Eighth Report of
the Standing Committee on Public Accounts on the Report of the Auditor-General
on the 2008/09 financial statements of the
Department of Correctional Services, dated 24 August 2010
The Standing Committee on Public Accounts
(the Committee) heard evidence on and considered the contents of the Annual
Report and the Report of the Auditor-General on the 2008/09 financial
statements of the Department of Correctional Services (the Department). The
Committee noted the qualified audit opinion, highlighted areas which required
the urgent attention of the Accounting Officer, and reports as follows:
The Auditor-General
reported the following:
1.1 On the Audit Committee
a)
The
Audit Committee has not fulfilled its responsibilities for the year as set out
in Section 77 of the Public Finance Management Act (No.1 of 1999) and Section
3.1.10. of the Treasury Regulations.
b)
The
internal audit unit did not fulfill its responsibilities for the year as set
out in the Treasury Regulations number 3.2.
c)
There
were significant deficiencies in the design and implementation of internal
control and risk management.
The Committee recommends that the
Accounting Officer ensures that:
a)
The Audit
Committee and internal audit unit are adequately staffed and function properly;
and
b)
The
Department implements appropriate internal control and risk management measures.
1.2 On Asset
Management
a)
Assets are counted annually and exceptions are not
followed up timeously.
b)
Documentation relating to assets were not readily
available for examination.
c)
The control activities surrounding the control of
assets are in place but they are not applied appropriately.
d)
Assets captured on LOGIS resulted in information not
being available on a timely basis to allow effective monitoring of events,
activities and transactions to allow prompt reaction.
e)
Assets recorded on the financial systems were not
reconciled to the fixed asset register.
f)
Data recorded by the information and financial systems
was not compared with physical assets/stock and discrepancies exist.
g)
Management does have a strategy in place to ensure
that ongoing monitoring is effective but this is not being applied effectively
with regards to asset management.
The Committee recommends
that the Accounting Officer ensures that:
The
Department develops and implements a monitoring strategy that will address
matters related to proper counting, verification, recording and documentation
of assets as provided for in Section 10.1.1 of the National Treasury Regulations.
The Auditor-General
identified the following shortcomings:
a)
The Department had a high vacancy rate in critical
occupations, e.g. nurses (25.4%), pharmacists (44.4%), medical practitioners
(20%), finance and economics related professionals (26.1%), financial &
related posts (47%) and information technology (66.7%).
b)
Inadequate training of personnel.
c)
The Human Resource (HR) plan has not been updated with
the projected information for the 2008-09 financial year. The HR plan
provided only reflects projected information for the 2006-07 financial
year, resulting in the department not complying with chapter 1, part 3,
paragraph D1(c), of the Public Service Regulations (PSR).
The Committee
recommends that the Accounting Officer ensures that:
a)
A comprehensive human resource strategy is developed
that will attract, retain and address the remuneration of skilled professionals
in critical occupations in order to ensure that the Department carries out its
mandate successfully;
b)
The training resources available within the public
service are adequately utilised at all levels.
c)
The Public Administration Leadership and Management
Academy (PALAMA) is speedily engaged to ascertain the training requirements
within the Department.
d)
A comprehensive HR plan is developed annually as
required by the Public Services Regulations.
The Auditor-General
identified the following shortcomings:
a)
No proper reconciliations were performed between WAT
and LOGIS systems to ensure that all assets are captured.
b)
Lack of independent reviews by management caused
shortcomings in internal controls.
c)
Inadequate policies and procedure manuals have resulted
in incomprehensive business processes.
The Committee
recommends that the Accounting Officer ensures that:
a)
There is continuous performance monitoring and
reconciliation between WAT & LOGIS systems to ensure that all assets are
captured.
b)
Policies and procedures are developed and implemented
to ensure the adequacy of business processes.
The Auditor-General
identified the following:
The Department incurred
unauthorised expenditure amounting to R483 million as a result of implementing
the Public Service Co-ordinating Bargaining Council (PSCBC) resolution no 1 of
2007 on the improvement of salaries and other conditions of service for the
financial years 2007/08 to 2010/11.
The Committee recommends that the Accounting
Officer ensures that:
The Department
properly budgets for its salary increments and other conditions of service in line with the PFMA.
The
Committee is alarmed by the Department’s poor financial planning as it noted
during the hearing. The hearing revealed that the Department had budgeted R 297
million for payment of overtime work but ended up paying R1.2 billion to
balance its overtime bill. Therefore, the Committee recommends that the
Accounting Officer ensures proper financial planning to avoid such occurrences.
The
Committee is of the view that there was value-for-money for the Department when
it was utilising the services of the Special Investigative Unit (SIU) in
rooting out corruption in the Department. Therefore, the Committee recommends
that the services of the SIU be continuously utilised by the Department to
follow up on any occurrences of corruption within the Department.
The
Committee has noted the recurring qualification on assets since the 2005/06
financial year, and it is for this reason that it calls for an urgent progress
report from the Department to outline the steps taken to correct this
situation.
The
Committee further recommends that the Executive Authority should submit a
progress report on all the recommendations to the National Assembly within 60
days after the adoption of this report by the House.
Report to be considered