Chapter 2 - P rogramme 1 - Department of Defence

| Department of Defence | Vote 20 |
REPORT OF THE ACCOUNTING OFFICER
for the year ended 31 March 2008 (continued)
(Chairperson) (27 May 2005); Mr DS Molapo (27 May 2005); Mr KA Ross (27 May 2005) and
Mr GR Witthöft (7 June 2005), Ms J Kumbirai (6 December 2007). The internal members were
Lieutenant General JL Jansen van Rensburg: (DOD: Chief of Corporate Staff) (1 February 2006)
and Mr TE Motumi: (DOD: Chief of Policy and Planning) (7 February 2006).
• Responsibilities. The Audit Committee complied with its responsibilities in terms of Section
38(1)(a) of the PFMA and Treasury Regulation 3.1.13. Four scheduled and one special meeting
were held. Special In-Committee Meetings were held between the Audit Committee members.
Activities of the Audit Committee were formalised into a plan, allowing the coverage of the total
spectrum of risk areas that needs to be assessed and monitored, in accordance with the PFMA
and National Treasury Regulations. The external and internal members, Ex-Officio Officers, the
Auditor-General, Inspector General DOD and the Accounting Officer, formally assessed the
DOD Audit Committee.
• Activities. Audit Committee members had an opportunity in 2007/08 to be exposed to DOD
Force Structure Elements through a physical visit and also accompanied audit team members in
conducting audits. The Audit Committee had direct access to the Auditor-General, the Secretary
for Defence and the Chief of the South African National Defence Force.
8.3.5 Internal Control. A framework of internal control has been implemented for financial
management in the Department. The framework consists of the various resource sub-systems of
control that are impacting on the revenue, expenditure, assets and liabilities of the Department.
Each sub-system is evaluated bi-annually for compliance with the regulatory framework taking
risks and adverse audit findings into account.
8.3.6 Budgeting and Financial Management. The departmental strategic business plan and
related budget is tabled in Parliament and authorised by the related Appropriation Act. The
plan, programme and budget is based on Government’s Plan of Action and related guidelines
by the Minister, Secretary for Defence and Chief of the National Defence Force. Budgeting
is integrated with the accounting and cash management functions. The Minister, Secretary for
Defence and budget authorities monitor execution of the budget monthly regarding expenditure,
cash flow including improper expenditure and under-collection of revenue. The Financial
Management System is still cash-based consequently financial information for decision-making
is fairly limited. A system has been developed to support revenue management on a par with
expenditure management.
8.4 External reporting
8.4.1 Annual Report. The Minister tables the annual report, including financial statements to provide
an account of the department’s performance against the objectives set in the strategic business
plan and its financial position and performance against the appropriate budget.
8.4.2 Accounting Standards. The financial statements are set out in accordance with Generally
Recognised Accounting Practices (GRAP) as determined by the National Treasury.
8.4.3 Performance Measures. The performance measures for departmental outputs are set out in
the strategic business plan as measurable outputs and targets. The actual performance against
these measures is reported in the main portion of the annual report. The resource management
information systems are not integrated.
233 Annual Report FY 2007 - 2008
| Financial Performance |