REPORT OF THE AUDITOR GENERAL TO PARLIAMENT ON
THE FINANCIAL STATEMENTS AND PERFORMANCE: INFORMATION OF VOTE NO. 9 Department
OF PUBLIC ENTERPRISES FOR THE YEAR ENDED 31 MARCH 2007
Report on the financial statements
Introduction
1. I have audited the accompanying financial statements of the Department of
Public Enterprises which comprise the statement of financial position as at 31
March 2007, appropriation statement, statement of financial performance,
statement of changes in net assets and cash flow statement for the year then
ended, and a summary of significant accounting policies and other explanatory
notes, as set out on pages 58 to 93.
Responsibility of the accounting officer for the financial
statements
2. The accounting officer is responsible for the preparation and fair
presentation of these financial statements in accordance with the modified cash
basis of accounting and in the manner required by the Public Finance Management
Act, 1999 (Act No. 1 of 1999) (PFMA). This responsibility includes:
·
designing,
implementing and maintaining internal control relevant to the preparation and
fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error selecting and applying appropriate
accounting policies making accounting estimates that are reasonable in the
circumstances.
Responsibility of the
Auditor-General
3. As required by section 188 of the Constitution
of the Republic of South Africa, 1996 read with section 4 of the Public Audit
Act, 2004 (Act No. 25 of 2004), my responsibility is to express an opinion on
these financial statements based on my audit.
4. I conducted my audit in accordance with the International Standards on
Auditing and General Notice 647 of 2007, issued in Government Gazette No. 29919
of 25 May 2007. Those standards require that I comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance whether the
financial statements are free from material misstatement.
5. An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the financial statements. The procedures selected
depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair
presentation of the financial statements in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control.
6. An audit also includes evaluating the:
·
appropriateness of accounting policies
used
·
reasonableness of accounting estimates
made by management
·
overall
presentation of the financial statements.
7. I believe that the audit evidence I have
obtained is sufficient and appropriate to provide a basis for my audit opinion.
Basis of accounting
8. The department’s policy is to prepare financial statements on the
modified cash basis of accounting determined by the National Treasury, as set
out in accounting policy note 1.1 to the financial statements.
Opinion
9. In my opinion the financial statements present fairly, in all
material respects, the financial position of the Department of Public
Enterprises as at 31 March 2007 and its financial performance and cash flows
for the year then ended, in accordance with the modified cash basis and in the
manner required by the PFMA.
Other matters
I draw attention to the following matters that are ancilliary to my responsibilities in the audit of the
financial statements:
10. Delay in finalisation of audit
Due to the national public sector strike action during June 2007 the
Auditor-General had to delay the finalisation of affected departments. As a
result, the Auditor-General’s consistency review process of the audit reports
could only be conducted subsequent to 31 July 2007, the consequence of which
was a delay in the finalisation of the audit of this department for the 2008/07
financial year.
Other reporting responsibilities
Reporting on performance
information
11. I have audited the performance information as set out on pages 27 to 34.
Responsibilities of the accounting officer
11. The accounting officer has additional responsibilities as required
by section 40(3)(a) of the PFMA to ensure that the
annual report and audited financial statements fairly present the performance
against predetermined objectives of the department.
Responsibility of the Auditor-General
12. I conducted my engagement in accordance with section 13 of the
Public Audit Act, 2004 (Act No. 25 of 2004) read with General Notice 646 of
2007, issued in Government Gazette No. 29919 of 25 May 2007.
13. In terms of the foregoing my engagement included performing procedures of
an audit nature to obtain sufficient appropriate evidence about the performance
information and related systems, processes and procedures. The procedures
selected depend on the auditor’s judgement.
14. I believe that the evidence I have obtained is sufficient and appropriate
to provide a basis for the audit findings reported below.
Audit findings
15. Nothing to report.
Appreciation
16. The assistance rendered by the staff of
the Department of Public Enterprises during the audit is sincerely appreciated.
GO Randall
Business Executive: National B
10 August 2007