Transcript FETAKGOMO MUNICIPALITY

FINANCE WEEK PRESENTATION
CONTENTS
1.
2.
3.
4.
5.
Basis of qualification
Risk Management
Potential internal control threat/deficit
How to enhance current internal control systems
Conclusion
1. Basis of qualification
 Asset Management
 1. Municipality is being qualified on movable asset
register and the point of emphasis was usage of fair
value/DRC for assets acquired pre-June 2009.
 2.Technical interpretation of directive 7 and different
understanding on application between the auditor and
the auditee.
 Supply chain management
 1. Non adherence to SCM which lead to incurrence of
irregular expenditure.
Risk Management process
 Inadequate risk management processes which lead to
internal control deficit in the SCM.
 Risk management processes failed to identify full
GRAP adoption as the catastrophic risk.
 Major finance risks not picked up by risk management
processes.
 Too much focus on non finance risks and minimal
focus on finance risks
 Both strategic and operational risks did not address
the potential internal control threat .
Potential internal control threat/
deficit
 Lack of pro-active internal measures to detect SCM
related deficiencies
 Non compliance to SCM regulations
 Potential abuse of SCM processes
 Non alignment of policy imperatives
 Different interpretation and/or misinterpretation of
statutes and policy frameworks
 Lack of due diligent mechanisms
How to enhance the current
internal control systems
 Putting proactive internal control mechanisms on SCM e.g. screening of all the
suppliers listed in the database prior implementation of database.
 Put early warning mechanisms to identify possible irregular expenditure and report them
for possible correction.
 Regular review of internal control systems and alignment of policies .
 Make use of internal audit to monitor the internal control risks and weaknesses.
 Pay attention to audit action plan and no need to avoid moving targets.
 Implementation of MPAC and audit committee resolutions
 Engage AG to perform the interim audit on issues raised in the previous audit.
 Adequate management of assets which are 100% GRAP compliant
 Alignment of municipal asset management policy with ASB directives.
 Treating asset management as a discipline and continuous process not as a once off
event.
 Strengthening of relationship with key oversight stakeholders ,i.e. Auditor General
,MPAC, Internal Audit and Audit Committee
CONCLUSION
Proper planning, organising, leading and control is the
only solution to sustainability of any institution.