DETAILED ACTION PLAN TO ARVERT DISCLAIMERS IN FUTURE: 2005/06

 

 

No

Weakness

Measure

Target

Action steps

By Whom

Timing

Resources required

Budget

OPENING BALANCES

1

Opening balances and correction of prior year errors

Report from independent contractor that opening balances is correct

June 2007

Appointed KPMG to assist with verification of opening balances

All supporting documentation made available to the contractor to assist with the reconciliation of the opening balances

CFO

Financial Accountant

June 2006

Finance staff

R1 038 per hour

2

An amount of R7 797 471 irreconcilable difference

Report from independent contractor that opening balances is correct

June 2007

Appointed KPMG to assist with verification of opening balances

CFO

Financial Accountant

June 2006

Finance staff

R1 038 per hour

3

An amount of R1 579 763 incorrectly disclosed

All amounts in the AFS is correctly disclosed

June 2007

Assistance of KPMG requested to assist with the drafting of the AFS

CFO

Financial Accountant

June 2006

Finance staff

R1 038 per hour

PROPERTY, PLANT AND EQUIPMENT (PPE)

1

Opening balance for PPE does not agree to the closing balance of 2003/04 the Fixed asset register (FAR)

Opening balances agree to the closing balances

End June

Update the opening balances of the prior year to agree to the 2003/04

Finance officers

End March

Financial Accountant

Finance staff

None

Recalculate the depreciation on assets that were present in 2003/04

Finance officers

End March

Financial Accountant

Finance staff

None

Update the accounting records with these adjustments and disclose changes in prior year figures correctly

Financial Accountant

Mid April

CFO

Finance staff

None

2

Monthly reconciliations not done between the FAR and the general ledger

Monthly recons are prepared, filed and reviewed

End April

Reconciliation the FAR with the General ledger on a monthly basis

Finance officers

End April

Financial Accountant

Finance staff

None

3

Asset tags on the assets do not agree to the asset tags numbers in the FAR

Asset tags agree to the FAR

End April

Reconcile the assets with the asset register

Seek assistance as to the correct accounting treatment

Financial Accountant

SCM Manager

End April

CFO

Finance staff

None

4

Material number of assets did not have asset numbers

All assets are barcoded

End April

Bar code all assets

Update the asset register with the bar code

Financial Accountant

SCM Manager

End April

CFO

Finance staff

None

5

Asset count sheets not reviewed

Asset count sheet signed as reviewed

End April

Asset count sheets signed by Financial Accountant and SCM Manager

Financial Accountant

SCM Manager

End April

CFO

Finance staff

None

6

Intangible assets expensed

Intangible assets correctly treated

End June

Develop and intangible asset policy

Update the AFS to include the items expenses

Financial Accountant

End June

CFO

None

7

No residual values for buildings determined

Report from valuer giving the residual amounts

End June

Appoint valuers to perform residual value calculation

Obtain a written report from the valuers on the work done

Adjust AFS with the figures obtained

CFO

Financial Accountant

End June

Professional valuer

R8, 000.00

8

Midrand storage not properly stored

Assets stored in proper order

End March

Store items in a proper manner

Asset Officer

End March

Temps

R100 per day

9

Revaluation reserve overstated

Revaluation reserve agree with AFS

End June

Restate AFS to reflect the correct value of the Revaluation reserve

Financial Accountant

End June

CFO

None

BANK AND CASH

1

Bank reconciliation for Tsunami did not reconcile

Tsunami bank account reconciles

End March

Review bank account for differences

Pass journals accordingly

Financial Accountant

End March

CFO

None

2

No bank reconciliation presented for FS

FS bank account reconciles and reviewed

End March

Ensure all bank reconciliations are performed

Review all the recons for National and Provinces

CFO

Financial Accountant

Monthly

Finance Staff

None

3

Three bank accounts were not accounted for in the financial statement

All the bank accounts are included in the AFS.

Monthly

Review the bank statement for inclusion of bank account in the AFS

CFO

Financial Accountant

Monthly

Financial Accountant

Finance officers

Finance staff

None

Adjust the prior year figures (comparatives for 2005/06) to include the bank accounts omitted and disclose the adjusting of comparatives adequately

Financial accountant

End June

CFO

None

4

Comparative figures acceptable explanation not submitted

Report from contractor that opening balances is correct

End June

Appoint external contractor (KPMG) to assist with opening balances

 

CFO

 

End June

Financial Accountant

None

5

Difference of R403K in investment certificate and accounting records

Bank certificate agrees with accounting records

End April

Obtain bank statement from ABSA

Reconcile the investment account to the bank statement

Financial Accountant

End April

CFO

Finance staff

None

6

Balance of the credit card differs with bank confirmation

Bank certificate agrees with accounting records

End April

Obtain bank statement from ABSA

Reconcile the credit card account with the bank statement

Financial Accountant

End April

CFO

Finance staff

None

REVENUE AND DEBTORS

1

No controls over the calculating and invoicing of revenue

Invoices are checked by a senior official before it is send to the debtor (evidence of checking)

July 2006

Invoices are checked and signed as evidence by a senior Finance staff member before it is send to the debtor

Bookkeeper: Revenue

July 2006

Management Accountant

None

Invoicing is done by someone other than the person compiling the pro-forma invoice

July 2006

Invoicing is done by someone other that the person who compiled the pro-forma invoice

Management accountant

July 2006

Finance staff

None

Invoicing on PASTEL is restricted to certain users

Management accountant

End March

PASTEL Staff

PASTEL staff call-out

2

No supporting documentation to confirm debtors balance

All debtors confirmations received

July 2007

Send out debtors confirmations for the balance outstanding

CFO

End June

CEO

None

3

Long outstanding debt not written off

All long outstanding debts written off

June 2007

Prepare a list of the long outstanding debts for approval by the NEC

CFO

End June

CEO

None

4

The recoverability of the NORAD debtor could not be confirmed

The debtor is written off as irrecoverable

April 2007

A letter is written to the CEO to approve the write off

CFO

April 2007

CEO

None

5

Revenue amount disclosed in AFS did not agree to the debtors reconciliation

Report from contractor that opening balances is correct

June 2007

Appoint external contractor (KPMG) to assist with opening balances

 

CFO

 

End June

Financial Accountant

None

6

Accounts receivable balance per SALGA records did not agree to confirmations

Accounting records agree to confirmation

June 2007

Request assistance form the CEO to liaise with the debtor disputing the balance

CFO

June 2007

CEO

None

Obtain a settlement offer from the municipalities where the debts are disputed

HOU

End March

CFO

Finance Officer

Telephone costs

7

Incorrect application of AC 133

Accounting standards is correctly applied

June 2007

KPMG to perform a GAP analysis ito compliance with the accounting standards

CFO

June 2007

Financial Accountant

KMPG

R1, 038 per hour

SALARIES AND WAGES

1

Difference of R148 076 between salary payment and remuneration report

Remuneration report agrees to salary payment

Monthly

Interface of VIP Payroll with PASTEL

Perform this interface on a monthly basis

Financial Accountant

Monthly

Payroll Accountant

VIP & PASTEL

Cost of call-out

2

Leave days did not agree with HR Memo

Leave days agree to the Payroll System

Monthly

Acquire electronic system for leave days

Perform a reconciliation between the payroll system and the accounting records

HOU: HR

Monthly

COO

Cost of system

3

Salary reports did not agree with EFT

Salary reports agree with EFT

Monthly

Perform a reconciliation between the EFT and salary report

Financial Accountant

Monthly

Payroll Accountant

None

4

Employee tax did not agree with recorded amount

Employee tax agree with recorded amount

Monthly

Perform a reconciliation between the employee tax paid to SARS and the amount deducted

Financial Accountant

Monthly

Payroll Accountant

None

EXPENDITURE

1

Supporting documentation not cancelled as paid after payment is made

All supporting documentation cancelled once paid

Ongoing

Once an invoice is paid, the signatory cancels the supporting documentation

Signatories

Ongoing

Signatories

Finance staff

None

2

Payments were supported by copies of invoices

All payments made based on original invoices

Ongoing

Payment is not released unless the invoice is original

Signatories

Financial accountant

Finance officers

Ongoing

CFO

Financial Accountant

Finance staff

None

CREDITORS

1

Inadequate creditors reconciliation were performed. Creditors with debit balance were included in the balance of creditors resulting in understatement creditors and debtors with the said amount.

Monthly creditors reconciliations

Monthly

Perform monthly creditors reconciliations

Finance officers

Monthly

Financial accountant

None

Review monthly creditor reconciliations

Financial accountant

Monthly

CFO

None

2

Levies received in advance not properly disclosed

Levies received in advance adequately disclosed

June 2007

Ensure all disclosure is achieved KMPG to assist

Financial Accountant

June 2007

CFO

KMPG

R1, 038 per hour

JOURNALS

INVESTIGATION INTO IRREGULARITIES

1

Not all potential debt to be recovered as a result of forensic investigation was accounted for in the financial statements

All debts identified to be recovered is adequately disclosed in the AFS

End June

Based on attorney report on the forensic investigation, create debtors for all debts to be recovered

CFO

End June

CEO

None

Make a note on the AFS stating that these amount should have been disclosed in the AFS

Financial Accountant

End June

CFO

None

Adequately disclosed these debtors in the AFS

Financial Accountant

End June

CFO

None

DISCLOSURE OF FRUITLESS EXPENDITURE

1

Not all fruitless and wasteful expenditure has been disclosed

All fruitless and wasteful expenditure is adequately disclosed

Ongoing

Keep register of all fruitless and wasteful expenditure incurred and the steps taken

CFO

Ongoing

CFO

Financial Accountant

Finance officers

None

Adequately disclose this information in the Annual financial statements

Financial Accountant

Ongoing

CFO

None

INCOME TAX

1

SALGA did not apply for income tax exemption

SALGA is exempted from Income Tax

End June

Write to SARS to apply for exemption

Financial Accountant

End May

CFO

None

LIMITATION OF SCOPE

1

Not all documentation (bank confirmations) were submitted for audit purposes

All documentation is submitted for audit purposes

Ongoing

National office to work with provincial offices to ensure that all request (Bank confirmation) is obtained

Financial accountant

Ongoing

CFO

HOU

None

2

Journal entries in the accounting records could not be substantiated by adequate supporting documentation

All journal entries are adequately supported

Ongoing

Finance department of SALGA will have a journal book where all journals are recorded

Finance officer

End February

CFO

Financial Accountant

Cost of journal book

Journals identified are recorded in the journal book (CFO to train staff on how to record journal)

Finance officer

Ongoing

CFO

Financial Accountant

None

The journal is recorded in PASTEL using the journal book as a reference

Finance officer

Ongoing

CFO

Financial Accountant

None

Before the journal is posted to the accounting records, the journal together with the supporting documentation is forwarded to the National office for review and approval

Finance officer

Ongoing

CFO

Financial Accountant

Finance staff

Cost of courier / fax

Upon approval from the national office, the journal is posted. The hardcopy of the approved journal together with the supporting documentation is filed in the journal file

Finance officer

Ongoing

Finance staff

None

Journal entries at the national office is restricted to certain users (Financial accountant & CFO)

Financial accountant

Ongoing

CFO

Financial Accountant

None

3

Signed of TBs for provinces could not be obtained

All TBs are submitted to the auditors

August 2007

Sign off TBs used for the AFS and submit to auditors

Financial Accountant

August 2007

CFO

Finance Officers

None

4

VAT Creditor: FS

Confirmation received from SARS that the VAT creditor IS cleared

June 2007

Obtained proof from SARS that no amount is owing to them by FS

CFO

June 2007

Financial Accountant

None

DISCLOSURE IN AFS

1

The AFS did not comply with GRAP and GAAP

AFS complies ito GRAP & GAAP

End June

Assistance has been requested from KPMG

Financial Accountant

End June

CFO

KPMG

R1, 038 per hour

NON-COMPLIANCE WITH PFMA AND TREASURY REGULATIONS

1

Treasury Regulations 32.2.5: Finance leases

No further finance leases entered into

End March 2007

Memorandum sent to EMT not to enter into Finance leases

CFO

End March 2007

CEO

Financial Accountant

None

2

Bank reconciliation not prepared at least weekly

Bank reconciliation is prepared monthly

Monthly

Prepare bank reconciliations monthly

Financial Accountant

Monthly

CFO

Finance officer

None

3

Bank account went into overdraft

Bank not allowed to go into overdraft

End April

Prepare a letter to the accounts manager informing them of the requirements of the PFMA

CFO

End April

Finance staff

None

4

Quarterly reports did not comply

Quarterly reports comply with legislation

January 2007

Ensure Quarterly reports meet legislative requirements

Financial Accountant

January 2007

CFO

None

5

Reporting to EA on compliance with PFMA

Quarterly reporting to the EA on compliance to PFMA

April 2007

Submit a report together with the quarterly report on the compliance to PFMA

CFO

April 2007

CEO

Financial Accountant

None

6

Strategic plan did not comply with TR 30.1

Strategic plan complies with TR 30.1

June 2007

All requirements of TR30.1 should be incorporated into the new strategic plan 2007 2009

EMT

June 2007

CEO

None

7

Declaration of interest by NEC

NEC declares their interest at every meeting

May 2007

Attendance register to be updated provide a column where private / business interest can be declared

CEO

May 2007

CFO

None

8

Surplus funds not invested at CPD

Surplus funds invested at CPD

April 2007

Write to Treasury requesting permission to open a bank account

Invest all surplus cash in this account

CFO

April 2007

Financial Accountant

None

CONTROL ENVIRONMENT ISSUES

1

Lack of segregation of duties with regard to acquisition, recording and custody of assets

Segregation between the functions is achieved

End March 2007

Separate functions between the acquisition, recording and custody of assets

SCM Manager

Financial Accountant

End March

CFO

None

Regular reviews to be conducted

SCM Manager

Financial Accountant

Ongoing

CFO

None

2

AA did not review cash flow projections

Cash flow projections submitted at NEC Meeting (Standard item on agenda)

May 2007

Submit cash flow projections to NEC

CFO

Ongoing

CEO

None

3

Movement of assets not properly authorised

Assets not moved until a movement form is completed

Ongoing

Compile a form to be used when moving assets and report to all staff

SCM Manager

End March 2007

CFO

None

Ensure movement form completed with every move

SCM Manager

Ongoing

Asset Officer

None

4

Asset register not timeously updated with new additions

Asset register reconciles to accounting records monthly

Monthly

Additions to be included in asset register monthly

Asset officer

Ongoing

SCM Manager

Financial Accountant

None

5

Invoices to municipalities not signed

All invoices signed before sent to municipalities

July 2006

Sign invoices as evidence of review

Management Accountant

July 2006

Bookkeeper: Revenue

None

6

No performance contracts in place

 

 

 

 

 

 

 

7

Provincial payrolls not certified

Provincial payrolls certified

April 2007

Provincial staff sign payslip register on receipt of payslip

Finance officer

April 2007

Payroll Accountant

None

8

Inadequate budget policy

Adequate budget policy

April 2007

Develop a budget policy

CFO

April 2007

Financial Accountant

None

9

No written / formal agreement entered into with various municipalities

Formal agreement entered into with municipalities

June 2007

Develop an agreement to be signed by all municipalities

ED: G, IR

ED: ML & HR

June 2007

CEO

CFO

None

10

No stock count of consumables

Consumables stock count conducted and disclosed

Monthly

Conduct a stock count

Ensure the count is reviewed (evidence of review)

HOU: Admin

Monthly

COO

None

INTERNAL AUDIT

1

SALGA did not review the effectiveness of internal audit

Regular review of effectiveness of internal audit

Ongoing

Regular meetings with Internal Audit regarding their performance against their plan

CFO

Ongoing

CEO

None

2

No review of quarterly reports by IA

Quarterly reports reviewed by IA

Ongoing

Submit quarterly reports to IS for review

CFO

Ongoing

Financial Accountant

None

3

Internal audit did not execute all planned projects

Monitor performance of the IA function

Ongoing

Regular meetings with Internal Audit regarding their performance against their plan

CFO

Ongoing

CEO

None

INVESTIGATION INTO IRREGULARITIES

1

Potential debt to be recovered (per forensic investigation) was not developed

Conclusion reached on the debt as reported by forensic investigators

Ongoing

NEC direction seeked on the matter

CEO

Ongoing

NEC

None

HR PLAN

1

HR Plan not developed

HR plan developed

June 2007

HR to develop a plan to ensure proper management of the human resource demand

HOU: HR

June 2007

COO

None

AFS

1

AFS not submitted on time

AFS Submitted on 31 August 2007

August 2007

Submit AFS on time together with the assistance of KPMG

CFO

August 2007

Finance staff

None