The Speaker

Letter from the Minister of Finance dated 17 March 2005 to the Speaker of the National Assembly, in terms of section 65(2)(a) of the Public Finance Management Act, 1999 (Act No 1 of 1999), explaining the delay in the tabling of the Annual Report of the Government Employees Pension Fund:

SUBMISSION OF THE ANNUAL FINANCIAL STATEMENTS OF THE GOVERNMENT EMPLOYEES PENSION FUND (GEPF) FOR THE FINANCIAL YEAR ENDING MARCH 2004

In terms of the provisions of section 6A of the Government Employees Pension Law, 1996 (Proclamation No 21 of 1996), the Minister of Finance has been appointed as interim trustee of the GEPF until such time as a duly elected Board of Trustees (Board) has been appointed.

Section 9(1) of the Law provides that the Board shall, in terms of section 13 of the Law, submit copies of such duly audited financial statements, to the Minister of Finance.

The statements mentioned in terms of section 9(2) shall consist of-

Statement of Funds and Net Assets as at 31 March
Revenue Account for the year ended 31 March
Cash Flow Statement for the year ended 31 March
Notes to the Annual Financial Statements as at 31 March

The statements are to be compiled in conformity with Generally Accepted Accounting Practice (GAAP) and be accompanied by a report of the auditors of the Fund as prescribed in section 13 of the Law.

Section 9(6) further provides that the Minister of Finance shall, within 30 days of receipt of such financial statements, submit the annual financial statements as well as the report of the auditors and information referred to, to Parliament together with such comments as the Minster may wish to make.

The annual financial statements and reports required by Law for the financial year ending 31 March 2004 have been compiled and audited by the external auditors of the Fund, Deloitte and Touché, PricewaterhouseCoopers Inc. and Faizel Sondiyazi Inc.

The financial statements as represented are unqualified and, in all material respects, fairly represent the net assets of the Fund as at 31 March 2oo4 and the results of its activities and cash flows for the year ended, in accordance with GAAP as applicable to retirement funds in South Africa, the provisions of the GEPF. Without qualifying their opinion, the auditors raised an emphasis of matter on interest payable, interest receivable, corporate governance regarding the Board of Trustees and other committees as well as the ownership of certain investment properties.

In reviewing the draft financial statements and annual report the auditors also conducted a comprehensive audit of events subsequent to the year-end. This resulted in some disclosure items being added to the financial statements.

As a result of these changes there was a delay in submitting the annual report to Parliament. The delay would be discussed with the auditors during the planning of the 2004/05 audit to prevent a recurrence thereof.

Kind regards

Signed
TREVOR A MANUEL, MP
MINISTER OF FINANCE AND INTERIM TRUSTEE OF THE GEPF