The Speaker

Letter from the Minister of Finance dated 08 March 2005 to the Speaker of the National Assembly, in terms of section 8(5)(a) of the Public Finance Management Act, 1999 (Act No 1 of 1999), explaining the delay in the tabling of Consolidated Financial Statements.

LATE TABLING OF CONSOLIDATED FINANCIAL STATEMENTS

I am writing to advise that the tabling of the Consolidated Financial Statements in terms of section 8(3) of the Public Finance Management Act (PFMA) will be delayed, and to request an extension for the tabling thereof in Parliament.

Section 8(3) of the PFMA stipulates that "The Minister must submit the Consolidated Financial Statements and the Audit Report on those statements within one month of receiving the report from the Auditor-General, to Parliament for tabling in both Houses". The timing for the tabling referred to in this case is the end of October 2004. Section 8(5)(a) requires me to provide written explanation setting out the reasons for failure to submit the statements timeously.

Please be advised that the causes for the delay are due to the following:

The year ending 31 March 2004 is the first year in which such consolidated financial statements are required. Departments and entities are thus exposed to the complexities attached to this requirement for the first time, and formats for the redraft of the consolidated financial statements posed a challenge to all stakeholders;
The consolidations done on the previous years’ information raised serious issues with regard to the integrity of the information, thus a more thorough approach was needed this year;
Most public entities did not comply with the deadline for submitting the statements;
The National Treasury and the technical team of the Auditor-General’s Office needed to resolve the disagreement on the nature of the audit opinion, which was resolved on, 28th February 2005; and
The Auditor-General has not been available due to other commitments and has accordingly been unable to review the consolidated financial statements. We have however, received a commitment that the AG will accommodate us by mid March 2005.

The National Treasury intends to table the Consolidated Financial Statements in terms of section 8(3) of the PFMA before the end of March 2005. I have instructed the National Treasury to put in place mechanisms to ensure non-recurrence of these problems.

The National Treasury and the Auditor-General have discussed the matter and both parties agree that the delayed publication will allow for the issues to be addressed comprehensively, thus laying a good foundation for the future.

Kind regards

Trevor A Manuel, MP
Minister of Finance