Pretoria - Labour Minister Mildred Oliphant congratulated her department's Director General for receiving an unqualified audit report for the first time in six years.
"I would like to congratulate the team for their sterling work in ensuring that we spend the money entrusted to us by the people of South Africa in a prudent and responsible manner," she said.
Over a period of six financial years, dating back to the 2004/05 financial year, the Auditor-General (AG) issued a qualified opinion on the financial statements of the department on a number of matters.
These ranged from the absence of supporting documentation in respect of journal transactions to the management of assets within the department.
Initially, the qualification focused on capital assets. However, during the 2008/09 financial year, resulting from the reclassification of the department's IT-PPP [public-private partnership] contract from an operational lease to a financial lease, the Auditor-General included IT assets as a contributing factor to the qualified opinion.
To meet the standards of the AG, the department developed and stringently implemented an action plan aimed at correcting the deficiencies identified during the audit of the department's assets, as well as the IT-public-private partnership (PPP) assets.
With the cooperation of all relevant parties, the project plan regarding capital assets was effectively carried out and as a result, the AG expressed a satisfactory opinion in respect of the department's capital assets in the 2009/10 financial year. The AG indicated satisfaction with the fact that the department had accounted for assets within a reasonable level of materiality.
However, the department was faulted in respect of the IT-PPP assets. Despite the PPP contract stipulating that the PPP partner should make the IT-PPP assets available to the department, methods to enforce this stipulation did not yield favourable results.
The department then addressed the audit findings, which required officials to work tirelessly alongside officials from the PPP partner, to locate, record and reconcile all IT assets in the control of the PPP partner, from contract inception to date.
This exercise included the financial information that had never been presented to the department since the inception of the PPP contract. The AG was satisfied with the results, thus issuing an unqualified audit report for 2010/11 financial year.
"The clearing of the qualified opinion, regarding the IT-PPP assets, puts the department in a favourable position in that it can now concentrate on improving all aspects of internal controls at its provincial and head office operations, which are the pillar of good financial management," said the department's Director General Nkosinathi Nhleko.
