ATC100825: Report on Auditor-General on the 2008/09 Financial Statements of The Presidency

Public Accounts (SCOPA)

Ninth Report of the Standing Committee on Public Accounts on the Report of the Auditor-General on the 2008/09 Financial Statements of The Presidency, dated 25 August 2010:

 

1.   Introduction

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 the  Presidency. The Committee noted the qualified audit opinion, highlighted areas which required the urgent attention of the Accounting Officer, and reports as follows:

 

2.   Capital Assets

 

The Auditor-General reported the following:

a)      “Insufficient appropriate audit evidence as to the current year adjustments to prior year balances with a combined net amount of R9,463 million for computer equipment, furniture, office equipment and other machinery.

b)      Due to inadequate document administration, the department’s prior year records did not permit the application of alternative procedures.

c)      The completeness of the asset register due to the identification of assets not been recorded on the asset register and the absence of documentation neither support the disposal of assets nor verify the completeness of major and minor assets”.

The Committee recommends that the Accounting Officer ensures that:

a)      Regular asset counts and reconciliations are performed to maintain the integrity of the asset register and figures disclosed in the financial statements;

b)      All discrepancies identified are investigated and corrected;

 

c)      Identified assets are properly recorded on the asset register;

 

d)      Effective internal control mechanisms are implemented to properly monitor critical information and asset verification process for the completeness of the asset register.

 

3.   Irregular Expenditure

 

The Auditor General reported the following:

a)      “The Presidency continued to transfer funds amounting to R24, 520 million to the National Youth Commission (NYC) without having obtaining written assurance from the entity as required by Section 38(1) (j) of the PFMA.

b)      The Presidency had referred the matter to National Treasury for condonation and Treasury was of the opinion that this matter was not irregular but rather was an instance of non-compliance with the PFMA”.

The Committee recommends that the Accounting Officer ensures that:

a)      Disciplinary action is taken against officials who were responsible for the transfer of funds without assurance in order to avoid such occurrences in the future; and

b)      Monitoring controls are put in place to make certain that funds are transferred to entities by compliance with legislative requirements.

 

4.   Unauthorised Expenditure

 

The Auditor General reported that “an unauthorised expenditure to the value of R14,511 million occurred”.

The Committee recommends that the Accounting Officer ensures that a follow-up is made with National Treasury regarding the progress on the motivation for unauthorised expenditure as was submitted in September 2009 so that Parliament could take a decision with respect to it.

 

5.       Conclusion

The Committee notes that the National Youth Commission (NYC) has not submitted its 2008/09 annual reports to Parliament. At the hearing, the Minister in the Presidency for the Performance Monitoring and Evaluation promised to investigate this and report back to the Committee. The Committee is awaiting feedback on this matter, and would like to see those responsible held accountable.

The Committee further requests the Executive Authority to submit a progress report on all the recommendations to the National Assembly within 60 days after the adoption of this report by the House.

 

Report to be considered.