ACFI 2011/12.indd - Gauteng Provincial Treasury

Report of the Auditor-General : Departmentsfor the year ended 31 March 2012Compliance with laws and regulations19.I performed procedures to obtain evidence that the entity has complied with applicable laws and regulations regarding fi nancial matters,fi nancial management and other related matters. My fi ndings on material non-compliance with specifi c matters in key applicable laws andregulations as set out in the General Notice issued in terms of the PAA are as follows:Annual financial statements20.21.The combined fi nancial statements submitted for auditing were prepared in accordance the Departmental Financial Reporting Frameworkprescribed by National Treasury, however material misstatements were identifi ed by the auditors in the submitted combined fi nancialstatements which is in the conversation of section 40(1)(a) of the PFMA. Some of the material misstatements were corrected and theuncorrected material misstatements resulted in the fi nancial statements receiving qualifi ed audit opinion.Section 19(1)(a) of the PFMA requires that the Provincial Treasury prepare consolidated fi nancial statements in respect of the provincialdepartments in the province; public entities under the ownership control of the provincial executive of the province and the provincial legislaturein the province. The Gauteng Department of Finance Treasury did not prepare such consolidation as envisaged in the PFMA. Two separatecombinations were prepared due to a signifi cantly different basis of accounting being applied.Internal control22.I considered internal control relevant to my audit of the fi nancial statements, and compliance with laws and regulations. The matters reportedbelow under the fundamentals of internal control are limited to the signifi cant defi ciencies that resulted in the basis for qualifi ed opinion andthe fi ndings on compliance with laws and regulations included in this report.Leadership23.24.The accounting offi cer did not exercise adequate oversight responsibility regarding fi nancial reporting and compliance and related internalcontrols of fi nancial statements preparation resulting in material misstatements as identifi ed by the auditors.The department did not adequately plan and provide training on preparation of consolidated fi nancial statements.Financial management25.Insuffi cient group wide controls were implemented to ensure that the consolidation process addresses the requirements for combination andinsuffi cient group wide instructions issued to the departments regarding the required combination packs for the provincial combination. Thefi nancial statements to be included on the annual report were not adequately reviewed prior to submission for audit purposes.Johannesburg28 May 2013Combined Financial Information Annual Report 2011/12 | Gauteng Provincial Government 21