1. IMFO CONFERENCE PRESENTER: CLAUDIA MAKWELA

2. OUTLINE Purpose Challenges Role played by IA Value add Treasury guides

3. To improve the integrity and quality of financial information reported in financial statements, in particular disclosure notes. To reduce errors that are picked up and rectified during audit process To address issues of operation clean audit PURPOSE 3

4. To improve audit outcome To prevent late submission of AFS PURPOSE 4

5. CHALLENGES A number of disclaimer opinion High number of qualified audit opinion Late submission of AFS Challenges on asset management Shortage of skilled personnel in finance Inability to address prior year issues raised by AG Material changes in the AFS 5

6. CHALLENGES Incomplete disclosure notes Incomplete audit file 6

7. CHALLENGES Housing loan guarantees still reflecting the old financial institutions (e.g. Saambou bank) Incomplete information on commitments and accrual Classification of leases is a big issue Adjustment column on assets note is populated with only balancing amounts – cannot be verified 7

8. KNOWLEDGE Knowing the institution’s operations, Make use of FMCMM Financial systems in use, Knowing the legislations governing it, Guidelines to draw budgets and AFS Guidelines to report performance information Continuous reading and commenting on draft documents e.g Employment Equity Plan

9. KNOWLEDGE NT and PT practice notes/instruction notes AFS Preparation guide Use of AFS template

10. ADDING VALUE Internal controls Review of action plan to address AG issues Review financial statements Make recommendations for improvements Share new developments by the IIA Share new developments from National and Provincial Treasury

11. ADDING VALUE –AFS Existence – audit during the year Completeness – e.g. revenue, debtors, expenditure etc. Correctness – capturing adjustment budget not original Tally – economic classification to budget

12. ADDING VALUE –AFS Disclosures - Commitments and accruals - Contingent liabilities - Lease commitments - Employee benefits Verifying totals and Check notes correspondence Interpretation of legislation

13. ADDING VALUE –AFS Disclosures – Irregular Expenditure – Fruitless and wasteful expenditure – Details thereof – Minor assets Inventory management

14. ADDING VALUE –PI Targets reported according to APP Alignment of targets and actual results e.g. Target – Prevent the spread of HIV Actual – Malaria reduced by 50% Audit evidence should be available

15. ADDING VALUE –PI Main criteriaSub-criteria 1. Compliance with reporting requirements Existence Timeliness Presentation 2. UsefulnessMeasurability Relevance Consistency 3. ReliabilityVerifiability Accuracy Completeness

16. AUDIT EVIDENCE GUIDE Programme performance indicator Estimated performance Targets 2012/13 Evidence Required Number of financial reports submitted in compliance with relevant legislations 12 In-Year- Monitoring reports Submission memo/ Letters IYM analysis reports 1 set of Annual Financial Statements Submission letter Financial Statements 4 budget documents Submission memo/ Letters Budget Documents

17. TREASURY GUIDES Treasury Regulations MTEF Guidelines AFS framework guide Annual report guidance Framework for managing programme performance information (FMPPI), issued May 2007.

18. CONCLUSION IA operation plan IFS review Quarterly review of PI AFS review

19. THANK YOU