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)
14.1.5 Special Defence Account (Par 4). The Committee recommended that the Accounting
Officer ensures:
05/06 AG
ANNUAL
REPORT
REF
Page 345,
par 5.2
Page 345,
par 5.3
Page 345,
par 5.3
RECOMMENDATIONS MADE
IN SCOPA RESOLUTIONS
DATED 21 NOV 07
a) The approval of the
classification of the SDA
according to the PFMA.
b) That the approved policies and
procedures be developed and
implemented.
c) Approval of the constitution
for the Arms Control and Non-
Proliferation Fund Committee.
DOD PROGRESS ON ACTION PLANS
This matter was awaiting the promulgation
of the amended Public Finance Management
Act, however the DOD has decided not to
pursue the classification of the Special Defence
Account as a Schedule 4 entity in terms of the
Public Finance Management Act.
Both the policies and procedures for the
authorisation of amendments of master files
regarding supplier account details as well as
on bank and cash management have been
developed and promulgated. No adverse audit
finding has been raised in this regard during
the audit for the financial year 2006/2007.
The Arms Control and Non-Proliferation
Fund Committee comprises members from
numerous government departments and is
chaired by Mr Minty from the Department
of Foreign Affairs. The DOD has formally
forwarded this audit finding to the Department
of Foreign Affairs. The Terms of Reference
for the Arms Control and Non-Proliferation
Fund Advisory Committee, stipulating the
conditions for the spending of monies in the
Fund, was signed into effect on 15 May 2008.
14.2 A SCOPA hearing on the DOD Annual Report for the financial year 2006/2007 was held on
21 November 2007 and the SCOPA resolutions were adopted by Parliament on 8 February 2008.
The DOD did submit a response to SCOPA on 13 February 2008 on certain of the matters raised
but is still in process to compile action plans on all the resolutions. The DOD will report on the
progress made on these SCOPA resolutions in the 2008/2009 Annual Report.
15. Financial Management
15.1 The Constitution required the implementation of Generally Accepted Accounting Practices by
the public sector institutions. This has been initiated by the implementation of the Public Finance
Management Act and related Treasury Regulations in 2000. The final step is the determination
of accounting standards prescribed by the Accounting Standards Board and implemented by
the National Treasury. Defence is unable to comply because the current resource management
information systems are inadequate and not integrated. Implementation of the Financial
Management Improvement Project (FMIP) incorporating the Integrated Financial Management
System (IFMS) will bring relief in the medium to long term.
15.2 Strategically, the new challenges the Financial Management Division is facing over the medium to
long-term are:
245 Annual Report FY 2007 - 2008
| Financial Performance |