Twenty-Fifth Report of the Standing Committee on Public Accounts, dated 18 September 2002:
The Standing Committee on Public Accounts, having considered the Report of the Auditor-General on the financial statements of the Guardians' Fund (the Fund) for the year ended 31 March 2001 [RP 165-01], and having considered responses to the Committee's queries by the Director-General: Justice and Constitutional Development and the Managing Director: Masters Business Unit, reports as follows:
1. Audit opinion
The Committee noted with concern the Auditor-General's disclaimer of opinion on the financial audit and the qualified opinion on the compliance audit.
The Committee recommends that serious attention be paid to all aspects which led to the disclaimer and the qualified opinion, with a view to avoiding such negative audit opinions being expressed by the Auditor-General in future.
2. Ineffective accounting systems
The Committee noted with concern that the Auditor-General again reported on the ineffective manual accounting system of the Fund.
The Committee welcomes the urgent steps being taken to ensure that the ineffective manual accounting system is phased out and that the target date for completion of full computerisation of the Fund is December 2002.
The Committee recommends that the Department submit a report to it by 15 January 2003, confirming the full and successful computerisation of the Fund.
3. Trained and skilled staff
The Committee is concerned about the fact that the Fund is experiencing a critical shortage of skilled and experienced staff.
The Committee noted that, despite the increased workload, the staff complement could not be increased due to a lack of funds.
The Committee noted that the Department is giving priority to the appointment of trained and experienced accountants to head the various funds, as well as to filling the post of Financial Director for the Master's National Office.
The Committee recommends that the above appointments be made urgently, and that a progress report on the matter be submitted to it by 15 January 2003.
4. Bank reconciliations
The Committee is concerned that either no bank reconciliations or only limited reconciliations were performed regarding the current accounts of the various funds.
The Committee notes the reasons for the failure to do so, welcomes the steps taken to update the reconciliation statements of the various funds, and notes that reconciliations have been brought up to date at several offices.
The Committee recommends that a progress report be submitted to it by 15 January 2003 regarding those offices where bank reconciliations have not yet been brought up to date.
5. Disciplinary action
The Committee noted that the Internal Audit section of the Department was requested to determine the functionality of the various offices, and that a request was made for conducting a forensic audit.
The Committee further noted that charges were laid with the SAPS, that various criminal charges are being investigated, and that disciplinary action is being taken against those suspected of misconduct and negligence in the execution of their duties.
The Committee recommends that the Department submits to it by 15 January 2003 a schedule of the various criminal charges being investigated, and the nature of disciplinary action taken, if any, against those suspected of misconduct and/or negligence.
6. Compliance
The Committee noted that, due to the manual accounting system, it is difficult to comply with certain provisions of the Administration of Estates Act and the Income Tax Act.
The Committee further noted that the computerisation of the Fund will in future significantly improve, to the extent that it may even ensure compliance with the relevant provisions of the above-mentioned Acts.
The Committee recommends that the Department include these compliance aspects in its formal report to the Committee regarding the full and successful computerisation of the Guardians' Fund.
7. Hearing
Having examined the Report of the Auditor-General and having heard the various inputs, the Committee recommends that no hearing be held on the Guardians' Fund for the year under review.