AGSA Findings Action Plan Presentation for Portfolio Committee: Progress and Remedial Steps
The presentation focuses on progress made on AGSA action plans, addressing material findings leading to a qualified audit opinion. It highlights the split of 2022 Age Analysis in finance, remedial steps taken, and the ongoing process for 2023 Age Analysis. The report also discusses the misstatement in completeness of receivables/payables and the need for differentiated Age Analysis for each revenue stream. Management is working towards correcting errors and turning around timelines.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. Download presentation by click this link. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
E N D
Presentation Transcript
PURPOSE: TO PRESENT TO THE PORTFOLIO COMMITTEE FOR HUMAN SETTLEMENTS 1. To present to the Portfolio Committee for Human Settlements on progress made on the AGSA action plans The presentation will focus on material findings which resulted in a qualified audit opinion The status on the high vacancy rate and other Human Resource issues 2. 3. 2
MATERIAL FINDINGS AUDIT FINDING: REASONS FOR QUALIFIED OPINION 2021/22 REMEDIAL STEPS TAKEN TO CORRECT/ TURN AROUND TIMELINES - Management in finance has split the 2022 Age Analysis between debtors' balances relating to Exchange and Non-exchange transactions as required by Generally Recognised Accounting Practice (GRAP). This gave rise to a prior period error adjustment on the debtors amounts disclosed on the audited 31 March 2022 Annual financial statements. Management in finance are working on splitting the 2023 Age Analysis using a similar approach as above. 31 May 2023 Misstatement in completeness of receivables/payables from exchange transactions - During the audit of receivables and payables for both non-exchange and exchange transaction of the EAAB and PPRA, we have noted that a single age analysis was prepared for both non-exchange transactions and exchange transactions thus affecting the closing balances disclosed in the annual financial statements: - The lack of differentiated Age Analysis for each revenue stream led to the following 4 qualification paragraphs from the Audit General South Africa: A) Receivables from exchange transactions B) Receivables from non-exchange transactions C) Payables from exchange transactions Estate agency funds received in advance. D) Expenditure Allowance for credit losses from exchange transactions - - - - - The entity still maintains a single Age Analysis for all revenue transactions and the manual split of debtors balance between exchange and non-exchange transactions will continue necessary until the SAP (System Analysis Program) system has been configured to maintain different Age Analysis for different revenue streams. 3
MATERIAL FINDINGS CONTINUATION OF SLIDE 3 For 2022 Splitting of the Age Analysis between debtor s balance is complete For 2023 Management in Finance are in the process, but require year end data ( March 31st) to complete the task. Timeline for completion: April 30th 2023 4
MATERIAL FINDINGS AUDIT FINDING: REASONS FOR QUALIFIED OPINION 2021/22 REMEDIAL STEPS TAKEN TO CORRECT/ TURN AROUND TIMELINES - Management in finance has reviewed the penalties GL (General Ledger) for all revenue transactions relating to prior years. Penalties identified relating to previous years gave rise to a prior period error adjustment on the revenue amounts disclosed in the audited 31 March 2022 Annual Financial Statements. 31 May 2023 Revenue from non-exchange - Portion of penalties incorrectly recorded in the current year (Coaf 61) - During the testing of Revenue from non-exchange transactions, we have noted that management included portion of penalties that relates to prior years in the current year revenue account, (refers to the attached annexure) - Penalties registers continue to be maintained in excel on an annual basis as the current SAP does not bill automated penalties on a monthly basis. - The current IT system has limitations and thus, the process will be automated once the new ERP (Enterprise Resource Planning) system is procured. 30 April 2023 5
MATERIAL FINDINGS AUDIT FINDING: REASONS FOR QUALIFIED OPINION 2021/22 REMEDIAL STEPS TAKEN TO CORRECT/ TURN AROUND TIMELINES - Management in finance will perform Inventory counts and invite the Auditor General South Africa as of 31 March 2023. 31 March 2023 Inventories: Existence of Inventory (COAF ( Communication Of Audit Findings 35) - Purpose of AG Invite: An inventory count is conducted on the last day of the financial year. The physical count on the floor is then verified with what s captured in the system and any adjustments are captured via journals if need be. AG is invited for observation as it s part of their procedures. AG sometimes do spot counts, if need be. - During the audit of the EAAB Inventories balance, we noted the following issue that we need to bring forth to management: Inventories count not performed. At year end, the Management did not perform inventories stock count for the balance recorded in the EAAB annual financial statement, thus we could not confirm how the management determined the existence of the study guide amounting to R1 313 908,00, presented in the Annual financial statement. - - - In the prior year, the Estate Agency Affairs Board transitioned to the Property Practitioners Regulatory Authority as of 1 February 2022. Management in finance didn t perform an Inventory count on that transition date to verify the existence of such Inventory balance as of transition date as required by GRAP due to management oversight. 6
ADMINISTRATIVE FINDINGS AUDIT FINDINGS: REMEDIAL STEPS TAKEN TO CORRECT/ TURN AROUND TIMELINES - Human Resource Management: High vacancy rate - The recruitment of all executives and managerial positions has been concluded, pending concurrence from The Minister for CFO and COO roles. The list to be sent to the Department. Please see next slide for all positions 30 April 2023 - Human Resource Management: Non- compliance with Recruitment policy during the appointment process Communication of Audit Findings (COAF) 28 - The recruitment policy has been revised to include explicit controls and guidelines for the recruitment process as specified in the policy. 31 March 2023 - The Policy was tabled at the HR Board Sub-Committee on 17 March 2023 for recommendation to the board. ACEO and Management have incorporated edits. The policy will be taken to The Board for review and approval at the policy review workshop on March 24th, 2023 24 March 2023 7
EXECUTIVE AND MANAGER APPOINTMENTS APPROVED BY THE BOARD ERRATUM DATE (TO STIPULATE PACKAGES FOR THE POSITIONS INITIALLY ADVERTISED ON 04 SEPTEMBER 2023 DATE ADVERTISED CLOSING DATE CLOSING DATE INTERVIEW DATE COMMENCEMEN T DATE POSITION Chief Information Officer 10-Jan-23 1-May-23 Chief Corporate Support Services 11-Jan-23 1-Apr-23 Manager- Property Sector: Transformation 16-Jan-23 1-Apr-23 4-Sep-22 18-Sep-22 6-Nov-22 20-Nov-22 Manager- Property Sector: Research 17-Jan-23 To be confirmed Executive Manager: Licensing 18-Jan-23 1-Apr-23 Executive Manager: Investigation and Enforcement 19-Jan-23 1-Apr-23 8
CEO ROLE The process for filling the CEO position has not yet commenced since the dismissal of Ms. Mohlala. There is an ongoing matter M Mohlala - Mulaudzi // PPRA (CCMA - Unfair dismissal dispute) Unfair dismissal dispute in the CCMA has been set down for 25 April 2023 The Board of The PPRA to advise on the commencement of this process 9
RECOMMENDATION 1. It is recommended that Portfolio Committee for Human Settlements note the report 10
