2007 / 2008 Annual Report - Eastern Cape Development Corporation

EASTERN CAPE DEVELOPMENT CORPORATION 2007/08REPORT OF THEAUDITOR GENERALEmphasis of matterWithout qualifying my audit opinion, I draw attention to the following matter:Highlighting a critically important matter presented or disclosed in the financial statementsInvestment property9 Freehold title is held for the majority of investment properties disclosed in note 2 to the financial statements. However,properties with a combined value of R96.4 million are disclosed as being owned by government, tribal authorities andmunicipalities.Although the corporation’s right to occupy properties to the value of R83.3 million, out of the R96.4 million referredto above, has not been reduced to writing, it derives economic benefits from their use and carries the risks that areincidental to ownership.The valuation method used to value these properties assumes that the corporation has the right to occupy theseproperties and will receive economic benefits in perpetuity.OTHER MATTERSWithout qualifying my audit opinion, I draw attention to the following matters that relate to my responsibilities in theaudit of the financial statements:Matters of governance10 The PFMA tasks the accounting authority with a number of responsibilities concerning financial and risk managementand internal control. Fundamental to achieving this is the implementation of certain key governance responsibilities,which I have assessed as follows:Matter of governance Yes NoAudit committee• The public entity had an audit committee in operation throughout the financial year.• The audit committee operates in accordance with approved, written terms of reference.• The audit committee substantially fulfilled its responsibilities for the year, as set out in section 77 of the PFMAand Treasury Regulation 27.1.8.Internal audit• The public entity had an internal audit function in operation throughout the financial year.• The internal audit function operates in terms of an approved internal audit plan.• The internal audit function substantially fulfilled its responsibilities for the year, as set out in Treasury Regulation27.2.Other matters of governanceThe annual financial statements were submitted for audit as per the legislated deadlines section 55 of the PFMA forpublic entitiesThe financial statements submitted for audit were not subject to any material amendments resulting from theaudit.No significant difficulties were experienced during the audit concerning delays or the unavailability of expectedinformation and/or the unavailability of senior management.The prior year's external audit recommendations have been substantially implemented.√√√√√√√√√√60