Annual Report 2011

ConstitutionConstitution

Public Audit Act

Public Audit Act

Public Finance Management

Act

Public Finance Management

Act

Other legislation

Other legislation

Minister of Finance

Establishment and operations

National TreasuryNational TreasuryAuditor-GeneralAuditor-General

Constitution requires measures to ensure: Transparency Expenditure control

PFMA Chapter 11 established Board Executive Authority = Minister of Finance ASB regulations issued? By Minister Juristic person Own operating procedures Funded National Treasury transfer payment

Establishment and operationscont’d…

by introducing GRAP

Promote transparency Effective financial management Set Standards of GRAP (PFMA s89) Publish guidelines & directives Recommend implementation dates Standards of GRAP =

Standards & Interpretations Directives Guidelines

Functions of the Board

REAL

Set Standards of GRAP for:

- Departments

- Trading Entities from 2013

- Public Entities since 2009

- Constitutional Institutions since 2009

- Municipalities & their entities

cities 2008 | others 2012

- Parliament and legislatures since 2010 GBEs apply IFRS

Functions of the Board cont’d…

10 appointed by Minister after consultation with AGSA Appropriate mix of skills AGSA | OAG | Audit firms | municipalities

national/provincial government | others Chairperson Individual capacity, except AGSA & OAG Non-executive | independent | part time Meeting attendance remuneration

determined by Minister

Board members

Board Board

Secretariat Secretariat Project groups Project groups

Audit Committee

Audit Committee

Management Committee

Management Committee

Role of Accounting Authority Role of Standard Setter

Shared with National Treasury

External partiesNot remunerated

Internal structure

Minister of FinanceMinister of Finance

National TreasuryNational Treasury Auditor-GeneralAuditor-General

Representation on Board & Trilateral

Representation on Board & Trilateral

Audit against Standards of GRAP

ImplementStandards of GRAP

Approve effective datesfor Standards of GRAP

Set Standards of GRAP

2

34

Interaction with key role players

1

How do we set Standards?

Phase I - Researchand develop

proposed Standard

Phase II - Focused Stakeholder consultation

& amendments to proposed Standard

Phase IV - Public consultation

Phase III - Approve Exposure Draft

Phase V - Focused consultation on comments & amend Standard

Phase VI - Approval ofStandard

Phase VII - Consult on effective datePropose effective dateDevelop transitional provisions

- Secretariat- Project groups

(technical & subject experts)

- Workshops & Roundtables

(treasuries, professional bodies, PAGs, CFO Forums)

- Board (AGSA and OAG represented)

-Trilateral parties

Phase VIII – Application & implementation(ASB: accounting forum, FAQs, review and amendment (improvements project)

- Secretariat

Standard setting

process

- Project groups (technical & subject experts)

- Board (AGSA and OAG represented)

Use pronouncements by national & international standard setters

PFMA requires ASB to consider: – best accounting practices

– capacity of relevant institutions ASB also considers:

– RSA legislative framework

– recent developments in pronouncements

Setting Standards of GRAPcont’d…

Develop an ED of a proposed Standard of

GRAP

Develop an ED of a proposed Standard of

GRAP

Is there an existing IPSAS?

Is there an existing IPSAS?

YesNo

Is there an existing IFRS?

Is there an existing IFRS?

Consider any improvements made

by the IASB to the relevant IFRS; legislation & local

circumstances; reduce complexity

YesNo

Develop Exposure Draft (ED) of a proposed Standard of GRAP

Develop Exposure Draft (ED) of a proposed Standard of GRAP

Develop a Discussion Paper (DP)

Develop a Discussion Paper (DP)

Setting Standards of GRAPcont’d…

GRAP based on IPSAS or IAS Amendments to IPSAS when:

– revision of international standards– fundamental issues– alternative treatments in international or

national standards– statutory authority– disclosure requirements– simplification

Setting Standards of GRAPcont’d…

Develop core set of Standards

Representation of stakeholders on project groups to advise on development of ED

Insufficient material available? Project group assists DP development ED based on comments / input on DP

Setting Standards of GRAPcont’d…

How do we determine our Standard-setting agenda?

Consultation with Minister develop a “core” set of Standards

Feedback from stakeholders Ongoing assessment with trilateral parties

ASB | OAG | AGSA Monitor international developments

IPSASB | IASB

Setting Standards of GRAPcont’d…

Who has adopted so far?

Adoption of our Standards

Entity Framework Date

National and provincial departments

Modified cash Adoption pending implemented of IFMS

National and provincial agencies

Accrual Since April 2009Previously applied local equivalent of IFRSs

Parliament and provincial legislatures

Accrual Since 1 April 2010Previously applied modified cash

Legislatures – accrual and modified cash

VariedPreviously applied modified cash

Municipalities and their entities

Accrual Since 1 July 2008/2009 Previously applied fund accountingFull compliance expected for all by 30 June 2012

Standards of GRAP applies to: Departments National and Provincial Public Entities Constitutional Institutions Trading Entities as defined in the PFMA Municipalities, boards, commissions,

companies, corporations, funds, entities under ownership control

Parliament and provincial legislatures

Application of reporting frameworks

Statements of GAAP are GRAP for:

Government Business Enterprises [GBEs]as defined in the PFMA Any other entity whose ordinary shares,

potential ordinary shares or debt are publicly tradable

except a municipality Entities under ownership control of above

Application of reporting frameworkscont’d…

Progress to date…

Standards 32 approved by Board 5 awaiting approval by Minister

16 Interpretations 1 Guideline 9 Directives

Pronouncements to date

Current work programme

Public sector specific financial instruments GRAP for GBEs Principal-agent activities Living and other naturally occurring

resources Public Private Partnerships Post implementation reviews

Local projects

Conceptual framework Financial statement discussion & analysis Long term sustainability of an entity’s

finances Service performance information GFS

International projects

Thank you