NATIONAL PUBLIC ENTITIES FINANCIAL STATEMENTS TEMPLATE TRAINING NATIONAL TREASURY Presenter: Mr....

NATIONAL PUBLIC ENTITIESFINANCIAL STATEMENTS TEMPLATE

TRAININGNATIONAL TREASURY

Presenter: Mr. John Watson, Director AS&R | 7 MARCH 2014

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Program

1. 2014 PE Consolidation Process

2. 2014 AFS Template

3. Submission Deadlines

4. GRAP update

5. Year End Procedures 2013/14

6. Accounting Support during 2013/14 audit process

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2014 PE Consolidation Process

If we understand the WHY it will help us with the WHO,

WHAT, HOW, WHEN and WHERE.

• PFMA Section 8

• GRAP 6, 7 & 8

• Auditor-General of South Africa

• Transparency

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2014 PE Consolidation Process

TRANSPARENCY- Standard policies, understandable to users. SPO analysis on capital and financing position and expenditure

COMPARABILITY- Convergence of accounting policies, useful to users

ACCOUNTABILITY- Independent audit, scrutiny by Parliament and public

COMPLETENESS- Consolidates all similar data, complete analysis to users

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2014 Public Entity Consolidation Process

• NT responsible for identifying entities to be included

• PFMA listed entities and unlisted entities

• Only institutions applying the accrual basis of accounting

• Consolidated Financial Statements in terms of GRAP

• Financial statements of each entity within the group

– combined on a line by line basis

– adding like items of assets, liabilities, net assets, revenue and expenses

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BIG changes for 2014

1. AFS Template is based on 2013 but updated and enhanced

2. Inter-entity for current year and prior year

3. New conversion journals for current year and prior year

4. New Management sign-off template

5. New External Audit sign-off template

6. New requirements for entities with 30 June year end

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1. AFS Template is based on 2013 but updated and enhanced

– Aligned to published consol annual report for 2013

– Must enable macros or it will not work

– Improved verification (red cells)

– Includes new worksheets on

• Inter-entity

• Conversion

• Uncorrected misstatements

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2. Inter-entity for current year and prior year

– Why? GRAP requirement (GRAP 6.46)

– Not the same as related parties

– Includes prior period to have accurate comparatives

– Entities should implement system to track transactions

– Make use of supplier database / customer database

– Share your information with other entities

– Tested by external auditors

– Different entities list for provinces (arranged with PAGs)

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3. New conversion journals for current year and prior year


– Aligns entity’s normal AFS to Group Accounting Policies

– Identify difference in accounting policy > journal entries

– Journal per line items in the SCOA

– If final AFS figures change > update your journal entries

– NT will pass journals on final consolidation

– Tested by external auditors

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4. New Management sign-off template

– Why? PFMA requirement – 40(1)(b) / 55(1)(b)

– Confirmation of compliance with NT instructions

– Inter-entity complete, valid and accurate

– Conversion journals complete, valid and accurate

– Unadjusted audit misstatements recorded

– External audit has tested the AFS template

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5. New External Audit sign-off template

– Why? Do not need full audit opinion for consol purposes

– Document discussed with AG and big 4 firms

– Testing whether AFS template agrees to normal AFS

– Testing inter-entity and testing conversion journals

– Confirming unadjusted audit differences (misstatements)

– Sign-off submitted to management of entity

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6. New requirements for entities with 30 June year end


– TB for 31 March 2014 (3 months + 9 months)

– Management accounts OR financial statements for 12 months ended 31 March 2014 based on above trial balance

– Material entities will be requested to obtain additional audit assurance on the management accounts / financial statements for 12 months. A separate communication to this effect will be sent out to these entities.

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2014 AFS Template

Before you start working on your template know the following:

1. Template is 32bit

2. Must read the instructions and do things in right order

3. Workbook and worksheets are locked

4. Do not delete rows or columns or highlight cells

5. Fill in as much information as possible in the yellow cells

6. Remember to save your work

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2014 AFS Template

Initial Questionnaire and Instructions

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2014 AFS Template

Income & Expenditure Mapping

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2014 AFS Template

Assets Mapping

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2014 AFS Template

Liabilities Mapping

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2014 AFS Template

Net Assets Mapping

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2014 AFS Template

SCOA

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2014 AFS Template

Calculation Sheets

1. CALC SHEET – NON-CURRENT ASSETS 2. CALC SHEET – CURRENT ASSETS

- Property, Plant and Equipment- Intangible Assets- Biological Assets- Investment Property (Cost/Fair Value)- Heritage Assets- Non-Current Receivables- Non-Current Investments

- Trade and Other Receivables – Exchange- Cash and Bank- Inventories- Pre-Payments- Receivables from Non-Exchange Transactions- Finance Lease Receivables- Construction Contract Debtors

3. CALC SHEET – LIABILITIES 4. CALC SHEET – EXCHANGE RECEIVABLES

- Trade and Other Payables – Exchange- Finance Lease Obligations- Employee Benefits- Provisions- Long Term Borrowings

- Exchange receivables

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2014 AFS Template

Notes to the financial statements

1. Populated by SCOA and Calculation sheet amounts

2. Some note numbers have changed after alignment process

3. Complete all relevant yellow highlight areas

4. Check if note agrees to POS, PER, CFS or NA

5. Blue help button is there if need assistance

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2014 AFS Template

Statement of Financial Position

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2014 AFS Template

Statement of Financial Performance

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2014 AFS Template

Statement of Changes in Net Assets

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2014 AFS Template

Cash Flow Statement

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2014 AFS Template

Inter-Entity

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2014 AFS Template

Conversion Journals

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2014 AFS Template

Uncorrected Misstatements

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Submission deadlines

31 MAY 2014No. Document name Hard Copy Soft Copy (Electronic

on CD) Due Date

1. GRAP AFS Template

Printout of the following signed by management: Statement of Financial Position Statement of Financial Performance Statement of Cash Flows Statement of Changes in Net Assets

MS Excel 30 May 2014

2. Inter-entity template Printout signed by management MS Excel (Part of AFS Template) 30 May 2014

3. Conversion journals Printout signed by management MS Excel (Part of AFS Template) 30 May 2014

4.

Annexure 7 - Remuneration of executive and non-executive management

Printout signed by management MS Excel (Not MS Word) 30 May 2014

5. Certified AFS submitted for external audit

Printout of complete document signed by management MS Excel preferably 30 May 2014

6.

Entities with different year ends – 12 months management accounts / financial statements

Printout of complete document signed by management MS Excel (Not MS Word) 30 May 2014

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Submission deadlines

31 JULY 2014No. Document name Hard Copy Soft Copy (Electronic

on CD) Due Date

1. Annexure C – Management Confirmation Signed original Scanned document

(PDF) 31 July 2014

2. FINAL GRAP AFS Template

Printout of the following signed by management: Statement of Financial Position Statement of Financial Performance Statement of Cash Flows Statement of Changes in Net Assets

MS Excel 31 July 2014

3. FINAL Inter-entity template Printout signed by management MS Excel (Part of AFS Template) 31 July 2014

4. FINAL Conversion journals Printout signed by management MS Excel (Part of AFS Template) 31 July 2014

5. FINAL Uncorrected Misstatements Printout signed by management MS Excel (Part of AFS Template) 31 July 2014

6. FINAL Audited annual financial statements

Printout of complete document signed by management MS Excel preferably 31 July 2014

7.

Entities with different year ends – FINAL 12 months management accounts / financial statements (audited for some entities)

Printout of complete document signed by management MS Excel (Not MS Word) 31 July 2014

8. Annexure D – External Audit signoff on AFS Template Copy of signed original Scanned document

(PDF) 31 July 2014

9. External auditor’s audit report on normal annual financial statements Copy of signed original Scanned document

(PDF) 31 July 2014

Year End Procedure 2013/14

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• To be issued before 31 March 2014

• Purpose is to remind:

– Accounting Officers (AO) and Accounting Authorities (AA) of important financial year end procedures and closure/submission dates relating to the preparation and auditing of AFS and preparation of Annual Reports (AR).

– AA of entities with a financial year end other than 31 March of important financial year end procedures and submission dates relating to preparation and auditing of AFS and preparation of AR.


Annual Report Submission DatesAction PFMA Date Responsibility

Reporting date 55(1)(b) 31/03 Accounting Authority (AA) / Accounting Officer (AO)

Submit approved financial statements and report of the accounting officer to relevant treasury and Auditor-General for Auditing

55(1)(c)(i) & (ii) 30/05 ( final date)(Within 2 months after year-end)

AA / AO

Submission of audited financial statements

As per the MCS 31/07 AA / AO

Submission of annual report, annual financial statements and audit report to relevant treasury and the executive authority responsible for the public entity.

55(1)(d) 29/08(Within 5 months after year-end)

AA / AO

Executive authority to table in National Assembly or provincial legislature

65(1)(a) Within one month after the AA received the audit report

Minister / MEC


Due date for submission to:

OAG ALM (if applicable)

Unaudited financials Copies:

30/05/2014

1

30/05/2014

1

Audited financials Copies:

31/07/2014

1

31/07/2014

1

Annual ReportsCopies:

29/08/2014

3

13/06/2014

1

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Confirmation Letters:• Submission of AFS

– Accounting Authority (AA) / Accounting Officer (AO) accepts responsibility for the accuracy & fair presentation of the AFS submitted to AG & relevant treasury

• Submission of Annual Report incl. Performance Information– AA/AO accepts responsibility for the accuracy & fair

presentation of the AFS & PI submitted to AG & relevant treasury

– AGSA will review the contents of the AFS for consistency

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Performance Information to Auditors:• The performance information in the annual report

– Needs to be submitted for audit purposes on 30 May 2014

– External Auditor’s PFMA deadline is 31 July 2014.

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GRAP Update

REPORTING FRAMEWORK AT A GLANCE (DIRECTIVE 5)

2011/2012 2012/2013 2013/2014

Improved Standards of GRAP & IGRAPs

New Standards that became effective:GRAP 21, 23, 24, 26, 103 and 104

New Standards become effective:

GRAP 25: Employee Benefits

Early Adopt• GRAP 21, 23, 24, 26,

103

Accounting Policy:• GRAP 25, 104 – 107

Accounting Policy:GRAP 25, 105 – 107

Accounting Policy:• GRAP 25, 105 – 107

GRAP Update

Nature of difference IAS 19 GRAP 25 Impact

Actuarial gains and losses

Allows the deferral of actuarial gains and losses using the “corridor method”

Requires full recognition of actuarial gains and losses in surplus or deficit in the year they occur

No longer an option available on recognition of actuarial gains and losses, everything is recognised immediately in surplus or deficit when they occur

Past service costs

Requires the recognition of past service cost on a straight-line basis over their vesting period, in surplus or deficit

Requires full recognition of past service cost in the year they arise

No more deferral of service cost over the vesting period, everything is recognised immediately in surplus or deficit when they arise

Discount rate used to measure the defined benefit liability

The discount rate is determined by reference to yields on high-quality corporate bonds

Requires that the discount rate be determined by reference to yields on government bonds

Use government bond rates

Employee Benefits previously accounted for in terms of IAS 19 however since 1 April 2013 required to account for in terms of GRAP 25, unless early adopted.

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Accounting Support during 2013/14 audit process

Name of OAG representative within NT Province Cluster

Star Kafu

Telephone: 012 315 5794

Email: [email protected]

KZN & NW Justice

Thomas Matjeni

Telephone:012 315 5792


GP Social Services

John Watson

Telephone: 012 315-5590


NC & FS Economic Services

Keitumetse Malebye

Telephone: 012 315 5989/5281


EC & MP Finance & Admin

Thokozile Motsweni

Telephone : 012 315 5233

[email protected]

WC Central Government

Lizette Labuschagne

Telephone : 012 315 5781

[email protected]

LP NRF

mailto:[email protected]






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