senqu municipality clean audit best practice - agsa presentations/eastern cape...effective...
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Senqu Municipality Clean Audit best
Practice
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BACKGROUND Senqu Municipality is a semi rural Municipality
situated in the Joe Gqabi District of the Eastern Cape.
The Municipality has a total population of 134 150 people.
The municipality constitute of the following towns:
Rossouw, Rhodes, Barkly East, Sterkspruit and Lady Grey where the seat of the council is situated
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BACKGROUND CONTINUES…
Before achieving this Clean Audit , the municipality had a record of 5 Unqualified Audit opinions
This achievement of a “CLEAN AUDIT” came as a process and not an event
The municipality had a lot of changes to make and systems to adjust in order to achieve this objective.
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BACKGROUND CONTINUES…
A Clean Audit was only possible when it was made a key Organisational Objective with Council and the Accounting Officer setting the tone at the top.
A Conducive Municipal Environment with the following minimum norms must exists to ensure the achievement of a Clean Audit
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Conducive Municipal Environment
Proper Oversight Function performed by Municipal Councils
The Accounting Officer must ensure that each Director is held responsible for different responsibilities assigned to them
Creating a Deadline Orientated Culture with consideration given for effective corrective action and accountability
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Conducive Municipal Environment
Clear and Effective Interdepartmental Communication must exists
Effective and uniform Document management and Filling Systems
Adherence to Good Financial Management Principles and effective Internal Controls
Effective Monitoring and Reporting Functions
Compliance with applicable laws and regulations.
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OPCAR
The Operation Clean Audit Report is of Great Importance.
A tool to address All issues raised in Audit Report and Management Report from AG.
Also ensure that issues raised in previous years reports is addressed sufficiently
This was backed up by evidence that passed internal audit tests
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Key Technical Performance Issues
Annual controls
Develop pre-determined objectives that are SMART (specific, measurable, achievable, realistic and time-bound)
Audit committee and internal audit to monitor the Strategic and Annual Performance Plans and make comments on progress.
Systems to be developed to report achievement against pre-determined objectives on a monthly basis. This involves aligning the performance reporting systems to extract the required information from the financial reporting systems.
Audit committee and internal audit to review final report of performance against pre-determined objectives together with financial information prior to submission to MM/Mayor.
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Key Technical Performance Issues Quarterly Controls
Quarterly performance and financial reports are prepared against predetermined objectives and approved by the MM before they are submitted to the Mayor.
Audit committee and internal audit to review the actual performance against pre-determined objectives and financial information on a quarterly basis and should submit their reports thereon to MM/Mayor for further action.
Council to ensure that the corrective measures recommended by the audit committee are implemented.
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Key Technical Performance Issues
Monthly controls
Record management of supporting documentation relating to predetermined objectives and financial information.
Monthly financial and performance reporting to MM by programme leaders on predetermined objectives
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Key Issues for Performance & Finance
Principles to Adhere to:
Timelines (Daily, Weekly, Monthly)
Accuracy
Separation of Duties ( Prepare , Review and Approve)
Sufficient Supporting Evidence –that can be produced
Preparation of Audit File.
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Key PAF Issues (Finance & Other)
Everything needed by the AG must be in the Preparation of Audit File (PAF)
PAF deals with the detail substantiation of information between different sources.
OPCAR is the monitoring tool relating to correct previous years findings and is forming an important part of the PAF
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Documents in the PAF • Documents from the Administration
• Documents from the Budget Division
• Documents from Compliance & Performance
• Documents from Finance
• Documents from Corporate
• Documents from the Internal Audit
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Administration Docs
Addresses of all units of operations
Contacts of key staff
Any changes that presents a difference from the previous year
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Docs from the Budget Division
Approved SDBIP ( current & previous year)
Adjustment Budget
Approved Budget
Budget Reports
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Docs from Compliance & Performance
New legislation
Details of Legal council
List of investigation & criminal behaviour
Appoved IDP
IDP & Budget Preparation Schedule
Performance scorecards & Agreements
Risk Assessment
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Documents from Finance
Current and previous years AFS
Investments register
Listing of funds received
Finance related policies
Accounting policy
Accounting system Details ( any changes)
Accounting business processes
Other Registers
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Documents from Corporate
Minutes of all political & admin structures
Council
Executive Committee
SCM Evaluation & Adjudication
HR policies
Organogram (incl vacant positions)
Details of all Council members
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Documents from the Internal Audit
Audit Committee Minutes
Audit Committee Members
Internal Audit Committee Charter
Internal Audit Plan
List of and Internal Audit Reports
Internal Audit Team
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Finance Accounting Schedules & Docs
Accumulated Surplus (Reconciled)
Grants register Register of all Grants (eg: MSIG, MIG, ES, MFMG ..)
Reserves Schedules (cash backed!) Capital Replacement Reserve
All related Journals and Reconciliations
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Liabilities & Provisions
Loans Register
Loans Repayment Schedules
Any other Loan Agreements
Lease & Finance contracts & calculations
Landfill sites ( lifespan cost & provision)
Consultant - Qualifications and Valuations
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Employee Costs Analysis
Post Retirement Benefits
Long Service Awards
Bonusses & Performance Bonusses
Leave Provisions
Reconciliations
Current portions
Compensation Commissioner
S57 & Councilor remuneration Schedules
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Debtors – Creditors - Taxes
Balanced deposits register
Connections & Disconnections Register
List of Creditors
Also list of Debtors with Credit balances
VAT Recon (EMP201’s)
EMP 501 (Submitted to SARS)
Registration Document
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Assets & PPE Asset register
Additions
Disposals & council resolutions thereto
Depreciation
Residual Values
Useful lives review & condition assessment
Capital projects
Infrastructure unbundling
Electrical Infrastructure unbundling
Restated Assets Recon
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Assets & PPE
Land held for sale
Auction (notice & resolution)
Investment Property Register
Valuers movements & journals
Intangible Assets
Schedules of additions & disposals
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Cash & Valuation Roll Monthly Bank Reconciliations
Bank Statements
Any Cash Advances
Valuation Roll
Property Tax Recon
Valuations by Type
Tax Clearances
Advert & Notices
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Service Charges & Income
Approved Tariff Structure
NERSA letter of approved tariffs
Electricity losses
Notice of advert (date of tariff application)
Fines (Reconciliation)
Agency services income (SLA & reports)
Rental Charges (registers)
Any other Income
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Expenses
General Expenses
Backed up by vouchers duly authorized
Audit fees (schedule)
Notes to AFS (Detail)
SCM declarations, wasteful & unauthorized
& Irregular expenditures
Third party transactions, minor breaches
Contingent liabilities
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PAF Dependent on the following Stable political and administrative municipal
environments
Accountable administration with appropriate & reliable accounting systems.
Thorough planning and monitoring of activities
AG & other critical relationship value adds.
Year end, AFS & annual report preparation plan.
Financially sustainable to deliver services.
Employ credible consultants where necessary
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CONCLUSION
IT CAN BE DONE!
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KEY PRINCIPAL PLAYERS
Mayor: Cllr N Mtyali
Municipal Manager: Mr. MM Yawa
Directors :Mrs. P Bushula
Mr. CR Venter
Mr. R Crozier
Mrs. L Gologolo
Mr. Wonga
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THANK YOU!!!