SANEDI

INDEX

KEY ACTIVITIES DURING FINANCIAL YEAR DISCUSSIONS ON KEY ACTIVITIES CONCLUSION APPRECIATION

KEY ACTIVITIES DURING FINANCIAL YEAR

Accuracy, adequacy and reliability of management financial reports

Effectiveness of systems internal control Compliance with company policies and

delegated authority Review operations and reports of Internal

Audit Review the operations and reports from

AGSA

KEY ACTIVITIES DURING FINANCIAL YEAR

Effectiveness of the risk management philosophy, strategy and policy

Effectiveness of the system for monitoring compliance with laws and regulations

Appropriate targets and benchmarks Corporate Governance Matters Matters for referral to the Board Other Matters

DISCUSSION ON KEY ACTIVITIES

Review of quarterly management accounts Although deficiencies in internal control were

identified, management implemented corrective actions to remedy them

No deviations came to light during our interventions with management on compliance with policies or delegated authority

Internal audit charter, staffing skills and structure is appropriate and adequate

DISCUSSION ON KEY ACTIVITIES......cont

Regular interaction with AG , monitoring of activities, budgets etc

AGSA Findings-SANEDI is in a transitional period of 18 months and most of the findings are attributable to this.

Risk Management Processes were adequate and effective in evaluating and mitigating risk exposures regarding governance, operations and information systems

CONCLUSIONS

Internal control effectiveness

 The audit committee is satisfied that a system of internal controls has been put in place and considers the system of internal controls appropriate in all material respects to:

- reduce risks to an acceptable level;

- meet the business objectives;

-ensure assets are adequately safeguarded; and

- ensure that transactions undertaken are recorded in the accounting records.

 

CONCLUSIONS ...... cont

Internal Audit provides the audit committee with reasonable assurance that the majority of internal controls are appropriate and effective. This is achieved by means of the risk management process, as well as the identification of corrective actions and suggested enhancements to the controls and processes. From the various reports of the internal auditors, we noted that matters indicating any deficiencies in the system of internal control have been brought to management's attention and corrective measures are being implemented.

 

CONCLUSIONS ... cont

Corporate Governance

 We are of the opinion that the company continues to strive towards complying with sound principles of corporate governance. As per our discussions with management, management confirms that the content and quality of monthly and quarterly reports prepared and issued by the Chief Executive Officer during the year under review were properly formulated and have complied with the PFMA in this regard

CONCLUSIONS .....cont

Risk Management

 The Board assigned the oversight of the risk management function to the Committee. A formal risk assessment was undertaken for the year ending 31 March 2012 with quarterly reviews, updates and reports. Consequently, internal audit used this assessment to prepare the 3 year rolling strategic plan and the annual operating audit plan. The committee monitored the significant risks faced by the company through reviewing risk reporting and participation in the risk assessment workshop. We are satisfied that significant risks were managed to an acceptable level.

CONCLUSIONS .....cont

Audited annual financial statements

 We have:

 Reviewed and discussed with management the audited annual financial statements; Reviewed and discussed with management the audited performance information

 We recommended that the Board approve the audited Annual Financial Statements.

APPRECIATION

The Committee members express their sincere appreciation to the Chief Executive Officer, Management, Internal Audit and the AGSA.

AG findings raised during 2011/12 year and controls in place

AG Finding raised Controls implemented

Bonus provision overstated (1 staff member resigned which was not amended in the provision calculation)

The bonus provision will be based on the actual number of staff as at 31 March

Completeness and existence of assets Monthly reconciliations between the general ledger and the asset register. Bi-annual asset verification and comparison to asset register.

Procurement management – Prospective supplier list is not compiled per commodity and type of service

SANEDI is in the process of appointing its own Procurement Officer; in the meantime the services of CEF (SOC) Ltd is used. CEF is in the process advertising to local and national newspapers to update the supplier’s database

 

AG findings raised during 2011/12 year and controls in place

 

AG Finding raised Controls implemented

Compliance – no strategic plan submitted for SANEDI due to transitional period of 18 months

The corporate calendar is updated regularly with the specified deadlines for submission of the first and second draft strategic plans

No supply chain management system developed and implemented

The Procurement Committee for SANEDI has now been established, the policy and procedures are in draft and should be approved within the next quarter

Procurement plan not submitted to NT The Procurement Committee for SANEDI has now been established, the policy and procedures are in draft and should be approved within the next quarter

AG findings raised during 2011/12 year and controls in place

 

AG Finding raised Controls implemented

Expenditure cut-off – invoices recognised in current year that related to previous financial year

The cut-off for capturing the current year invoices and accruals will be effectively communicated to all staff and appropriate follow-up actions taken

Annual financial statement disclosures SANEDI has now purchased the correct GRAP template from supplier to ensure the financial statements meet the GRAP standards