1. PFMA audit outcomes 2009-10 Portfolio – Minister of Police

2. Reputation promise
The Auditor-General of South Africa has a constitutional mandate and, as the Supreme Audit Institution (SAI) of South Africa, it exists to strengthen our country’s democracy by enabling oversight, accountability and governance in the public sector through auditing, thereby building public confidence.

3. Minister of Police – PFMA audit outcomes 2009-10
Summary of audit outcomes
Audit outcomes
Departments
Public Entities
Opinion on financial statements:
Disclaimer - 1
Adverse
Qualified
Financially unqualified with findings on predetermined objectives and/or compliance with laws
and regulations 2
Financially unqualified with no findings on predetermined objectives or compliance with laws
Total number of audits reported on
Predetermined objectives
Compliance with laws and regulations
1. Compliance with laws and regulations
PSIRA and ICD had findings on compliance with laws and regulations
2. The five year outcomes are reflected below;
Auditee
2005/2006
2006/2007
2007/2008
2008/2009
2009/2010
Audit Opinion
DoP
Unqualified
ICD
Disclaimer
Qualified
PSIRA *
Qualification
* Note 1: PSIRA was audited by AGSA for the first time 2008/09

4. Minister of Police – PFMA audit outcomes 2009-10
Drivers to improve audit outcomes
Leadership
Audit
Oversight responsibility
Tone at the top
Action to mitigate risks
Improvements noted
Improvements required
DoP X  X
ICD
PSIRA
Percentage
100% 0%
33%
Oversight responsibility:
Oversight to ensure accurate, valid and complete reported performance information, requires improvement at all 3 auditees.

5. Minister of Police – PFMA audit outcomes 2009-10
Drivers to improve audit outcomes
Financial and performance management
Audit
Quality reliable AFS
Proper record keeping
Adequate systems
Improvements noted
Improvements required
DoP  X X
ICD
PSIRA

6. Minister of Police – PFMA audit outcomes 2009-10
Drivers to improve audit outcomes Governance
Audit
Risk identification
Fraud Prevention
Internal audit
Audit Committees
Improve -ments noted
Improve-ments required
Improve-ments noted
DoP X
X    X
ICD
  X
PSIRA

7. Minister of Police - PFMA audit outcomes 2009-10
Financial statement qualification areas
PSIRA:
Due to the Ministers commitment and intervention,PSIRA managed to resolve all 2008/09 qualifications except for VAT.
The ultimate outcome of a VAT audit by SARS on the final deregistration could not be determined. Hence sufficient & appropriate audit evidence could not be obtained with regard to the existence, valuation, allocation & completeness of the VAT liability.
As a result of the change in leadership commitment and guidance, ICD – Progressed from qualified to unqualified in 2009/10

8. Minister of Police– PFMA audit outcomes 2009-10
Material misstatements corrected (ICD and PSIRA)
Audit
Assets
Liabilities
Income
Expenditure
Irregular Expenditure
Disclosure
ICD x
PSIRA

9. Minister of Police – PFMA audit outcomes 2009-10
Findings on reporting of predetermined objectives
Category of finding
Departments
Public Entity
Non-compliance with regulatory requirements 2 1 -
Reported information did not meet criteria
Reported information not reliable
Source information not submitted
The report of predetermined objectives was not submitted for audit on 31st May 2010
Total number of audits with findings
Audit
DoP
ICD
PSIRA
Non-compliance with regulatory requirements x   x
Reported information did not meet criteria - x
Reported information not reliable
Source information not submitted
The report of predetermined objectives was not submitted for audit on 31st May 2010 - 
Total number of audits reported on 1 9 9

10. Minister of Police – PFMA audit outcomes 2009-10
An extract from the audit reports - No supporting source documentation
Finding
DOP
Programme 2 – the number of escapes from police custody. The completeness of the reported target could not be established, as not all supporting source documentation (notifications forms) could be provided for audit purposes
Programme 3 – percentage of organised crime related cases referred to court (% organised crime project investigations [OCPI] successfully terminated) and conviction rate. The validity, accuracy and completeness of the reported indicator could not be established as relevant source documentation (CAS printouts) could not be provided for audit purpose .
ICD
Sufficient appropriate audit evidence in relation to the actual reported achievement of Programme 2 (Investigation of Complaints) could not be obtained. There were also no satisfactory audit procedures that I could performs to obtain the required assurance as to the validity, accuracy and completeness of the reported information

11. Minister of Police – PFMA audit outcomes 2009-10
An extract from the audit reports – Reliability of reported performance information
Finding
PSIRA
The particulars of the PSIRA’s strategic objectives and outcomes under the registration subprogram as identified and agreed on by the executive authority in the strategic plan, were not reported in the annual performance report

12. Minister of Police – PFMA audit outcomes 2009-10
An extract from the audit reports – Completeness of reported targets could not be verified
Finding
DoP
Programme 2: Visible policing – police action conducted to prevent contact and property-related crimes and crimes dependent on police action for detection. The operation planning administration system (OPAM) is utilized for reporting on recoveries of cannabis. The source documentation (SAPS 13 register) used to update (support) this system is not sufficient to determine completeness of this indicator

13. Minister of Police– PFMA audit outcomes 2009-10
Findings on compliance with laws and regulations (PSIRA/ICD)
Finding
Percentage
Lack of an efficient,, effective and transparent system of financial and risk management and internal control including an approved fraud prevention plan. 2
67%
Lack of a proper system for properly evaluating all major capital projects prior to a final decision on the project ,collecting all revenue due and mechanisms in place to prevent fruitless & wasteful expenditure. 1
33%
The final strategic plan and the projection of revenue and expenditure for the financial year were not submitted to the executive authority at least one month before the start of the financial year.
There was no audit committee in operation throughout the year
The entity accumulated surpluses without formal approval from the National Treasury
Non-adherence to requirement - the accounting officer did not report the particulars of irregular expenditure discovered to the National Treasury
Audit
DoP
ICD
PSIRA
Lack of effective efficient systems - x
Lack of a system to evaluate capital projects
Non submission of strategic plan and budget
Audit Committee
Accumulated surpluses
Reporting of irregular expenditure to National Treasury

14. Minister of Police – PFMA audit outcomes 2009-10
Findings on procurement and contract management resulting in irregular expenditure
Findings
Number
Amount ®
1. Three price quotations not invited – neither the reasons there for recorded or approved. 1
33%
2. Three price quotations not invited ; reasons for deviation not justified .
3. There were no prospective supplier list in existence.
4. Deviation from competitive bidding not justified 2
67%
5. There were neither processes for SCM officials to report breaches / non compliance nor were the SCM officials aware of the processes.
6. The SCM officials were not adequately trained
7. No risk assessment was conducted on procurement / contract management during the year.
DoP
ICD
PSIRA
1. Three quotations not invited – reasons not recorded - x
2. Three quotations not invited – reasons not justified
3. No supplier list
4. Deviation from bidding process not justified
5. Neither processes for SCM officials/ nor SCM officials aware of processes
6. SCM officials not adequately trained
7. No risk assessment 14 14

15. Minister of Police – PFMA audit outcomes 2009-10
Fruitless and irregular expenditure
Audit
Fruiteless expenditre
Irregular expenditure
Disclosed in May AFS
Additional expenditure identified during the audit
Disclosed in 31 May 2010 AFS
R’000
DOP
1,127,000 -
3 399,000
ICD
14,000
145,810
PSIRA
3,575,660
Total 
3,413,000
3,721,470