GDF Annual Report - Gauteng Provincial Treasury

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SECTION 4: ANNUAL Report of FINANCIAL the Auditor-GeneralSTATEMENTSinterdepartmental claims of R31 943 000, werewritten off by the department during the year.Restatement of corresponding figures10. As disclosed in note 24 to the financial statements,the corresponding figures for 31 March 2010, havebeen restated as a result of an error discoveredduring 2011 in the financial statements of theGauteng Department of Finance at, and for theyear ended 31 March 2010. Misstatements in thecorresponding figures (2009-10) were identifiedduring the audit of the financial statements ofthe current year relating to irregular expenditurewhich amounted to R76 467 371. Managementcorrected the misstatement by restating thecorresponding figure for irregular expenditure.Accruals11. Accruals reflected in note 20 which exceeded thepayment term of 30 days as required by TreasuryRegulation 8.2.3 amounted to R80 644 000. Thisamount, in turn, exceeded the voted funds to besurrendered of R30 586 000 as per the statementof financial performance by R50 058 000. Theamount of R50 058 000 would therefore haveconstituted unauthorised expenditure had theamounts due been paid in time.Additional matter12. I draw attention to the matter below. My opinion isnot modified in respect of this matter:Financial reporting framework13. The financial reporting framework prescribedby the National Treasury and applied by theGauteng Department of Finance is a complianceframework. Thus my opinion would have reflectedthat the financial statements had been properlyprepared instead of fairly presented as required bysection 20(2)(a) of the PAA, which requires me toexpress an opinion on the fair presentation of thefinancial statements of the Gauteng Departmentof Finance.REPORT ON OTHER LEGAL ANDREGULATORY REQUIREMENTS14. In accordance with the PAA and in terms of GeneralNotice 1111 of 2010, issued in GovernmentGazette 33872 of 15 December 2010, I includebelow my findings on the annual performancereport as set out on pages 19 to 114 and materialnon-compliance with laws and regulationsapplicable to the department.Predetermined objectives15. There are no material findings on the annualperformance report.Compliance with laws andregulationsAnnual financial statements16. The financial statements submitted for auditdid not comply with section 40(1) of the PFMA.Material misstatements were identified during theaudit, and were corrected by management.Expenditure management17. As disclosed in note 25 of the financial statements,the department incurred fruitless and wastefulexpenditure contrary to the requirements ofsection 38(1)(c)(ii) of the PFMA and TreasuryRegulation 9.1.1 amounting to R121 434 261 dueto interest and contract settlement costs.18. As disclosed in note 8 of the financial statements,the department incurred unauthorised expenditurecontrary to section 39(2)(a) of the PFMA amountingto R3 124 000 as a result of overspending oncurrent payments (goods and services) for theTechnical Support Services programme.136136Annual Report 2010 / 2011
SECTION 4: ANNUAL Report of FINANCIAL the Auditor-GeneralSTATEMENTS19. All payments due to creditors were not settledwithin 30 days from receipt of an invoice, as perthe requirements of section 38(1)(f) of the PFMAand Treasury Regulation 8.2.3.20. As disclosed in note 24 of the financial statements,the department incurred irregular expenditurecontrary to the requirements of section 38(1)(c)(ii)of the PFMA amounting to R2 104 307, as propersupply chain management processes were notfollowed.Procurement and contract management21. Treasury Regulations 16A9.1 provides that theaccounting officer must reject any bid from asupplier who fails to provide written proof from theSouth African Revenue Service that the suppliereither has no outstanding tax obligations or hasmade arrangements to meet outstanding taxobligations. For certain suppliers, the departmentdid not have tax clearance certificates.INTERNAL CONTROL22. In accordance with the PAA and in terms of GeneralNotice 1111 of 2010, issued in Government Gazette33872 of 15 December 2010, I considered internalcontrol relevant to my audit, but not for the purposeof expressing an opinion on the effectiveness ofinternal control. The matters reported below arelimited to the significant deficiencies that resultedin the findings on compliance with laws andregulations included in this report.Leadership23. Management did not exercise adequate oversightresponsibility regarding financial reporting andcompliance with laws and regulations and relatedinternal controls which resulted in instances of noncompliancewith PFMA and Treasury Regulations.Financial and performancemanagement24. Management did not prepare accurate andcomplete financial statements that are supportedand evidenced by reliable information. Thefinancial statements were subject to materialamendments resulting from the audit.OTHER REPORTSInvestigations25. An investigation into alleged duplicate paymentshas been undertaken by the department and isongoing.26. The department is also in the process ofundertaking disciplinary actions and carrying outthe recommendations of the outcomes from theforensic business unit investigations.Performance audits27. A performance audit was conducted during theyear under review on the department’s use ofconsultants. The management report was issuedin March 2011 to the Gauteng Department ofFinance.28. A performance audit is being conducted onthe Readiness of Government to report on itsperformance. The focus of the audit is on howgovernment institutions are guided and assisted toreport on their performance, as well as the systemsand processes that they have put in place. Thefindings will be reported on in a separate report.Johannesburg30 July 2011Gauteng Department of Finance137
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Annual Report2010/11Building a resu
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FOREWORD BY THE MECAs an activist,
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EXECUTIVE SUMMARYThe 2010/2011 fisc
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SECTION 1:DEPARTMENTAL OVERVIEW
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SECTION 6:OVERSIGHT REPORT
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SECTION 6: OVERSIGHT REPORTTABLE 1.
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GDF Annual Report - Gauteng Provincial Treasury

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