 045.

 

The Committee recommends that the Accounting Authority ensures that:

Risks relating to the status of BSA as a going concern are be identified,  analysed, and addressed as a matter of urgency.

 

 

3.       Fruitless and wasteful expenditure

 

The Auditor-General identified the following:

        Fruitless and wasteful expenditure to the amount of R1 313 226 was incurred as the entity failed to comply with its internal policies and procedures regarding dismissals and did not pay its value-added tax and pay-as-you-earn on time which resulted in interest and penalties being incurred.

 

The Committee recommends that the Accounting Officer ensures that:

Competent individuals are appointed to ensure proper financial reporting and adherence to policies and procedures.

 

4.       Non-Compliance with applicable laws and regulations

 

The Auditor-General reported the following:

       a)   Quarterly reports to the executive authority were not submitted within 30 days of the end of each quarter as required by Section 26.1 of the Treasury Regulations.

b)   Evidence that the budget and the strategic plan were submitted to the executive authority as required by Section 53(1) of the Public Finance Management Act and Section 30.1.1 of the Treasury Regulations, could not be provided for audit purposes.

c) BSA has budgeted for a deficit without obtaining prior written approval from National Treasury as required by Section 53(3) of the PFMA.

 

The Committee recommends that the Accounting Officer ensures that:

(a)      Proper steps are taken to ensure that Boxing South Africa complies with applicable regulations;

(b)      An action is developed, implemented  and monitored to address these audit findings; and

(c)      Quarterly reports are submitted to relevant authorities on time.

 

 

 

 

 

 

 

5.       Conclusion

 

The Department of Sport and Recreation should urgently address the institutional capacity and funding constraints of BSA to ensure its organizational viability. Arising from the hearing, the Committee believes that BSA should ensure the appointment of competent staff in order to execute its mandate successfully.

 

The Committee further recommends that the Accounting Officer should submit a progress report on the implementation of all the above recommendations to the National Assembly within 60 days after the adoption of this report by the House.

 

 

Report to be considered