Department of Defence Annual Report 2008-2009

| Department of Defence | Vote 19 |
REPORT OF THE ACCOUNTING OFFICER
for the year ended 31 March 2009 (continued)
10. New and proposed activities
New and proposed activities are described in the Annual Report.
11. Asset Management
11.1 General
11.1.1 DOD uses the Financial Management System (FMS) as their nancial accounting system. The
DOD also uses different logistical systems such as OSIS, CALMIS and LIMS. These systems
are not integrated and are all cash based systems, which do not support any accrual principles.
11.1.2 The nancial and logistical functions are performed throughout the country at more than a
1 000 Force Structure Elements (FSE). As a result of this as well as the absence of a properly
integrated accrual based system, lack of internal controls, capacity, accounting and auditing
skills, the DOD has received a qualied audit opinion for the past three nancial years.
| Financial Performance |
11.1.3 In order for the various logistic systems to be able to provide the information required, not
only does the system need to be enhanced but the information captured also needs to be
accurate. To address this shortcoming, amongst other issues identied by Auditor-General, the
DOD embarked on a Logistics Intervention and Repositioning Programme (LIPR) to facilitate
immediate rectications and to plan and manage future realignments. The LIPR consists
of four clusters with different workgroups under each cluster (10 Workgroups). Although
enormous progress has been made, which will be discussed in detail hereunder, the system still
remains unable to provide the extent of information required by National Treasury.
11.2 Progress with regard to capturing assets in the register
11.2.1 Immovable Asset Register. The CSIR has been contracted to assist the DOD in the
development and implementation of a strategic immovable asset management plan and
an immovable asset register. The plan is based on the NT IDIP (Infrastructure Delivery
Improvement Programme) model to develop a system of valuation and maintenance of
immovable assets in the DOD. The DOD LIPR Facilities Workgroup nialised the Strategic
Immovable Asset Management Plan by 31 March 2008.
11.2.2 Supply Chain Management
11.2.2.1 In addition, the CSIR is also assisting the DOD with the development of a sound Supply
Chain Management strategy. As a result of this a Supply Chain Management Workgroup has
also been established within the Logistic Intervention and Realignment Programme (LIRP) to
dene the broad logistic concept in view of the Defence Strategy and Military Strategy.
11.2.2.2 Focus of the exercise is to develop a Supply Chain Management framework/environment that
will enhance/promote accountability and effective internal control environment.
11.2.3 DOD Asset/Inventory Verication Programme. Classic 1 Consortium (CIC), was
appointed to engage in this programme in order to provide competent support in the clean-up
of the DOD item identication, codication, cataloguing, stock and asset register.
Annual Report FY 2008 - 2009 224