Chapter 2 - P rogramme 1 - Department of Defence

| Financial Performance |
Annual Report FY 2007 - 2008 216
| Department of Defence | Vote 20 |
From the various reports of the Internal Auditors, the Audit Report on the Annual Financial Statements,
and the management report of the Auditor-General, it was noted that the system on internal control was
not entirely effective for the year under review, as compliance with prescribed policies and procedures were
lacking in certain instances. Significant control weaknesses have been reported by the Auditor-General
under emphasis of matter and in the management report. In certain instances, the weaknesses reported
previously have not been fully and satisfactorily addressed. The effect of these instances has been included
in the Annual Financial Statements and the report of the Accounting Officer.
The Audit Committee has been concerned with the level of skills retained within the DOD in its various
administrative and functional responsibilities, and the readiness of the Department to undertake its
constitutional and statutory responsibilities in a professional and comprehensive manner. The level of
vacancies and the time that is expended on identifying suitable candidates throughout the department has
been an ongoing concern. The reports presented by Internal and External Audit have pointed to various
control lapses and gaps that are pervasive across the Department and needs decisive and committed action
to address and resolve. The information technology architecture also needs considerable investment.
The quality of in-year management and monthly and quarterly reports submitted in terms of the
PFMA
The Audit Committee is satisfied with the content and quality of monthly and quarterly reports prepared
and issued by the accounting authority and the DOD during the year under review.
Evaluation of financial statements
The Audit Committee has:
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REPORT OF THE AUDIT COMMITTEE
for the year ended 31 March 2008 (continued)
Reviewed and discussed the audited annual financial statements to be included in the annual report with
the independent external auditors and the Accounting Officer;
Reviewed the independent external auditors’ management report and management’s response thereto;
Reviewed changes in accounting policies and practices; and
Reviewed significant adjustments resulting from the audit.
The Audit Committee concurs and accepts the independent external auditors’ conclusions on the annual
financial statements, and is of the opinion that the audited annual financial statements should be accepted
and read together with the report of the independent external auditors.
Dr D Konar
Chairman of the Audit Committee