MANAGEMENT ACTION PLAN TO ADDRESS AUDIT FINDINGS … · Policy Tracking register. Commitments...
Transcript of MANAGEMENT ACTION PLAN TO ADDRESS AUDIT FINDINGS … · Policy Tracking register. Commitments...
MANAGEMENT ACTION PLAN TO ADDRESS AUDIT FINDINGS
MANABELA CHAUKE, DIRECTOR
Overview
1. Historical Audit Information
2. Key Achievements
3. Key Controls implemented
4. 2016/17 Audit report
5. Action Plan
5.1 Annual Financial Statement
5.2 Predetermined Objectives
6. Towards clean audit
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1. Historical Audit Information
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DETAILS 2012/13 2013/14 2014/15 2015/16 2016/17
Audit Opinion Qualified Unqualified Unqualified Unqualified Unqualified
Significant uncertainties SIA Law suits
SIA Law
suits SIA Law suits
Law suits &
Demolition
cost
Law suits &
Demolition
cost
Going Concern Yes Yes Yes No No
Material losses Yes Yes Yes No No
Material impairments Yes Yes Yes Yes Yes
Restatements of corresponding figures Yes Yes Yes Yes No
Pre- determined objectives
Law Enforcement SMART No No No No
CRM and Training SMART No
Usefulness &
Reliability Reliability Reliability
Irregular Expenditure Yes Yes Yes No No
Fruitless and Wasteful Expenditure Yes Yes Yes Yes Yes
IRREGULAR AND FRUITLESS EXPENDITURE
REPORT ON LEGAL AND REGULATORY REQUIREMENTS
REPORT ON FINANCIAL STATEMENTS
Emphasis of matter
2. Key Achievements
• Unmodified Audit opinion (Clean Financial Statement)
• Reduction of Material findings
• Irregular expenditure eliminated
• Implementation of Governance structure
• 85% of the planned targets achieved
• Fines increased to enhance compliance
• Reduced fruitless and wasteful expenditure
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3. Key Controls Implemented
• Risk Management and Combined Assurance model
• Risk based Audit plans
• Consequence management
• Document management system
• Implementation of Workplace Skills Plan
• Effective oversight structures
Council
Audit and Risk Committee
Internal Audit
Risk Management Committee (EXCO)
Operation Clean Audit Committee (Adhoc)
Stakeholder and Core Business Committee
Performance Management Committee
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2016/17 Audit
Report
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Emphasis of Matters
• Material Impairments
- Provision of impairments to the amount of
R44 389 024( 2016:R28 860 133) was raised
on trade debtors , as a result of uncertainty
regarding
• Significant uncertainties
- Law suits and Demolition costs for Arcadia
building.
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Additional Matters: Non-Compliance to Legislation
Adequate, effective and appropriate steps were not taken to
collect money as required by (section 51(1)(b)(i) of the PFMA
and Treasury Regulations.
Effective steps to prevent fruitless and wasteful expenditure not
fully effective.
Internal controls implemented not fully effective.
Lack of Document Management System.
Inadequate oversight role regarding performance information.
Proper controls were not implemented over daily and monthly
processing, reconciling and reporting of financial and
performance information.
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2016/17
ACTION PLAN
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Status of Action Plan
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Resolved 57%
Not Resolved 43%
Status of Action Plan
Resolved
Not Resolved
Annual Financial Statement
Responsible official :
Deputy Director Finance and
Administration
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Annual Financial Statements cont.…
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Action Plan: Matters affecting the Audit Target Date
Revenue Management
• Partner with State Attorney (through MOU) to give PSiRA
access to their platform for purposes of litigation through
PSiRA resources.
31 Jan 2018
• Capacitate the debt collection office (legal experts) to
strengthen soft collection process.
Done
• Automation and improvement of the debtors system (ERP
System)
April 2019
• Interest and penalties to be implemented in the next
financial year will be communicated during the 2017/18
Annual Fees review consultation.
01 April 2018
Annual Financial Statements cont.…
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Action Plan Target Date
Project plan has been developed and synchronised to ensure that
there is adequate time for quality assurance by oversight
structures.
Done
Monthly, Quarterly and Year end cut off procedures will be
intensified to ensure completeness and accuracy of financial
information.
Done
Implementation of Compliance checklist to enhance compliance to
legislation and standards i.e. PFMA, PSiRA Act, GRAP standards.
Done
Annual Financial Statements cont.…
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Action Plan Target
Date
Financial Management Capability Maturity Model (MCMM) and
Risk Maturity Model implemented to assess and improve
internal controls.
31 Jan 2018
Monthly and Quarterly exception report will be reviewed on a
regular basis.
Done
Annual Financial Statements cont.…
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Action Plan Target Date
Registers are monitored to enhance quality of AFS
Contract Register.
Policy Tracking register.
Commitments register
Deviation Register
Fruitless and wasteful register
Irregular Register
Done
Annual Financial Statements cont.…
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Action Plan Target Date
Recons are monitored to enhance quality of the AFS
Debtors recons
Creditors recons
Assets recons
Leave recons
Payroll recons
Suspense account (Clearing/Recon)
Done
Action Plan: Other Matters
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Action Plan Target Date
Assets management
• Capacitating Assets Management and Financial
Reporting.
30 Nov 2017
• Empower staff, regional managers on asset processes
and procedures to ensure that assets are accurately
accounted for.
30 Nov 2017
• Quarterly assets management report will be
implemented to monitor the movements of assets
both additions and disposal.
Done
• Half yearly assets verification will be conducted to
ensure that all assets are adequately accounted for.
In progress
Action Plan: Other Matters
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Action Plan Target Date
Supply Chain Management
• SCM policy to be reviewed regularly to ensure
alignment with the National Treasury instruction. 30 Nov 2016
• Register of all bids received is maintained.
• Bid Evaluation Committee verifies the bid closure
register prior to evaluation.
Done
Action Plan: Other Matters
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Action Plan Target Date
Accounts Payable
• Age Analysis will be reviewed on monthly basis and all
variances are explained and followed up.
Done
• Monthly and Quarterly review of line items to avoid
misallocation.
Done
• Verify budget availability prior to procurement to
ensure correct General Ledger (GL) account.
Done
PREDETERMINED
OBJECTIVES
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PREDETERMINED OBJECTIVES
Responsible official :
Deputy Director Communication,
Registration and Training
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Action Plan: Predetermined Objectives
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Action Plan Target Date
Registration
• Process re-engineering to effectively support record
management
• System configured to enable proper classification of
certificates
Done
• Weekly and monthly review of information captured on the
system for quality assurance purposes Done
• System configured to prevent renewal prior to 90 days
before expiry date
• Implementation of Document Management System
30 Nov 2017
• Quality review through pre-auditing of performance
information (Management Review, Internal audit and
AGSA interim audit to be conducted before year end)
30 Jan 2018
Action Plan: Predetermined Objectives
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Action Plan Target Date
Training
• Both KPI and technical indicator description reviewed and
realignment for 2017/18 financial year
Done
• Database of accredited providers secured from SASSETA
quarterly
• Accreditation letters secured quarterly from training
providers to support and validate the reported
information
Done
• On-going site inspections conducted to verify
accreditation information provided
Done
• Quality review through pre-auditing of performance
information (Management Review, Internal audit and
AGSA interim audit to be conducted before year end)
30 Jan 2018
PREDETERMINED OBJECTIVES
Responsible official :
Deputy Director Law Enforcement
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Action Plan: Predetermined Objectives
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Action Plan Target Date
Law Enforcement
• Data control technique will be deployed to ensure
completeness and accuracy of data disclosed.
Done
• Case Management system to be implemented to avoid
duplication.
Done
• Segregation of duties to enhance the review and
quality of reported information.
Done
• Electronic Enforcement compliant register
implemented, reviewed on monthly basis at all
offices.
Done
• Quality review through pre-auditing of compliant
register.
Done
COMMITMENT TO IMPROVE INTERNAL CONTROLS
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SECTION COMMITMENTS
Financial & Performance Management
• Maintain proper record keeping of all
transactions
• Maintain effective controls over daily and
monthly processing and reconciling of
transactions
• Maintain regular, accurate and complete
financial and performance reports.
• Implementation of adequate
record/document management system.
COMMITMENT TO IMPROVE INTERNAL CONTROLS
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SECTION COMMITMENTS
Financial & Performance Management
• Ensure adequate accountability to improve
performance.
• Ensure Performance Score card includes risk
management.
• Ensure compliance by utilising Compliance
checklist, for both legislation and standards i.e.
PFMA, PSiRA Act, GRAP standards
COMMITMENT TO IMPROVE INTERNAL CONTROLS
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SECTION COMMITMENTS
Governance • Review, identify and address risks to
ensure that they effectively mitigated.
• Maintain adequate resourced functioning
internal audit unit and effectively utilised the
unit to improve internal controls.
• Ensure accountability and service delivery.
• Provide support to assurance providers to
assists to improve status of internal controls.
Accounting Authority Commitment towards Clean Audit
Leadership Commitment
• Established additional governance structure (FINCO)
• Both FINCO and ARC review performance reports before
submission to Council
• Intensify the review and monitoring of the implementation of
the recruitment plan (REMCO)
• Policy tracking register to be monitored by ARC
• Council governance structures to monitor the implementation
plan of the audit action plan relevant to their terms of
reference
• Approve Risk based Audit Plan and Combined Assurance
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Tittle Goes here…
THANK YOU