annrep 1011 1 to 148.qxp - Department of Defence

More documents

Recommendations

Info

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 20118.3.2.3 DACAF Mandate. To provide anti-corruption and anti-fraud services, including serving as a nodal point for forensicauditing, to the department, provided that evidence of corruption and fraud shall be handed over to the MilitaryPolice Division for further investigation in terms of and in accordance with applicable law.8.3.2.4 The Corruption and Fraud Prevention Plan (version 2) was reviewed and is effective from 1 April 2011. The PreventionPlan is distributed to Service and Divisional Chiefs and also being communicated by means of road-shows in aneffort to reach all members of the DOD on all levels.8.3.3 Internal Audit8.3.3.1 Internal Audit is an independent process conducted to evaluate internal controls implemented by management toensure that resources have been acquired economically, utilised efficiently and effectively, and to report this to managementand its legislative body. It is acknowledged that during the year under review, the Internal Audit Unit did notoperate under the leadership of the Head of Internal Audit as the post was vacant, thus all its activities were carriedout under the leadership of the Inspector General DOD. It is anticipated that the unit's head will be appointed duringthe financial year 2011/12 as the recruitment process has reached an advanced stage. It is anticipated that once theinternal audit function is fully functional in the coming years, it will provide management with the assurance aboutthe processes in place to ensure accurate reporting in-year and the adequacy of these before the external audit is conductedwhich should reduce the number of findings and misstatements in the interim and final financial and performancereports.8.3.3.2 During the period under review, 87 audits were conducted and the following components were addressed:Performance Measurement. Annual and quarterly reports were audited and inconsistencies in the reportingof targets were identified and reported to the appropriate management. However, there has been a remarkableimprovement on the accuracy of performance information reported in the quarterly and annual reports.Combat Readiness. Although no combat readiness audits were conducted in the period under review, the outcomeof the audits conducted in the previous financial year proved to be valuable. Chronic and critical shortcomingsin the resources, budget constraints and loss of technically qualified and/or skilled personnel reportedin the previous financial year, led to the improvement of combat readiness of forces reporting to the mobilisationcentres.Mobilisation and Foreign Deployment. Based on the audit findings and recommendations of the mobilisationand foreign deployment audits conducted, the Joint Operations Division is developing a mission readinesstraining curriculum.Risk based audits. 50 risk based audits were conducted. Internal auditors recommended to management asystem of internal controls to prevent, detect and correct deviations that may occur in the operational procedures. Follow-up audits. Follow-up audits were conducted mainly on two risks (Procurement System andCodification System) and the internal auditors recommended control measures to mitigate the risks.8.3.4 Audit Committee8.3.4.1 The Audit Committee provided guidance to the Defence Inspectorate Division during the period under review. TheAudit Plan and Auditor General's audit report revealed that the financial statements were not adequately addressed,which was ascribed to the lack of expertise of the internal auditors. The external members of the Audit Committeemade their services available to assist the DOD to address the lack of expertise. The Audit Committee was partly satisfiedwith the content and quality of quarterly reports prepared by the IG DOD during the period under review.164ANNUAL REPORT FY 2010/2011
D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 20118.3.4.2 The Defence Inspectorate Division provided the secretarial services for the Audit Committee. The following informationregarding the Audit Committee is relevant:Composition. During the year under review, the Audit Committee for the Department of Defence (DOD AC)was duly constituted according to the Public Finance Management Act (PFMA). The external members to theDOD were as follows with their appointment dates indicated in brackets: Dr D. Konar (Chairperson) (30 May2008); Mr K.A. Ross (26 May 2008) and Ms J. Kumbirai (December 2007). Mr Ross passed away on 21January 2011. Ms Kumbirai's contract expired in December 2010 and indicated that she is not available toserve another term as a member of the DOD AC. Mr Radebe and Mr Mudaly were appointed by the Ministerof Defence and Military Veterans in January 2009, but are not active members due to security clearances. MrMudaly indicated that he was no longer available to serve as a DOD audit committee member. Mr Radebeapplied for a security clearance which was submitted for evaluation. Dr T. Gamede (Chief Defence Policy,Strategy and Planning) was appointed as an internal member to the DOD AC on 31 March 2009.Responsibilities. The Audit Committee complied with its responsibilities arising from Section 38 (1)(a) of thePFMA and Treasury Regulation 3.1.3. Three scheduled and two special meetings were held. Two Special Incommittee-meetingswere held with the Auditor-General. Activities of the Audit Committee were formalisedinto a plan, allowing the coverage of the total spectrum of risk areas that need to be assessed and monitored,in accordance with the Public Finance Management Act and National Treasury Regulations. The Terms ofReference, which guide the activities of the Department of Defence's Audit Committee, were reviewed in May2010 and was approved by the Accounting Officer. The Terms of Reference were distributed for review inJanuary 2011. The external and internal members, Ex-Officio Officers, the Auditor-General, Chief AuditExecutive and the Accounting Officer, formally assessed the DOD Audit Committee.Activities. The Audit Committee members had direct access to the Auditor-General, the Secretary for Defenceand the Chief of the South African National Defence Force.8.3.5 Consolidated Control System8.3.5.1 The Consolidated Control System, specifically the financial misconduct module, was signed off at the end of the previousreporting period and activated through DODI 01/10 dated 22 February 2010. The aim of the system is to:register all non-compliant events as it occurs in the DOD;finalise it in accordance with legislation, prescripts and DOD policies;generate reports to substantiate the Annual Financial Statements;provide managers at all levels in the DOD access to management information regarding non-compliance andmisconduct;provide guidance regarding which policies/governance in the DOD requires to be addressed; andperform trend analysis to identify, confirm and evaluate risks.8.3.5.2 During the financial year 2010/2011 officials at level 1 and 2 of the DOD were trained to manage incidents and aprocess is underway to commence with training of officials at levels 3 and 4 in the financial year 2011/2012. The aimis to further develop processes that prevent and therefore, in the medium term, eliminate the occurrence of incidentsof financial misconduct in the department.8.3.6 Budgeting and Financial ManagementThe DOD budget is developed in accordance with Government's guidelines and priorities, is aligned with departmentalstrategies and plans, tabled in Parliament and enacted through the annual Appropriation Act. The ExecutiveAuthority, Accounting Officer and budget authorities monitor budget execution on a monthly basis in accordance withANNUAL REPORT FY 2010/2011 165
Page 2 and 3:
D E P A R T M E N T O F D E F E N C
Page 4 and 5:
Page 6 and 7:
Page 8 and 9:
Page 10 and 11:
Page 12 and 13:
Page 15 and 16:
Chapter 1D E P A R T M E N T O F D
Page 17 and 18:
Page 19 and 20:
Page 21 and 22:
Page 23 and 24:
Page 25 and 26:
Page 27 and 28:
Page 29 and 30:
Page 31 and 32:
Page 33 and 34:
Page 35 and 36:
Page 37 and 38:
Page 39 and 40:
Page 41 and 42:
Page 43 and 44:
Page 45 and 46:
Page 47 and 48:
Page 49 and 50:
Page 51 and 52:
Page 53 and 54:
Page 55 and 56:
Page 57 and 58:
Page 59 and 60:
Page 61 and 62:
Page 63 and 64:
Page 65 and 66:
Page 67 and 68:
Page 69 and 70:
Page 71 and 72:
Page 73 and 74:
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Page 83 and 84:
Page 85 and 86:
Page 87 and 88:
Page 89 and 90:
Page 91 and 92:
Page 93 and 94:
Page 95 and 96:
Page 97 and 98:
Page 99 and 100:
Page 101 and 102:
Page 103 and 104:
Page 105 and 106:
Page 107 and 108:
Page 109 and 110:
Page 111 and 112:
Page 113 and 114:
Page 115 and 116:
Page 117 and 118:
Page 119 and 120:
Page 121 and 122:
Page 123 and 124:
Page 125 and 126:
Page 127 and 128:
Page 129 and 130: D E P A R T M E N T O F D E F E N C
Page 179: D E P A R T M E N T O F D E F E N C
Page 231 and 232:
Page 233 and 234:
Page 235 and 236:
Page 237 and 238:
Page 239 and 240:
Page 241 and 242:
Page 243 and 244:
Page 245 and 246:
Page 247 and 248:
Page 249 and 250:
Page 251 and 252:
Page 253 and 254:
Page 255 and 256:
Page 257 and 258:
Page 259 and 260:
Page 261 and 262:
Page 263 and 264:
Page 265 and 266:
Page 267 and 268:
Page 269 and 270:
Page 271 and 272:
Page 273 and 274:
Page 275 and 276:
Page 277 and 278:
Page 279 and 280:
Page 281 and 282:
Page 283 and 284:
Page 285 and 286:
Page 287 and 288:
Page 289 and 290:
Page 291 and 292:
Page 293 and 294:
Page 295 and 296:
Page 297 and 298:
Page 299 and 300:
Page 301 and 302:
Page 303 and 304:
Page 305 and 306:
Page 307 and 308:
Page 309 and 310:
Page 311 and 312:
Page 313 and 314:
Page 315 and 316:
Page 317 and 318:
Page 319:
show all

annrep 1011 1 to 148.qxp - Department of Defence

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?