FINANCE WEEK PRESENTATION

CONTENTS1. Basis of qualification2. Risk Management 3. Potential internal control threat/deficit4. How to enhance current internal control

systems5. Conclusion

1. Basis of qualificationAsset Management1. Municipality is being qualified on movable

asset register and the point of emphasis was usage of fair value/DRC for assets acquired pre-June 2009.

2.Technical interpretation of directive 7 and different understanding on application between the auditor and the auditee.

Supply chain management1. Non adherence to SCM which lead to

incurrence of irregular expenditure.

Risk Management processInadequate risk management processes which

lead to internal control deficit in the SCM.Risk management processes failed to identify

full GRAP adoption as the catastrophic risk.Major finance risks not picked up by risk

management processes.Too much focus on non finance risks and

minimal focus on finance risksBoth strategic and operational risks did not

address the potential internal control threat .

Potential internal control threat/ deficitLack of pro-active internal measures to

detect SCM related deficiencies Non compliance to SCM regulationsPotential abuse of SCM processesNon alignment of policy imperativesDifferent interpretation and/or

misinterpretation of statutes and policy frameworks

Lack of due diligent mechanisms

How to enhance the current internal control systems Putting proactive internal control mechanisms on SCM e.g. screening of

all the suppliers listed in the database prior implementation of database. Put early warning mechanisms to identify possible irregular expenditure

and report them for possible correction. Regular review of internal control systems and alignment of policies . Make use of internal audit to monitor the internal control risks and

weaknesses. Pay attention to audit action plan and no need to avoid moving targets. Implementation of MPAC and audit committee resolutions Engage AG to perform the interim audit on issues raised in the previous

audit. Adequate management of assets which are 100% GRAP compliant Alignment of municipal asset management policy with ASB directives. Treating asset management as a discipline and continuous process not as

a once off event. Strengthening of relationship with key oversight stakeholders ,i.e. Auditor

General ,MPAC, Internal Audit and Audit Committee

CONCLUSIONProper planning, organising, leading and control is the only solution to sustainability of any institution.