Annual Report - Department of Foreign Affairs

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AFRICAN RENAISSANCE ANNUAL PERFORMANCE ASSESSMENT Statement of ACCOUNTING POLICIES and related matters for the ended 31 March 2010 Vote 3 - Annual Report 2009 - 2010 Department of International Relations and Cooperation 7 SUB-PROGRAMMES/ OBJECTIVES To support the promotion of democracy &good governance in identified African countries To support the development of skills and capacity in the identified African countries Provide and support humanitarian assistance and disaster relief in Africa and elsewhere in the world OUTPUTS/ACTIONS Support peace process initiatives in identified countries of the African continent Assist and support in the institutional restructuring and reform of Government in the identified African countries To provide support in developing educational programmes and management training as well as to assist public service reform in Africa Assisted countries that are in need of disaster relief by providing funds as well as human and technical resource OUTPUT PERFORMANCE MEASURES/ SERVICE DELIVERY INDICATORS/KEY PERFORMANCE INDICATORS Provided funding for South Africa’s particpation in the 2010 Sudan general elections . Funding approved for the establishement of the Office of the African Ombudsman Research Centre at the University of KwaZulu –Natal. Implement the Unisa/DFA Goss project in the Sudan Provided funding to support economic revitialisation in Zimbabwe. ACTUAL PERFORMANCE AGAINST TARGET Target/ Measures Actual Achieved Evaluate project proposal Approved R4 million to fund South African Provide funding of R4 million for the South African Sudan general elections participation in the 2010 participation in the 2010 Sudan general elections Provide funds through Approved R3 million for the Office of the Public the establishement of Protector. the Office of the African Ombudsman Research Centre at the University of Kwazulu –Natal Trained Government of South Sudan officials in administration Continue to train Government of South Sudan officials in administration Provide funds through Approved the payment of the ARF to support the R300 million to support Economic Recovery Programme in Zimbabwe. Programme in Zimba- the Economic Recovery bwe. Not Achieved Rebuilding of the Oxbow Military Base Way forward The conceptualisation of the project lies with the Bilateral Desk. The Desk has not submitted the project proposal to the ARF. The Desk will be approached to find out if the project is still feasible. 1. BASIS OF PREPARATION The annual financial statements have been prepared in accordance with the effective Standards of Generally Recognised Accounting Practice (GRAP), including any interpretations and directives issued by the Accounting Standards Board. 1.1 The cash flow statement can only be prepared in accordance with the direct method 1.2 Specific information has been presented separately on the statement of financial position such as: • receivables from non-exchange transactions, including taxes and transfers; • taxes and transfers payable; • trade and other payables from non- exchange transactions must be presented separately on the statement of financial position 1.3 Amount and nature of any restrictions and cash balances is required. 1.4 The following GRAP Standards have been approved but are not yet effective: STANDARD OF GRAP GRAP 18 – Segment Reporting GRAP 21 – Impairment of Non-cash- generating assets GRAP 23 – Revenue from Non-exchange Transactions (Taxes and Transfers) GRAP 24 – Presentation of Budget Information in Financial Statements EFFECTIVE DATE OF STANDARDS Unknown Unknown 1 April 2010 1 April 2010 GRAP 25 – Employee Benefits 1 April 2011 GRAP 26 – Impairment of Cash –generating Assets 1 April 2010 GRAP 103 – Heritage Assets 1 April 2010 GRAP 104 – Financial Instruments 1 April 2011 2. Significant accounting policies 2.1 Going concern The financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that resources will be available to finance future operations and that the realization of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. 2.2 Currency These financial statements are presented in South African Rand since that is the functional currency in which the entity transactions are denominated. 3. Revenue Revenue from state contributions and interest from investments is accounted for on the accrual basis. Interest on loans is brought into account in the year in which it is capitalised or accrued. Interest on loans is calculated bi-annually in arrears on the balance outstanding, and where withdrawals were made during the period, from the date of each withdrawal. In accordance with international practice interest is calculated on the basis of a 360 day year, consisting of 12 months of 30 days each. Interest is not charged on instalments in arrears. 4. Comparative figures The comparative figures shown in these financial statements are limited to the figures shown in the previous year’s audited financial statements and such other comparative figures that the Department may reasonably have available for reporting in terms of the Public Finance Management Act. Where nescessary figures included in prior period financial statement are reclassification to ensure compliance with all the required standard of reporting. 5. Debts written off In terms of the current Act “the Minister may, in consultation with the Minister of Finance and upon recommendation of the Advisory Committee, write off or convert to grants any outstanding debts owed to the previous Economic Co-operation Promotions Loans Fund”. Vote 3 - Annual Report 2009 - 2010 Department of International Relations and Cooperation 8 Promote implementation of bilateral agreements between South Africa and partner countries within areas of development Provided funding for the implementation of bilateral agreements between South Africa and partner countries within areas of development Funding approved for the following bilateral projects: Cuban Medical Brigade in Siera-Leone Evaluate project proposals Provide funds through the ARF for the implementation of the projects Approved R24 million for the funding of a Cuban Medical Brigade in Sierra -Leone. GRAP 18, GRAP 21, GRAP 25, GRAP 26 and GRAP 103 It is unlikely that these standards will have a material effect on the entity due to the nature of the entity. GRAP 23, GRAP24, and GRAP 104 6. Financial Instruments The Fund’s principal financial assets are Cash and Cash Equivalents, Receivables and Long Term Loans granted to other countries. These financial assets are reported at fair value at year end as reduced by provision for impairment. Financial liabilities are classified according to the substance of the agreement or arrangement entered into. The adoption of these standards is not expected to impact the result of the entity, but may result in more disclosure than is currently provided in the annual financial statements. The main financial liabilities of the Fund are amounts due to the Department of International Relations and Cooperation for loans that are awaiting concurrence letters from the Minister of Finance, as well as amounts owed to outside parties in respect of projects approved in terms of the African Renaissance and International Cooperation Fund Act, 2000 (Act No. 51 of 2000).
7. Impairment of assets 9. Related party transactions The carrying amounts of the Fund’s assets are reviewed at each reporting date to determine whether there is any indication of impairment. If there is any indication that an asset may be impaired, its recoverable amount is estimated. In arriving at the recoverable amount management uses its judgment. The impairment loss is recognised in the statement of financial performance as an expense whenever the carrying amount of an asset exceeds its estimated recoverable amount. 8. Rounding Related party is the Department of International Relations and Cooperation that controls the Fund in making financial and operating decisions. Specific information with regards to the department’s transactions is included in the disclosure notes. 10. Subsequent events There have been no significant subsequent events after year end that impacts on the financial statements. Unless otherwise stated all financial figures have been rounded to the nearest one thousand Rand (R’000). Vote 3 - Annual Report 2009 - 2010 Department of International Relations and Cooperation 9 Report of the Auditor-General to Parliament on the Financial Statements of the African Renaissance and International Co-operation Fund for the year ended 31 March 2010 REPORT ON THE FINANCIAL STATEMENTS Introduction I have audited the accompanying financial statements of the African Renaissance and International Co-operation Fund, which comprise the statement of financial position as at 31 March 2010, and the statement of financial performance, statement of changes in net assets and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 12 to 16. Accounting Officer’s responsibility for the financial statements The accounting officer is responsible for the preparation and fair presentation of these financial statements in accordance with the South African Standards of Generally Recognised Accounting Practice (GRAP) and in the manner required by the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA). This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error: selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. of 2004) (PAA) and section 6(1) of the African Renaissance and International Cooperation Fund Act, 2000 (Act No 51 of 2000), my responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with International Standards on Auditing and General Notice 1570 of 2009 issued in Government Gazette 32758 of 27 November 2009. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion Vote 3 - Annual Report 2009 - 2010 Department of International Relations and Cooperation 10 In my opinion, the financial statements present fairly, in all material respects, the financial position of the African Renaissance and International Co-operation Fund for the year ended 31 March 2010, and its financial performance and its cash flows for the year then ended in accordance with South African Standards of Generally Recognised Accounting Practice and in the manner required by the PFMA. Emphasis of matter Auditor-General’s responsibility I draw attention to the matter below. My opinion is not modified in respect of this matter: As required by section 188 of the Constitution of South Africa 1996 (Act No.108 of 1996) and section 4 of the Public Audit Act of South Africa, 2004 (Act No. 25
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Annual Report - Department of Foreign Affairs

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