Development of offenders - DCS-Home
Development of offenders - DCS-Home
Development of offenders - DCS-Home
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Nature <strong>of</strong> qualification, disclaimer,<br />
adverse opinion and matters <strong>of</strong><br />
non-compliance<br />
Qualified opinion<br />
Department <strong>of</strong> Correctional Services - Vote 21<br />
Report <strong>of</strong> the Accounting Officer<br />
for the year ended 31 March 2012<br />
Financial year in which it first arose<br />
R57 million (2009: R236 million).<br />
This resulted from inadequate<br />
controls over the review <strong>of</strong><br />
information captured on the<br />
asset register<br />
Minor movable tangible assets 2009/2010 Audit finding<br />
• The existence <strong>of</strong> minor<br />
tangible capital assets valued<br />
at approximately R31 million<br />
(2009: R38 million) as disclosed<br />
in disclosure note 31.5 to the<br />
financial statements could<br />
not be physically identified.<br />
Furthermore, the completeness<br />
<strong>of</strong> minor tangible capital assets<br />
disclosed in disclosure note<br />
31.5 to the financial statements<br />
could not be verified. Unable to<br />
trace some <strong>of</strong> the assets to the<br />
asset register. Management had<br />
failed to implement adequate<br />
controls to ensure that the assets<br />
as per the asset register and<br />
financial statements agree with<br />
the physical assets on hand.<br />
The Department’s records did<br />
not permit the application <strong>of</strong><br />
alternative audit procedures<br />
to verify the existence and<br />
completeness <strong>of</strong> these assets.<br />
Asset Management The Department received a<br />
qualified audit opinion in 2010/11<br />
on fixed assets. The basis for<br />
qualified opinion was due to the<br />
following:<br />
• Non-cash additions overstated<br />
by internal transfers <strong>of</strong> movable<br />
tangible capital assets between<br />
departmental stores<br />
• Non-cash disposals overstated<br />
by internal transfers <strong>of</strong> movable<br />
tangible capital assets between<br />
departmental stores.<br />
This was a result <strong>of</strong> LOGIS<br />
deficiency in not being able to<br />
account for internal transfers<br />
separately. The matter was brought<br />
to the attention <strong>of</strong> National Treasury<br />
for National Treasury to amend the<br />
Annual Financial Statement (AFS)<br />
Framework as well as LOGIS.<br />
Progress made in clearing /<br />
resolving the matter<br />
Actions taken by department (what<br />
was done)<br />
An action plan was developed to<br />
address the findings <strong>of</strong> AGSA:<br />
Achievements:<br />
• The department has appointed<br />
asset controllers and sub asset<br />
controllers to carry out functions<br />
<strong>of</strong> asset management. These<br />
<strong>of</strong>ficials are required to conduct<br />
monthly spot-checks.<br />
• The annual asset verification<br />
is also conducted with the<br />
assistance <strong>of</strong> the interns.<br />
Actions taken by department (what<br />
was done)<br />
This was a result <strong>of</strong> LOGIS<br />
deficiency in not being able to<br />
account for internal transfers<br />
separately. The matter was brought<br />
to the attention <strong>of</strong> National Treasury<br />
for National Treasury to amend the<br />
Annual Financial Statement (AFS)<br />
Framework as well as LOGIS.<br />
In the meantime while National<br />
Treasury was in the process <strong>of</strong><br />
amending the AFS framework<br />
and LOGIS, the Department<br />
implemented an improved system<br />
<strong>of</strong> internal controls. A template was<br />
designed and implemented with<br />
effect from 1 April 2011; to account<br />
for non-cash additions and noncash<br />
disposals.<br />
The Department managed<br />
to account for inter-store<br />
transfers using the template; the<br />
reconciliation was performed for<br />
non-cash additions and non-cash<br />
disposals from April 2011 to March<br />
2012.<br />
ANNUAL REPORT 2011/12 93