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)
11.2.3.1 The aim of this programme is to improve the integrity of priority DOD item identification,
codification; cataloguing, stock holding, as well as the related asset register record, to an
acceptable initial quality level and is intended to achieve the following objectives:
Improve Item Identification (II), Codification and Cataloguing accuracy.
Reduce duplication of NSNs.
Improve asset register accuracy.
Enable transition to National Codification Bureau (NCB) Tier 2 capability.
Rationalisation of inventory.
Improved visibility of assets and inventory.
Improved asset and inventory tracking.
Continue integrity and continuous further improvement.
11.2.3.2 This Stock Verification programme consists of two phases of which phase one commenced
during October 2008, and was completed on 28 February 2009. Phase one consists of accurate
measuring and location of existing error rates, and skills gap analysis. The final report on the
result of phase one was received on 27 February 2009.
Phase two of the Stock Verification programme will consist of, amongst other activities:
Clean up the data in terms of Cat and Cod – NSNs, OEM certificates SCOA v NATO; Stock
identification and verification, clean up asset register integrity levels.
11.2.4 Indication of the Extent of Compliance with Minimum Requirements
| Financial Performance |
11.2.4.1 The monitoring of stock take actions within the Department is done on a regular basis to ensure
that management interventions and good progress takes place. Assets as well as inventory in
the DOD is categorised according to NATO and recorded in the same register. Reporting on
assets and inventory is required according to National Treasury’s Standard Chart of Accounts
(SCOA). With expenditure on inventories being recognised in the DOD financial system in
terms of SCOA, the DOD logistic accounting system was unable to give information required
in the annual financial statements.
11.2.4.2 Due to the difference between NATO classifications and SCOA reporting format, the DOD
will only be able to provide complete logistical reporting after IFMS is fully implemented.
11.2.4.3 A successful attempt was made to couple the SCOA and NATO item codes to be able to
differentiate between Tangible Movable Capital major and minor assets as well as inventory. The
accuracy with regards to reconciliation of payments on the financial system to the information
in the asset register can only be confirmed by the end of May 2009.
11.2.4.4 The way forward with regards to the immediate future includes the investigation of the
possibility and cost involved to enhance the current logistic accounting systems to keep
record of purchase information for capital equipment. Depending on the outcome of the
225 Annual Report FY 2008 - 2009