SCOPA

1
PROGRESS REPORT ON PFMA IMPLEMENTATION
SCOPA 23 September 2003
2
PFMA IMPLEMENTATION NATIONAL TREASURY

• Accreditation of training courses
• Roll-out of large-scale training programme
• Systems master plan - Jan 2004
• ASB fully operational
• Supply Chain Management Framework

3
PFMA IMPLEMENTATION DEPARTMENTS AND
CONSTITUTIONAL INSTITUTIONS

• Previous reports based on compliance
• Normative measures for Financial Management
• Measure compliance and qualitative improvements
• Progress by departments/institutions presented
  graphically

4
GRAPHIC PRESENTATION OF SURVEY RESULTS DEPARTMENTS
5
MANAGEMENT ARRANGEMENTS
OFFICE OF THE CFO
Appointment of CFO
91
Appointment Financial Accountant
77
Appointment Management Accountant
49
Appointment Supply Chain Practitioner
54
Alignment of Finance Component to support CFO
34
13
Vacancies - Finance Component
0
20
40
60
80
100
6
MANAGEMENT ARRANGEMENTS (CONT.)
INTERNAL CONTROL (INC. POLICIES/PROCEDURES)
63
Documented financial policies/procedures
Consistency of policies/procedures with
80
Treasury Regulations
Annual revision of policies/procedures
71
Favourability of Internal Audit findings -
51
Control mechanisms
Favourability of Internal Audit findings -
60
Organisation of functions
0
20
40
60
80
100
7
MANAGEMENT ARRANGEMENTS (CONT.)
RISK MANAGEMENT
100
Risk Assessment conducted
83
Risk Assessment performed annually
Documented Fraud Prevention Plan as part of
83
risk strategy
Regular feedback on strategies implemented
74
to mitigate risks
0
20
40
60
80
100
8
MANAGEMENT ARRANGEMENTS (CONT.)
INTERNAL AUDIT
100
System of Internal Audit (IA)
89
Head of Internal Audit appointed
Audit Charter approved by Audit Committee
94
Rolling 3 year strategic Internal Audit Plan (IAP)
91
63
IA Unit reports quarterly to the Audit Committee
63
IAP addresses risk areas
57
IA Unit report directly to Accounting Officer
0
20
40
60
80
100
9
MANAGEMENT ARRANGEMENTS (CONT.)
EFFECTIVENESS OF AUDIT COMMITTEES
Meets at least twice per annum
97
Meets with external auditors at least
94
annually
86
Reports on effectiveness of internal audit
Reports on risk areas to be covered in
60
internal and external audit
Reports on compliance with legal and
66
regulatory provisions
0
20
40
60
80
100
10
MANAGEMENT ARRANGEMENTS (CONT.)
NATIONAL PUBLIC ENTITIES (SCH 2/3A/3B)
Submission Strategic Plans estimates of
67
rev exp (3A)
Submission Quarterly performance reports
58
(3A)
Submission of Corporate Plans est i.r.o rev,
69
exp borrowings (2 3B)
Conclusion of shareholders compacts (2 3B
54
Submission Quarterly reports on performance
54
(2 3B)
0
20
40
60
80
100
11
REVENUE, EXPENDITURE, ASSET AND LIABILITY
MANAGEMENT (REAL) MANAGEMENT
REVENUE AND EXPENDITURE
100
Regular cash deposits
Compliance with Sec 38(1)(j) before
100
transferring funds
Actual expenditure in accordance with
42
cash flow projection
Variance of deviation in excess of cash
7
flow projection
0
20
40
60
80
100
12
REVENUE, EXPENDITURE, ASSET AND LIABILITY
MANAGEMENT (REAL) MANAGEMENT (CONT)
ASSET AND LIABILITY MANAGEMENT
89
Establishment of Asset Register
77
Classification of different assets
Clear identification of persons responsible for
66
assets
Integration with purchasing and payment
63
system
54
Documented debt write off policy
7
Bad debts in relation to debtors
0
20
40
60
80
100
13
ACCOUNTING AND REPORTING
ACCOUNTING
Control measures to ensure authentic
100
supporting documentation
Monthly recon of suspense/clearing
83
accounts
Postings to suspense/clearing accounts
62
approved by CFO
Uncleared amounts reported to accounting
31
officer
Accounting officer certifies month end
46
closures
0
20
40
60
80
100
14
ACCOUNTING AND REPORTING (CONT)
REPORTING - PUBLIC ENTITIES
TablingAnnual Report and Fin Statements -
29
Legislature within 6 months from year end
Tabling of explanations if not tabled within 6
65
months
Rev/Exp - Quarterly reporting (3A) within 30 days
67
from end of quarter
PFMA and Treasury Reg compliance - Quarterly
29
reporting 30 days from end of quarter
0
20
40
60
80
100
15
ACCOUNTING AND REPORTING (CONT)
REPORTING- DEPARTMENTS
Submission of financial statements to
94
Treasury by 31 May 2002
Annual reports tabled in legislature before 30
Sept 2002
66
Tabling of explanations if not tabled by
100
30 Sept 2002
Annual Report/Fin Statements -consistent
83
with Treasury Guidelines
Monthly reports on actual/projected revexp
97
0
20
40
60
80
100
16
GRAPHIC PRESENTATION OF SURVEY RESULTS CONSTITUTIO
NAL INSTITUTIONS
17
MANAGEMENT ARRANGEMENTS
OFFICE OF THE CFO
75
Appointment of competent CFO
Appointment of Financial Accountant
100
50
Appointment of Supply Chain Practitioner
38
Appointment of Management Account
Alignment of Finance Component to support the CFO
13
3
Percentage of vacancies in the Finance Component
0
20
40
60
80
100
18
MANAGEMENT ARRANGEMENTS (CONT)
RISK MANAGEMENT
Risk Assessment
conducted/Annual Risk
88
Assessment
Regular feedback on
strategies implemented to
88
mitigate risks
Documented Fraud
63
Prevention Plan as part of
risk strategy
0
20
40
60
80
100
19
MANAGEMENT ARRANGEMENTS (CONT)
DELEGATIONS OF AUTHORITY AND INTERNAL CONTROL
Delegations i.t.o the PFMA
75
and Treasury Regulations
Documentation of financial
50
policies and procedures
Consistency of policies and
25
procedures with TR's
Annual revision of policies and procedures
25
0
20
40
60
80
100
20
MANAGEMENT ARRANGEMENTS (CONT)
INTERNAL AUDIT
System of Internal Audit
(IA) reporting directly to
100
AO
Audit Charter approved
88
by Audit Committee
Rolling 3 year strategic
63
Internal Audit Plan
IAP addresses risk
75
areas
IA Unit reports quarterly
50
to the Audit Committee
0
20
40
60
80
100
21
MANAGEMENT ARRANGEMENTS (CONT)
EFFECTIVENESS OF AUDIT COMMITTEES
Meets at least twice per annum
88
Meets with external auditors at least annually
88
Reports Effectiveness of internal
50
audit/compliance with legal prov
Reports on risk areas to be covered in internal
50
and external audit
0
20
40
60
80
100
22
STRATEGIC PLANNING
Strategic plan (SP)
63
tabled timeously in
legislature
SP compliant with
100
Treasury Regulations
63
SP annually revised
Documented procedure
25
to monitor performance
against SP
0
20
40
60
80
100
23
REVENUE, EXPENDITURE, ASSET AND LIABILITY (REAL)
MANAGEMENT
REVENUE AND EXPENDITURE MANAGEMENT
100
Regular cash deposits
Actual expenditure in accordance with
63
cash flow projection
Variance of deviation in excess of cash
3
flow projection
0
20
40
60
80
100
24
REVENUE, EXPENDITURE, ASSET AND LIABILITY (REAL)
MANAGEMENT (CONT)
ASSET AND LIABILITY MANAGEMENT
100
Establishment of Asset Register
50
Classification of assets
50
Persons responsible for assets
Integration with purchasing and payment
38
system
0
20
40
60
80
100
25
ACCOUNTING AND REPORTING
ACCOUNTING
Control measures ensure authentic supporting
100
documents
50
Monthly recon of suspense/clearing accounts
Postings to suspense/clearing accounts
50
approved by CFO
AO certificate of compliance w.r.t month end
25
closures
25
Uncleared amounts reported to AO
0
Daily bank reconciliations
0
20
40
60
80
100
26
ACCOUNTING AND REPORTING (CONT)
REPORTING - CONSTITUTIONAL INSTITUTIONS
Submission fin. statements to National
50
Treasury by 31 May 2002
Annual report fin statements tabled in
63
legislature by 30 Sept 2002
Tabling of Sec 65 explanations if not
0
tabled by 30 Sept 2002
0
20
40
60
80
100
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INTERVENTIONS TO ADDRESS ISSUES OF CONCERN

• Financial Management Improvement Programme
• Accounting policies, practices, procedures and
  guidelines related to REAL.
• Revised Internal Audit Framework and booklets on
  various areas of internal control.
• Quality assurance reviews on internal units.

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RECOMMENDATIONS

• NOTE
• Progress with Implementation of the PFMA
• Interventions to assist departments with PFMA
  implementation
• Next progress report towards end of 2003/04
  financial year.

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THANK YOU