56-57-audit committe

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• Publié par: Omko
• Nombre de lectures: 22
• Langue: English

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Report of the
audit committee
We are pleased to present our report for the financial THE EFFECTIVENESS OF INTERNAL CONTROL
year ended 31 March 2005. We have reviewed various reports made by the
internal auditors, the qualified audit report on the
AUDIT COMMITTEE MEMBERS AND Annual Financial Statements including matters of
ATTENDANCE emphasis contained therein, and the management
letter of the Auditor-General. In terms of these The Audit Committee met during the financial year on
reports there has been significant or material non-5 occasions in terms of the charter. Meetings were
compliance with prescribed policies, procedures held on the following dates 1 March 2004, 1 June 2004,
and internal controls including:27 August 2004, 29 November 2004, and 1 March
2005. 1. The Capstone 518 (Pty) Ltd matter as reported in
the Auditor-General’s report 3.4.1 and 5.2.Members and their attendance at meetings during
the year were as follows: 2. Lack of basic and fundamental compliances
to policies of procedures in particular bank Members Meetings attended
reconciliations, interdepartmental accounts, leave
Malcolm Brown (Chairperson) 5 processing, creditors etc. not being performed.
Mamoorosi Qacha (Deputy Chairperson) 5
3. Fruitless and wasteful expenditure as highlighted
Zola Fihlani 5 in the Auditor-General’s report 3.3.1
Dr. Laetitia Rispel 4
4. A business Continuity Plan including a Disaster
Mike Roussos 2
Recovery Plan that has not been finalised and
Jack van der Merwe 2 implemented which constitutes huge risk for the
Mogopodi Mokoena 3 provincial government.
A risk assessment has been performed during the
AUDIT COMMITTEE RESPONSIBILITY financial year under review which formed the basis
for a comprehensive Internal Audit plan. The Audit Committee reports that it has complied
with its responsibilities arising from section 38(1) (a) The Audit Committee is satisfied with the content
of the PFMA and Treasury Regulations 3.1.13. The and quality of quarterly reports prepared and issued
Audit Committee also reports that is has adopted by the Accounting Officer and the Internal Audit
appropriate formal terms of reference as its audit Department during the year under review.
committee charter, has regulated its affairs in
compliance with its charter and has discharged all
its responsibilities as contained therein.
56ACHIEVEMENT AND EXECUTION OF MANDATE EVALUATION OF ANNUAL FINANCIAL
GIVEN TO THE DEPARTMENT STATEMENTS
The Audit Committee would like to raise concern ● The Audit Committee that served during the year
over the ability of the department to achieve their under review was replaced by normal rotation
mandate based on the following: processes subsequent to the financial year end.
The former members of the Audit Committee
1. Lack of appointment of a permanent Chief
independently approved of the issue of this
Executive Office
report based on their independent receipt and
2. Dr op in performance efficiencies in areas such review of the Annual Financial Statements and
as: the Audit Report thereto for inclusion in the
Annual Report. a. Document Management Centre
● The Audit Committee independently accepts the
b. Call Centre conclusions of the Auditor-General on the Annual
Financial Statements and is of the opinion that c. IT Division in respect of finalising Disaster
the Annual Financial Statements be accepted Recovery Plan and Business Continuity plan
and read together with the report of the Auditor-
3. Lacking and inefficient IT Control Systems
General.
4. Capacity constraints as stated in the Accounting

Officers Report.

These being the main areas of focus of the department
and some of which have been raised in the Auditor
General’s report, the committee feel the department
is constrained in effectively carrying out their duties.
Management have provided assurance that since
the implementation of the new management team, Chairperson of the Audit Committee
several steps have been implement that should
22 August 2005reduce the risks referred to above.
57Annual financial
statements
MANAGEMENT REPORT AND APPROVAL The current year expenditure was less than the budget by
R5 million mainly due to:
Report by the Accounting Officer to the Executive Authority
and Gauteng Provincial Legislature of the Republic of ● The delay in finalisation of projects mentioned under
South Africa. Capital expenditure.
Capital expenditure was under spent by R30 million mainly
1. NATURE OF THE BUSINESS due to the delay in the finalisation of the Disaster recovery
project and implementation of E-learning.
The Gauteng Shared Service Centre’s (GSSC) core business
is the provisioning of Gauteng Provincial Government
Internal audit services
support functions, which are Internal Audit, Human
Resources, Procurement, Finance and Technology Support During the year Internal Audit services implemented
Services. The GSSC’s focus is on providing customer the roll-out of Control Self Assessment to the GPG
satisfaction using the benefits of centralisation – such as Departments. The positive response received in terms
economies of scale, standardisation and the provision of a of the process enabled departments to achieve a more
single technological base for improved service delivery. efficient, effective and value added enterprise wide risk
management and assessment analysis. Further, the unit
successfully implemented the Special Resolutions Unit
2. GENERAL REVIEW OF FINANCIAL MATTERS
(SRU). This unit has been tasked with administering the
R’000 R’000 R’000 GPG fraud hotline and creating awareness of fraudulent
Actual Budget Actual activities and control processes across government. The
2005 2005 2004 SRU is also the implementing agent for the Provincial Anti
Corruption strategy.
Current expenditure 448 438 453 254 423 457
In addition, Internal Audit services enabled 15 learners on Capital expenditure 25 995 55 927 49 033
the Training Outside Public Practice (TOPP) programme
Total expenditure 474 433 509 181 472 490 to complete their first year on the 3 year learnership. The
programme directed at generating prospective chartered
The total current expenditure increased by R25 million
accountants specialising in government was piloted on
from that of the prior year, mainly due to the following:
behalf of GPG in February 2004.
● The Department is in the process of completing the
personnel structure and filled most of the vacancies Human resources services
in this e which resulted in increase in
One of the major projects undertaken, though not yet compensation as people are employed to fill the
completed, is the establishment and roll out of e-HR vacant positions.
services. Among others, these are E-Learning, E-recruitment,
● As more and more functions from GPG departments
Teleforms and IR Assist.
migrated, it resulted in operating costs increasing
proportionally.
58Procurement services● E-learning
The business case has been approved. A Tender has Procurement implemented a new organizational structure
been published, responses received, DAC approval which is in line with their operating model. The aim of the
been obtained and a service provider has been new structure is to align the Procurement BU to offer a more
appointed. The recruitment of E-Learning specialist effective and efficient delivery service to all its clients.
has also commenced. Implementation is scheduled or
has been moved to July 2005. Financial services
● E-recruitment ● T he GSSC were once again successful in issuing IRP5’s
Preparations on providing e-recruitment services have to the GPG within agreed Service Level Agreement (SLA)
been completed. Staff have been trained, the system times as well as the submission of the reconciliation
has been tested and is working fine. The date of roll- to SARS within agreed time frames. The Payroll
out will be/ is linked to the official launch of the GPG Deductions and Taxation team was also able to assist
Portal. employees from various departments in completing tax
returns successfully and claim appropriate allowances
● Teleforms
afforded to them by the tax regulations.
The teleforms project – the automation of leave
● The continued onslaught on the debt collection of management – has been successfully piloted and ready
ex-employee debt has resulted in the SLA target of for roll-out. An assessment report is being compiled
25% being exceeded although the reduction comprised and preparations for further roll out are underway.
both write-offs and cash collected after applying Though there were a number of challenges, it has been
proper debt collection and administration procedures.established that these can be addressed and avoided
● The drive to improve internal controls surrounding all in future. Particularly the interface challenges with
financial transactions, especially in relation to mandates National Treasury. The teleforms have reduce leave
that originate from department entities, continued and administration’s turn around time from 5 days to 1.8
the quality of mandates – from a control point of view days.
– has improved. There is, however, a long way to go in
● IR Asisst this respect and this will continue to be emphasised in
The system is