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)
11.3 Indication of the Extent of Compliance with Minimum Requirements
11.3.1 Defence continues to manage its inventory according to the North Atlantic Organisation (NATO)
prescripts. Currently the DOD still accounts for its assets according to NATO, although the
National Treasury reporting requirements are according to the Standard Chart of Accounts
(SCOA). Due to the difference between NATO classifications and SCOA classification, Defence
will only be able to do logistical reporting after IFMS is fully implemented.
11.3.2 Progress was made with respect to coupling of SCOPA codes to NATO codes but due to the
bridging tool that was found to be insufficient for logistic reporting purposes an acceptable level
of usage was attained.
11.4 Extent of compliance with Asset Management Reforms (AMR) Milestones
11.4.1 Meeting Minimum Requirement for Asset Registers. Presently the Asset Registry largely
conforms to the requirements set, but is lacking in especially pricing and financial management
of the assets. The outcome of the investigation to bring the present asset register to the new
requirements depends largely upon the implementation of IFMS and the DOD Integrated
Resource Management System.
11.4.2 Basic Asset Policies in Place. Basic asset policies are in place for cash based accounting and
asset management which is available throughout the Department. The LIRP Policy Workgroup
will be looking into aligning and updating these policies with GRAP requirements.
11.4.3 Drafting of Strategy and Life Cycle Plans. The Logistical Intervention Realignment
Programme (LIRP) Accounting and Life Cycle Management Workgroups are investigating the
incorporation of life cycle management into all aspects of asset management. Furthermore a
Supply Chain Workgroup is being established to facilitate the management of assets throughout
its entire life.
11.5 Accounting and Reporting in terms of GRAP
Historically, the DOD expensed assets at date of purchase in terms of cash based accounting
and thereafter accounted for assets in terms of item accounting. Due to the moratorium by the
National Treasury the DOD was restricted to enhance its asset accounting systems in lieu of
the envisaged IFMS. The DOD is thus unable to report on assets as required by GRAP. The
National Treasury was approached for authority to deviate from GRAP, however approval was
denied. The required disclosure on the movement of tangible and intangible capital assets is thus
omitted from the notes to the financial statements.
12. Events after the reporting date
No events are reported.
13. Performance information
Performance information is described in the Annual Report.
237 Annual Report FY 2007 - 2008
| Financial Performance |