annrep 1011 1 to 148.qxp - Department of Defence

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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 AUDITOR-GENERAL TO PARLIAMENTON VOTE NO. 21: DEPARTMENT OF DEFENCEAND MILITARY VETERANSreporting in a timely manner which is accessible and available and to ensure that the transactions are complete and accuratelyrecorded without delay as required by the National Treasury.The assets are currently managed on various logistical subsystems. These systems are not integrated nor are they integrated withthe financial system or reconciled. Inventory and capital assets are also not separated on these subsystems. Due to a moratoriumon the acquisition of a new assets system the above shortcomings could not be addressed. Records of some units/depots are stillmanual and are not integrated for reporting purposes.Adequate controls were not implemented over daily and monthly processing and recording of transactions to ensure the accuracy,and completeness of the information reported.Adequate processes were not in place to ensure complete and timely reporting to relevant authorities as required by laws and regulations.G o v e r n a n c eThe department is still in the process of capacitating the internal audit component.O T H E R R E P O R T SP e r f o r m a n c e a u d i t sA performance audit was conducted during the year under review on the department's use of consultants, contractors and agencies/outsourcedservices. The management report was issued in February 2011.Pretoria30 July 2011182ANNUAL 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 21Chapter 2ACCOUNTING POLICIESfor the year ended 31 March 2011The Financial Statements have been prepared in accordance with the following policies, which have been applied consistently inall material aspects, unless otherwise indicated. However, where appropriate and meaningful, additional information has beendisclosed to enhance the usefulness of the Financial Statements and to comply with the statutory requirements of the PublicFinance Management Act, Act 1 of 1999 (as amended by Act 29 of 1999), and the Treasury Regulations issued in terms of theAct.1. Presentation of the Financial Statements1.1 Basis of preparationThe Financial Statements have been prepared on a modified cash basis of accounting, except where stated otherwise.The modified cash basis constitutes the cash basis of accounting supplemented with additional disclosure items.Under the cash basis of accounting transactions and other events are recognised when cash is received or paid.1.2 Presentation currencyAll amounts have been presented in the currency of the South African Rand (R) which is also the functionalcurrency of the department.1.3 RoundingUnless otherwise stated all financial figures have been rounded to the nearest one thousand Rand (R'000).1.4 Comparative figuresPrior period comparative information has been presented in the current year's financial statements. Where necessaryfigures included in the prior period financial statements have been reclassified to ensure that the format in which theinformation is presented is consistent with the format of the current year's financial statements.1.5 Comparative figures - Appropriation Statement2. RevenueA comparison between actual amounts and final appropriation per major classification of expenditure is included inthe Appropriation Statement.2.1 Appropriated fundsAppropriated funds comprises of departmental allocations as well as direct charges against revenue fund (i.e.statutory appropriation).Appropriated funds are recognised in the financial records on the date the appropriation becomes effective.Adjustments made in terms of the adjustments budget process are recognised in the financial records on the date theadjustments become effective.Unexpended appropriated funds are surrendered to the National Revenue Fund. Any amounts owing to the NationalRevenue Fund at the end of the financial year are recognised as payable in the statement of financial position.Any amount due from the National Revenue Fund at the end of the financial year is recognised as a receivable in thestatement of financial position.ANNUAL REPORT FY 2010/2011 183
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