REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON THE
FINANCIAL STATEMENTS AND PERFORMANCE INFORMATION OF THE NATIONAL MUSEUM FOR THE
YEAR ENDED 31 MARCH 2007
REPORT ON THE FINANCIAL STATEMENTS Introduction
1. I have audited the accompanying financial statements of the National
Museum which comprise the statement of financial position as at 31 March 2007,
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 33 to 56.
Responsibility of the accounting authority for the financial statements
2. The accounting authority is responsible for the preparation and fair
presentation of these financial statements in accordance with the basis of
accounting determined by the National Treasury, as set out in accounting policy
note 1.1 and in the manner required by the Public Finance Management Act, 1999
(Act No. 1 of 1999) (PFMA) and the Cultural Institutions Act, 1998 (Act No. 119
of 1998). 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 645 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 museum's policy is to prepare financial statements on the basis of
accounting determined by the National Treasury, as set out in 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 National Museum as at 31 March 2007 and
its financial performance and cash flows for the year then ended, in accordance
with the basis of accounting determined by the National Treasury of South
Africa, as set out in note 1.1 to the financial statements, and in the manner
required by the PFMA.
Emphasis of matters
I draw attention to the following matters: 10. Going concern
The museum's liabilities exceeded its assets by R8 566 000 at year-end. This
matter was also reported in the previous audit report. It was furthermore noted
that the museum realised a net deficit for the year under review. This resulted
from the museum's retirement benefit obligations, as outlined in note 27 to the
financial statements.
11. Basis of accounting (departures and deviations)
Contrary to the requirements of paragraph 50 of South African Statements of
Generally Accepted Accounting Practice, IAS 16 (AC 123), Property, Plant and
Equipment, the museum adopted a policy to write off all assets with a cost of
less than R5 000 in the year it was purchased. Management deviated from this
policy as to ensure fair representation in the financial statements.
OTHER MA TIERS
I draw attention to the following matters that are ancillary to my
responsibilities in the audit of the financial statements:
12. Material non-compliance with applicable legislation Contrary to Treasury
Regulation 16A3.1, the museum has not developed and implemented a supply chain
management system. Cognisance is taken of the steps taken by management in
developing such a policy.
13. Material corrections made to the financial statements submitted for audit
The following corrections were made to the financial statements:
(i) Disclosure of the total remuneration of the chief financial officer - R252
000
(ii) Correction of fully depreciated vehicles - R278 234 (iii) Reclassification
of provisions - R1 858000
(iv) Correction of assets incorrectly written off - R190 801
OTHER REPORTING RESPONSIBILITIES
Reporting on performance information
14. I have audited the performance information as set out on pages 26 to
28. Responsibility of the accounting authority
15. The accounting authority has additional responsibilities as required by
section
55(2)(a) of the PFMA to ensure that the annual report and audited financial
statements fairly present the performance against predetermined objectives of
the public entity.
Responsibility of the Auditor-General
16. I conducted my engagement in accordance with section 13 of the Public
Audit Act, 2004 (Act No. 25 of 2004) read with General Notices 645 and
646 of 2007, issued in Government Gazette No. 29919 of 25
May 2007.
17. In terms of the foregoing my engagement included performing procedures
of an audit nature to obtain sufficient appropriate audit evidence about the
performance information and related systems, processes and procedures. The procedures
selected depend on the auditor's judgement.
18. I believe that the evidence I have obtained is sufficient and appropriate
to provide a basis for the audit findings reported below.
Audit findings
19. Contrary to the requirements of section 55(2)(a) of the PFMA, the
museum did not report on the performance against all the predetermined
objectives as per the strategic plan. Certain predetermined objectives were not
reported on due to the fact that these were not relevant at the reporting date.
This was due to the submission of the strategic plan before the commencement of
the current financial year and the finalisation of the previous year's audit.
20. It was furthermore noted that policies and procedures followed by the
museum with regard to the reporting on performance information were not
formally documented and approved.
APPRECIATION
21. The assistance rendered by the staff of the National Museum during the
audit is sincerely appreciated.
B J K van Niekerk for Auditor-General
Bloemfontein
31 July 2007
AUDITOR-GENERAL