THE NATIONAL TREASURY WORKSHOP ON LESSONS LEARNT YEAR 2016/17 IN THE PREPARATION OF THE FINANCIAL STATEMENTS OF PROJECTS

Top Audit Issues for Projects FY 2016/2017

Top Audit Issues for FY 2016/2017 Unsupported Expenditure Special Deposit Account Reconciliation Cash and Bank Balances Issues Unaccounted for Imprest / advances Inaccuracy in presentation of financial Statements Unsupported prior year adjustments Cumulative to date amounts not correctly computed Non-sanctioned reallocation of project funds Irregular Expenditure from Funds Meant for projects Unresolved Prior year matters Late Submission of Financial Statements Top Audit Issues for Projects FY 2016/2017

Top Audit Issues for FY 2016/2017 1. Unsupported Expenditure: The auditor identified that some Projects had unsupported expenditure in payments included in the statement of receipts and payments. Resolution: Ensure that all payments included in the financial statements are fully supported. Top Audit Issues for Projects FY 2016/2017

Top Audit Issues for FY 2016/2017 2. Special Deposit Reconciliation Issues: The auditor identified various issues concerning the Special Deposit Account Reconciliation In some projects financials, the amounts recorded as receipts do not agree to the amount withdrawn from the special deposit account. The variances have not been reconciled nor explained. Some projects did not submit the special account statement contrary to the requirement by Treasury that External Resource department prepare annual statements of special account that are to form an integral part of the financial statements Top Audit Issues for Projects FY 2016/2017

Top Audit Issues for FY 2016/2017 3. Cash and Bank Balances Issues: The auditor identified various issues concerning the Cash and Bank Balances. Bank balances were not supported by a bank certificate and actual cashbook. Some of the bank balances presented in the financial statements differed from the figure in the cashbook bank balances Some projects share bank accounts with other projects or the MDA Non- preparation of Bank reconciliation statements. Some projects reconciliations had long outstanding stale cheques. Top Audit Issues for Projects FY 2016/2017

Top Audit Issues for FY 2016/2017 4. Unaccounted for Imprest/ advances: Auditors identified that some projects did not have supporting analysis for imprest and advances. Further some have long outstanding unaccounted for imprest. Top Audit Issues for Projects FY 2016/2017

Top Audit Issues for FY 2016/2017 5. Presentation of financial Statements: Auditors noted that some projects had the following presentation issues; Casting issues and notes not tying to figures in the Statements in financial statements. Expenditure presented in the Statement of receipts and payments not tying to that in the General Ledger. Statement of appropriation amounts differs from those presented in the Statement of Receipts and Payments Top Audit Issues for Projects FY 2016/2017

Top Audit Issues for FY 2016/2017 6. Unsupported prior year adjustments: The auditor noted that some projects had a prior year adjustment which has not been supported. Resolution: Ensure prior year adjustments are properly accounted and disclosed in the financial statements. Notes to this adjustment are also adequate in line with IPSAS cash standard section 1.5.3 Top Audit Issues for Projects FY 2016/2017

Top Audit Issues for FY 2016/2017 7. Cumulative to date amounts not correctly computed: Some projects did not compute the cumulative to date amounts correctly i.e, cumulative to date since inception of the project not correctly computed. Resolution: Projects should ensure that cumulative to date amounts are correctly computed. Top Audit Issues for Projects FY 2016/2017

Top Audit Issues for FY 2016/2017 8. Non-sanctioned reallocation of project funds: The auditor noted that project funds were reallocated to another project within the same ministry. However, the reallocation was neither sanctioned by the National Treasury nor supported by the Financing Agreement. Top Audit Issues for Projects FY 2016/2017

Top Audit Issues for FY 2016/2017 9. Irregular expenditure from funds meant for projects: In some projects, the Auditor noted that some of the projects’ funds were utilized on unrelated expenditure items, contrary to the Government Financial Regulations and Procedures. Top Audit Issues for Projects FY 2016/2017

Top Audit Issues for FY 2016/2017 10. Unresolved Prior year matters: Auditors identified that projects did not resolved audit issues raised in previous years and thus this issues remained pending in the current audit. Top Audit Issues for Projects FY 2016/2017

Top Audit Issues for FY 2016/2017 11. Late Submission of Financial Statements: Auditors identified that some projects did not submit the financial statements which is in breach of Section 183 of the PFM Act Top Audit Issues for Projects FY 2016/2017