GDF Annual Report - Gauteng Provincial Treasury

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