NATIONAL TREASURY: Department: National Treasury

From: Freeman Nomvalo: Accountant-General

To: Mr Pramesh Bhana

Dear Pramesh

Re: Guideline on fees for audits done on behalf of the Auditor-General

Your letter dated 12 March 2007 has reference.

The National Treasury, through the Office of the Accountant-General concurs with the proposed straight 4% increase on each charge out rate as previously published in the SAICA circular 11/2006.

The proposal for a comprehensive research project by SAICA and the Auditor-General is also supported as long as the National Treasury is consulted. Any other proposals would have to be linked to conclusion of the research exercise.

Please do not hesitate to contact me should you need any further assistance.

Sincerely,

Freeman Nomvalo ACCOUNTAN~GENERAL