3. PPECB Annual Report 2009-2010

materiality frameworkThe framework of acceptable levels of materiality and significance applied during 2009/10, for the purpose of interpretationof, and compliance with, the PFMA (as amended) is the following:PFMA Section Quantitative (Amount) Qualitative (Nature)(1)(c)Section 50 / Fiduciary duties of accounting authoritiesThe accounting authority for a public entity must -on request, disclose to the executive authority responsiblefor that public entity or the legislature to which the publicentity or the legislature to which the public entity isaccountable, all material facts, including those reasonablydiscoverable, which in any way may influence the decisionsor actions of the executive authority or that legislature.Any fact discovered of whichthe amount exceeds themateriality figure of R625 000after consultation with the AuditCommittee for the year underreview.- Any item or event of whichspecific disclosure is requiredby legislation, King III Reportor GRAP.- Any fact discovered of whichits omission or misstatement,in the Board's opinion, couldinfluence the decisions oractions of the executiveauthority or legislature.(2)(b)(c)(d)Section 54 / Information to be submitted by accountingauthoritiesBefore a public entity concludes any of the followingtransactions, the accounting authority for the public entitymust promptly and in writing inform the relevant treasuryof the transaction and submit relevant particulars of thetransaction to its executive authority for approval of thetransaction:- participation in a significant partnership, trust,unincorporated joint venture or similar arrangement.- acquisition or disposal of a significant shareholding ina company.- acquisition or disposal of a significant asset.- commencement or cessation of a significant businessactivity.Acquisition or disposal of asignificant asset;- Acquisition: Market valuegreater than Materiality figure- Disposal: Market value greaterthan 50% of Materialityfigure.- Any participation outside ofthe approved strategic planand budget.- Any acquisition or disposal ofany asset that would increaseor decrease the overalloperational functions of theBoard, outside of the approvedstrategic plan and budget.- Disposal of the major part ofthe assets of the Board.- Any business activity thatwould increase or decrease theoverall operational functionsof the Board, outside of theapproved strategic plan andbudget.(2)(a)(b)(i)(ii)(iii)(iv)(v)Section 55 / Annual Report and financial statementsThe annual report and financial statements referred toin subsection (1)(d) must-- fairly present the state of affairs of the public entity, itsbusiness, its financial results, its performance againstpredetermined objectives and its financial position asat the end of the financial year concerned.- include particulars of-- any material losses through criminal conduct and anyirregular expenditure and fruitless and wastefulexpenditure that occurred during the Financial Year.- any criminal or disciplinary steps taken as aconsequence of such losses or irregular expenditureor fruitless and wasteful expenditure.- any losses recovered or written off.- any financial assistance received from the state andcommitments made by the state on its behalf.- any other matters that may be prescribed.- Losses through criminalconduct.- any loss identified.- Losses through anyexpenditure.- if the combined totalexceeds the planningmateriality figure afterconsultation with the AuditCommittee for the yearunder review.- Any irregular, fruitless andwasteful expenditure asdefined by the PFMA will bereported.Any identified loss throughcriminal, reckless or negligentconduct.Section 66 (1) / Restrictions on borrowing, guaranteesand other commitmentsRnilThis Public entity may notborrow money, nor issue aguarantee, indemnity orsecurity, nor enter into any othertransaction that binds or maybind the institution to any futurefinancial commitment unlessacting through the relevantExecutive Authority. (PFMAsection 66(3)(c)).PPECB | annual report | 2009 - 2010 61