ATC100917: Report on Auditor General on the 2008/09 financial statements of the Government Printing Works

Public Accounts (SCOPA)

Eleventh Report of the Standing Committee on Public Accounts on the Report of the Auditor General on the 2008/09 financial statements of the Government Printing Works, dated 25 August 2010

 

1. Introduction

 

The Standing Committee on Public Accounts (the Committee) heard evidence on and considered evidence on the Annual Report and the Report of the Auditor-General on the 2008/09 financial statements of the Government Printing Works (GPW). The Committee noted the qualified audit opinion, highlighted areas which required the urgent attention of the Accounting Officer, and reports as follows:

 

2. Inventory

The Auditor General reported the following:

a)       “Inventories state that the cost of inventories shall comprise all costs of purchase, conversion and other costs incurred in bringing the inventory to their present location and condition.

b)       A status report generated on the non-integrated stock system includes job tickets amounting to R2.784 million (2008: R4.278 million) which had not been properly allocated and included in the financial system. The GPW could not provide sufficient and appropriate audit evidence to confirm the accuracy of the applicable balances and accounts”.

 

  The Committee recommends that the Accounting Officer ensures that:

a)       Control activities are regularly evaluated to guarantee  that they are appropriate and working as intended;

b)       Reports are updated timeously when the job is completed to avoid delayed invoicing; and

c)       Explanations are provided by management for all the jobs that are still showing their status as work-in-progress.

 

 

 

 

3. Accounts payable

 

The Auditor-General reported the following:

a)       “The Accounting Officer did not ensure that amounts included in the suspense accounts relating to payments received from debtors, were cleared and correctly allocated to the relevant debtor accounts on a monthly basis as required by Section 17.1.2 (b) of the Treasury Regulations. The balances for these accounts amounted to R22.383 million (2008: R16.620 million) at year-end.

b)       The goods received control account included long-outstanding amounts totalling R4.080 million (2008: R8.991 million).These amounts had accumulated as from 2005/06. Had these amounts been properly accounted for, payables would have decreased by R4.080 million (2008: R8.991 million), expenses decreased by R3.723 million and accumulated reserves increased by R357 million”.

 

The Committee recommends that the Accounting Officer ensures that:

a) The implementation of policies and procedures to guarantee the clearance of suspense accounts to their relevant cost centres on a monthly basis takes place; and

b) GPW improves its capacity in the creditors section by permanently designating employees who must perform monthly reconciliations of the suspense accounts in line with Section 17.1.2 (b) of the Treasury Regulations.

 

4. Governance Issues

 

The Auditor-General reported the following:

a) “The Internal audit unit of GPW did not have sufficient resources during the year and therefore the internal audit scope was very limited.

b) This limitation also resulted in the Audit Committee not being able to fully comply with the Audit Committee’s requirements, such as the approval of an annual internal audit plan and the oversight of matters reported by the internal audit unit”.

 

The Committee recommends that the Accounting Officer ensures that:

The functioning of the internal audit unit is strengthened, amongst other things, by providing appropriately high level reports to the relevant Executive Authority on a regular basis. Such reports must, as a minimum requirement, express a view on all internal control risks.

 

5. Further Recommendations

 

The Committee recommends that the GPW Audit Committee develops an annual audit plan to address matters raised by the internal audit unit.

 

6. Conclusion

 

The Committee further recommends that the Executive Authority should submit a progress report on the implementation all the recommendations to the National Assembly within 60 days after the adoption of this report by the House.

 

                                                                                                

Report to be considered.