THE NATIONAL TREASURY FEEDBACK WORKSHOP ON THE ANNUAL FINANCIAL STATEMENTS FOR FINANCIAL YEAR 2017/2018

TOP 15 QUALITY REVIEW ISSUES FOR PROJECTS IN FY 2017/2018

Top 15 Quality Review Issues for FY 2017/2018 Missing information on the bank balances Incomplete financial statement disclosures Missing special deposit account movement schedule Inconsistency between the funding summary and the Statement of Receipts and Payments Missing information on overall performance of the project Inconsistency between the notes and the primary financial statements Incomplete approval of the financial statements Unsupported transfers from and to other government entities Incomplete financial statements Non Applicable line items Casting errors in the financial statements Actual on Comparable Basis in the Statement of Appropriation not agreeing to the amounts in the Statement of Receipts and Payments Unexplained Significant utilization variances Variance between special deposit account and the Statement of receipts and payments Incorrect reporting template Top 15 Quality Review Issues for FY 2017/2018

Quality Review issues for Projects in FY 2017/2018 1. Missing information on the bank balances: Most projects did not provide the following information to support the bank balances reported in the financial statements: Bank reconciliations including board of survey schedules Bank balances certificates Further, some Projects did not disclose their bank account details in the submitted financial statements. Resolution: Projects should fully support their bank balances. Also, they should always indicate the bank details in terms of name, branch and account number Top 15 Quality Review Issues for FY 2017/2018

Quality Review issues for Projects in FY 2017/2018 2. Incomplete financial statement disclosures: The financial statements submitted do not include the following disclosure appendices as required by the IPSAS cash reporting template: Summary of fixed assets register Pending bills listing and analysis Progress on follow up of auditors recommendations Special deposit accounts reconciliation statements Resolution: Projects should disclose pending bills and analysis in the financial the statements and provide the summary of fixed assets register as required by the IPSAS cash template. Top 15 Quality Review Issues for FY 2017/2018

Quality Review issues for Projects in FY 2017/2018 3. Missing special deposit account movement schedule: The project has not provided the special deposit account movement schedule showing the flow of funds into the Special Deposit Account. The total amount withdrawn from the Special Deposit Account should be accounted for under receipts in the Statement of Receipt and Payments. Resolution: The project should ensure the special deposit account movement schedule is provided. Opening and closing balances as per the movement schedule should be agreed to the Special Deposit Account bank reconciliation which should also be provided. Top 15 Quality Review Issues for FY 2017/2018

Quality Review issues for Projects in FY 2017/2018 4. Inconsistency between the funding summary and the Statement of Receipts and Payments: We noted that the “Amounts Received to Date” in the funding summary of the project information and overall performance does not agree to the “Cumulative to date” amounts in the Statement of Receipts and Payments. Resolution: The project should ensure that the “Amount Received to Date” in the funding summary of the project information and overall performance agrees to the “Cumulative to date” amounts in the Statement of Receipts and Payments. Top 15 Quality Review Issues for FY 2017/2018

Quality Review issues for Projects in FY 2017/2018 5. Missing information on overall performance of the project: Most projects submitted financial statements to the National Treasury that did not provide information on project governance funding summary section challenges encountered during project implementation and summary of project compliance. Resolution: The projects should include the missing information for completeness of the project’s financial statements. Top 15 Quality Review Issues for FY 2017/2018

Quality Review issues for Projects in FY 2017/2018 6. Inconsistency between the notes and the primary financial statements: We noted instances where there were variances between the amounts disclosed in the primary financial statements and the amounts disclosed in the corresponding notes. Resolution: The projects should ensure that the figures as per the primary financial statements agree to the referenced notes. The differences noted should be investigated and resolved. Top 15 Quality Review Issues for FY 2017/2018

Quality Review issues for Projects in FY 2017/2018 7. Incomplete approval of the financial statements: Some of the submitted financial statements were not approved by the Accounting Officer, the Project Coordinator and the Project Accountant. Resolution: The project should ensure that the submitted financial statements bear all the required statements and the Accounting Officer, the Project Coordinator and the Project Accountant have signed all statements that require approval. The statements should also be dated for such approval. Top 15 Quality Review Issues for FY 2017/2018

Quality Review issues for Projects in FY 2017/2018 8. Unsupported transfers from and to other government entities: Transfers from other government entities for instance GOK counterpart funding has not been reconciled with the disbursing entity. Further, transfers to other government entities has not been reconciled with the receiving entity. Resolution: The project should ensure that confirmation letters for the projects are obtained and attached as annexures to the financial statements. Top 15 Quality Review Issues for FY 2017/2018

Quality Review issues for Projects in FY 2017/2018 9. Incomplete financial statements: We noted that some submitted financial statements did not include the following: Statement of Comparative Budget and Actual Amounts Cumulative to date amounts in the Statement of Receipts and Payments and their respective notes Resolution: The projects should ensure that all the required statements and information is provided in the annual report. Top 15 Quality Review Issues for FY 2017/2018

Quality Review issues for Projects in FY 2017/2018 10. Non Applicable line items: We noted that in some projects, the financial statements line items, including their respective notes that are not applicable in the template have not been removed. These line items and notes do not provide any additional information to the users of the financial statements. Resolution: Projects should ensure that the financial statements line items, including their respective notes that are not applicable in the template are removed and realign numbering in the revised template Top 15 Quality Review Issues for FY 2017/2018

Quality Review issues for Projects in FY 2017/2018 11. Casting errors in the financial statements: We noted that there were casting errors in the financial statements and in the notes to the financial statements in some projects This may lead to misstatement of financial statements Resolution: Submitted financial statements should be reviewed for arithmetic accuracy. Differences noted should be investigated and corrected. Top 15 Quality Review Issues for FY 2017/2018

Quality Review issues for Projects in FY 2017/2018 12. Actual on Comparable Basis in the Statement of Appropriation not agreeing to the amounts in the Statement of Receipts and Payments: We noted that in some projects, the amounts reported in the Statement of Receipts and Payments did not agree to Actual on comparable basis in the Summary Statement of Appropriation. Resolution: The Projects should ensure that the amounts in the Statement of Receipts and Payments agree to Actual on comparable basis in the Summary Statement of Appropriation. Top 15 Quality Review Issues for FY 2017/2018

Quality Review issues for Projects in FY 2017/2018 13. Unexplained Significant utilization variances: Some projects failed to explain significant utilization variances in the Summary Statement of Appropriation. Resolution: Ensure that significant utilization variances (below 90% and above 100%) are explained. Top 15 Quality Review Issues for FY 2017/2018

Quality Review issues for Projects in FY 2017/2018 14. Variance between special deposit account and the Statement of receipts and payments: We noted that there were variances between the amounts withdrawn from the Special Deposit Account as reported in the special deposit movement schedule and the proceeds from loans/ grants recorded in the Statement of Receipts and Payments Resolution: The projects should reconcile withdrawals from the Special Deposit Account to proceeds from grants/ loans in the Statement of Receipts and Payments. Top 15 Quality Review Issues for FY 2017/2018

Quality Review issues for Projects in FY 2017/2018 15. Incorrect reporting template: We noted that there are some projects that used the quarterly reporting template to prepare annual reports, while some projects did not use the IPSAS cash template to prepare their annual reports. Resolution: The projects should prepare their annual financial statements using the required IPSAS cash template as prescribed by the Public Sector Accounting Standards Board.  Top 15 Quality Review Issues for FY 2017/2018