REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON THE FINANCIAL STATEMENTS
OF THE WAR MUSEUM OF THE BOER REPUBLICS FOR THE YEAR ENDED 31 MARCH 2006
1. AUDIT ASSIGNMENT
The financial statements as set out
on pages 20 to 42, for the year ended 31 March 2006, have been audited in terms
of section 188 of the Constitution of the Republic of South Africa, 1996, read
with sections 4 and 20 of the Public Audit Act, 2004 (Act No. 25 of 2004) and
section 11 of the Cultural Institutions Act, 1998 (Act No. 119 of 1998). These
financial statements are the responsibility of the accounting authority. My
responsibility is to express an opinion on these financial statements, based on
the audit.
2. SCOPE
The audit was conducted in accordance with the International Standards on
Auditing, read with General Notice 544 of 2006, issued in Government Gazette
no. 28723 of 10 April 2006, and General Notice 808 of 2006, issued in
Government Gazette no. 28954 of 23 June 2006. Those standards require that I
plan and perform the audit to obtain reasonable assurance that the financial
statements are free of material misstatement.
An audit includes:
· examining, on a test basis, evidence supporting the amounts and 4isclosures in the financial statements
· assessing the accounting principles used and significant estimates made by management
· evaluating the overall financial statement presentation
I
believe that the audit provides a reasonable basis for my opinion.
3. BASIS OF ACCOUNTING
The entity's policy is to prepare financial statements on the basis of
accounting determined by the National Treasury, as described in note 1.1 to the
financial statements.
4. AUDIT OPINION
In my opinion, the financial statements present fairly, in all material
respects, the financial position of the War Museum of the Boer Republics at 31
March 2006 and the results of its operations and its cash flows for the year
then ended, in accordance with the basis of accounting determined by the
National Treasury of South Africa, as described in note 1.1 to the financial
statements, and in the manner required by the Public Finance Management Act,
1999 (Act No.1 of 1 999)(PFMA).
5. EMPHASIS OF MATTER
Without qualifying the audit opinion, attention is drawn to the following
matters:
5.1 Internal controls and procedures
In terms of section 51(1)(a)(i) of the PFMA, the accounting authority for a
public entity must ensure that the public entity has and maintains effective,
efficient and transparent systems of financial and risk management and internal
control. Even though various internal control procedures were established, it
was noted that some of the internal controls implemented at the War Museum of the Boer Republics were not formally documented, for example:
· Procedures on the receiving, recording and administration of inventory items;
· Procedures for the appointment, dismissal and resignation of staff;
5.2 Property, plant and
equipment
Our audit revealed that the recording and disclosure of property, plant and
equipment in the financial statements did not comply with the International
Accounting Standard - IAS16:
(a) In terms of paragraph 43 of this standard, each part of property, plant and
equipment with a cost that is significant in relation to the total cost of the
item shall. be depreciated separately. Evidence could not be obtained that
management evaluated the fixed assets of the museum to determine whether a part
of an item of property, plant and equipment is significant in relation to the
total cost of that item.
(b) According to this standard, the residual values and the useful life of
fixed assets need to be reviewed annually. Evidence to this effect could also
not be obtained.
5.3 Non-compliance with laws and regulations
Treasury Regulation 32.2.5(b) indicates that schedule 3A public entities may
only enter into a finance lease with the Minister of Finance as a functionary.
Regarding the photocopiers leased by the museum, proof of compliance with this
regulation could not be submitted for audit purposes.
6. APPRECIATION
The assistance rendered by the staff of the War Museum of the Boer Republics during the audit is sincerely appreciated.
B J K van Niekerk for Auditor-General
Bloemfontein
28 July 2006
AUDITOR-GENERAL