Portfolio Committee of Police PFMA outcomes 2010/11 11 October 2011

Movements in audit outcomes of completed audits

Audits conducted by the AGSA PFMA audit outcomes 2010-11 Audit outcomes Audits conducted by the AGSA Departments* Public entities ** 2010-11 2009-10 Financially unqualified with no findings on predetermined objectives or compliance with laws and regulations Financially unqualified with findings on predetermined objectives and/or compliance with laws and regulations 2 1 Financially unqualified financial statements 100% 0% Qualified opinion Adverse opinion Disclaimer of opinion Financially qualified financial statements Total number of audits reported on Number of audit reports not issued by 31 August 2011 Total number of audits Total number of auditees in which findings arose from the AGSA's other legal reporting responsibilities: Predetermined objectives findings only Compliance with laws and regulations findings only Findings on both predetermined objectives and compliance with laws and regulations Outcomes reported on: Departments: Department of Police Independent Complaints Directorate Public Entity: Private Security Industry Regulatory Authority (PS

Movement in audit outcomes from 2009-10 to 2010-11 Departments and Public Entities Movement in audit outcome over 2009-10 Audit opinion Improvement Unchanged Regressed New departments Total reported on Prior year opinion on audits outstanding 2010-11 Financially unqualified with no findings   Financially unqualified with findings 2 3 Qualified Disclaimer / Adverse Total 1 1 2 Audit outcomes 2010-11 2009-10 Improvement/ Regression/ Unchanged Findings on predetermined objectives Findings on compliance with laws and regulations DEPARTMENT   Department of Police Financially unqualified with findings on predetermined objectives or compliance with laws and regulations Unchanged Independent Complaints Directorate PUBLIC ENTITIES Private Security Industry Regulatory Authority Qualified Improved

Corrections of material misstatements identified by auditors ICD disclosure note on contingent liabilities was incorrectly calculated. Police did make corrections, most of these corrections was within a note – not affecting the balance of the line items. (minor assets – correction between additions and disposals, S&T re-allocation between foreign and local, Inclusion of irregular expenditure that was reported in the financial year ) PSIRA (reclassification of assets, leases, disclosure corrections on numerous GRAP, unknown deposits allocations, bad debts corrections)

Predetermined objectives (PDO) findings Departments and public entities   Non-Compliance 2010-11: 66% 2009-10: 100% Not useful 2010-11: 33% 2009-10: 33% Not reliable 2010-11: 66% 2009-10: 66% Presentation 2010-11: 33% 2009-10: 0%

Existence of performance information SAPS: Predetermined objectives (PDO) findings Existence of performance information Consistency of performance information between: Strategic/annual performance plan, quarterly reports and annual performance report Presentation in annual report Reliability of reported performance information STRATEGIC MANAGEMENT ANNUAL REPORT DIVISIONS COMBINE INFORMATION, SUBMIT PROVINCIAL VERIFY, COMBINE, SUBMIT CLUSTER LEVEL VERIFY, COMBINE, SUBMIT Audit and compare reported performance information to relevant source documentation and conduct procedures to ensure validity, accuracy and completeness of reported performance information Non compliance is referring to lack of internal controls over predetermined objectives – also include, if a strategic plan is in place and implemented. Presentation refers to major variances not explained. Reported information not useful –refer to if it is consistent (with strategic plan) relevant and measurable Reported information not reliable refers to predetermined objectives being accurate, valid and complete. Police Main findings was on reported information not reliable – this is mainly due to the fact that the capturing of these reported information is at station level (completeness – could not verify on systems used and compared to source documentation – not complete (refer to slide above) ICD Cases was sign off as complete without the case investigation report PSIRA Due to new management appointed in Sept 2010 they’ve have seen that the strategic plan are not inline with objectives of PSIRA, they revised the strategic plan in Feb 2011. - this resulted in predetermined objectives findings – performance plans not linked to the annual budget, no annual plan etc STATIONS/UNITS SUPPORTING DOCUMENTATION

Supporting documentation at stations/units is not available SAPS: Predetermined objectives (PDO) findings Supporting documentation at stations/units is not available Systems for collating information are not updated Information to be sent through is not accurate System used does not agree to supporting documentation Reliability of PI Validity Accuracy Completeness

Areas of findings on non-compliance with laws and regulations

Summary of findings on supply chain management Police Annual financial statements – material misstatements corrected on the AFS Strategic planning – did not ensure an effective and efficient system of internal control with predetermined objectives Procurement and contract management – R70 million irregular expenditurethat had to be declared as irregular (was properly disclosed), also, that contract management are not effective within DoP, and rotation of suppliers are lacking. ICD Annual financial statements – material misstatement corrected on the AFS Expenditure management – payments not done within 30 days PSIRA Annual financial statements – material misstatements corrected on the AFS Budgets – did not submit monthly reports to executive authority or anticipated revenue report Expenditure management – effective cash management policy, irregular and fruitless and wasteful expenditure was disclosed Revenue management – di not take effective steps to collect all money due to them Procurement – sufficient audit evidence for transaction above R500 000 could not be obtained.

Unfair or uncompetitive procurement Through processes in SAPS (BAC) – disclosed & condoned (total of R70 million). 3 Quotations not obtained Suppliers did not declare interest Approval without all required information Police day – poor planning

Unfair or uncompetitive procurement Resulted in non-compliance findings Inadequate monitoring of contract performance Price quotations not on rotation basis

Findings on HR management focus areas Departments

Findings on HR management focus areas Public entities 100% 100% 100% 100% 100%

Findings on IT control focus areas * IT audit was not conducted at public entity