ACFI 2011/12.indd - Gauteng Provincial Treasury

Report of the Auditor-General : Departmentsfor the year ended 31 March 2012Leave entitlement and capped leave commitment8.Note 25 of the Gauteng departments combined fi nancial statements included leave entitlement and capped leave commitments amountingto R 1 032 722 000 (2010-2011: R1 049 987 000) from the Department of Health. I was unable to confi rm the leave entitlement and cappedleave commitment by alternative means. Consequently, I could not obtain suffi cient appropriate evidence to confi rm completeness, valuation,existence, cut off, classifi cation and rights and obligations of leave entitlement and capped leave commitments.Irregular expenditure9.Note 28 of the Gauteng departments combined fi nancial statements included irregular expenditure of R1 115 884 000 from the Departmentof Health. The department did not have an adequate system of internal controls in place for the identifi cation and recognition of irregularexpenditure. I was unable to obtain suffi cient appropriate evidence by alternative means. Consequently I could not obtain suffi cient appropriateevidence to confi rm completeness of irregular expenditure.Qualified opinion10.In my opinion, except for the effects of the matters described in the Basis for qualifi ed opinion paragraph, the combined fi nancial statementspresent fairly, in all material respects, the combined fi nancial position of the Gauteng Provincial Departments as at 31 March 2012 and theircombined fi nancial performance and combined cash fl ows for the year then ended, in accordance with Departmental Financial ReportingFramework as prescribed by National Treasury and the requirements of the PFMA.Emphasis of matters11.I draw attention to the matters below. My opinion is not further modifi ed in respect of these matters.Restatement of corresponding figures12.As discussed in note 37 to the fi nancial statements, the corresponding fi gures for 31 March 2011 have been restated as a result of adjustmentsmade during the 2011-12 fi nancial year in the fi nancial statements of Gauteng Provincial Departments as at 31 March 2011.Unauthorised, irregular and fruitless and wasteful expenditure13.14.15.As disclosed in note 28 the Gauteng provincial departments incurred irregular expenditure of R4 164 594 000 as reported in the individualdepartments’ annual reports.As disclosed in note 29 the Gauteng provincial departments incurred fruitless and wasteful expenditure of R377 343 000 as reported in theindividual departments’ annual reports.As disclosed in note 10 the Gauteng provincial departments incurred unauthorised expenditure of R1 050 780 00 due to funds expended forpurpose which were not in accordance with the vote and/or main division within the vote.Additional matter16.I draw attention to the matter below. My opinion is not modifi ed in respect of this matter.Financial reporting framework17.The fi nancial reporting framework prescribed by the National Treasury and applied by the Gauteng Provincial Departments is a complianceframework. The wording of my opinion on a compliance framework should refl ect that the fi nancial statements have been prepared inaccordance with this framework and not that they “present fairly”. Section 20(2)(a) of the PAA however, requires me to express an opinion onthe fair presentation of the fi nancial statements. The wording of my opinion therefore refl ects this requirementREPORTING ON OTHER LEGAL AND REGULATORY REQUIREMENTS18. In accordance with the PAA and the General Notice issued in terms thereof, I report the following fi ndings relevant to compliance with lawsand regulations and internal control, but not for the purpose of expressing an opinion.20 Gauteng Provincial Government | Combined Financial Information Annual Report 2011/12