Forensic Audit Presentation Portfolio Committee Cape Town 15 May 2007 Government Printing Works.
-
Upload
randolf-collins -
Category
Documents
-
view
218 -
download
1
Transcript of Forensic Audit Presentation Portfolio Committee Cape Town 15 May 2007 Government Printing Works.
Forensic Audit PresentationForensic Audit PresentationPortfolio CommitteePortfolio Committee
Cape Town 15 May 2007Cape Town 15 May 2007
Government Printing Works
BACKGROUNDBACKGROUNDFINANCIAL MISMANAGEMENT FINANCIAL MISMANAGEMENT
CONCERNSCONCERNS Ministerial decision to institute a forensic auditMinisterial decision to institute a forensic audit PFMA compliance on Tender processesPFMA compliance on Tender processes
LEADERSHIP LEADERSHIP
General leadership wantingGeneral leadership wanting
Financial PerformanceFinancial Performance
Auditor General’s successive disclaimersAuditor General’s successive disclaimers
2002/20032002/2003 2003/20042003/2004 2004/20052004/2005
Government Printing Works
PERIOD UNDER REVIEWPERIOD UNDER REVIEW
11stst April 2003 – 31 April 2003 – 31stst December 2004 December 2004
Tender awarded to Gobodo Forensic & Tender awarded to Gobodo Forensic & Investigative Accounting – 20Investigative Accounting – 20thth April 2005 April 2005
Government Printing Works
GOBODO’s MANDATEGOBODO’s MANDATE
Data interrogationData interrogation Identify, classify and investigate irregularitiesIdentify, classify and investigate irregularities
Forensic Accounting & Financial InvestigationForensic Accounting & Financial Investigation Review tender & procurement processesReview tender & procurement processes Asset management disposalAsset management disposal Perform due diligence investigation of key suppliersPerform due diligence investigation of key suppliers General financial managementGeneral financial management
Information SecurityInformation Security Review the security, integrity & confidentiality of infoReview the security, integrity & confidentiality of info Review program change controlsReview program change controls Review business continuityReview business continuity Review EFT transactions & cash paymentsReview EFT transactions & cash payments General review of computer systemsGeneral review of computer systems
Government Printing Works
FINDINGSFINDINGS
PECAS SystemsPECAS Systems (Printers Estimating (Printers Estimating Costing and Scheduling system) Costing and Scheduling system) violationviolation
SD K SD K Alpha - Alpha - Excessive procurementExcessive procurement 16 random samples between April 2003 and Dec 200416 random samples between April 2003 and Dec 2004 Irregular expenditure – R21,0mnIrregular expenditure – R21,0mn Violation of delegated authority – p58 art 6.18 & p75Violation of delegated authority – p58 art 6.18 & p75 Contraventions of section 45(b) & (c) PFMAContraventions of section 45(b) & (c) PFMA
SD K SD K BetaBeta Distribution not done “according to standard acquisition policy & Distribution not done “according to standard acquisition policy &
procedures” – R40,0mnprocedures” – R40,0mn Minutes and contracts missing!!!Minutes and contracts missing!!! Violation of delegated authorities – p57 art 6.17Violation of delegated authorities – p57 art 6.17 Contraventions of s 45(b) & (c) PFMAContraventions of s 45(b) & (c) PFMA
Government Printing Works
FINDINGSFINDINGS
REDUNDANT STOCKREDUNDANT STOCK
Gross Mismanagement of storesGross Mismanagement of stores
Consistent Overstocking (Treasury Regulation Consistent Overstocking (Treasury Regulation 10.1.1(b))10.1.1(b))
Late delivery by suppliers not penalisedLate delivery by suppliers not penalised
Damage to paper (TR 10.1.1(a))Damage to paper (TR 10.1.1(a))
Government Printing Works
FINDINGSFINDINGS
REASONS SUPPLIED FOR OVERSTOCKINGREASONS SUPPLIED FOR OVERSTOCKING
Latent defect in PECAS system re status of taskLatent defect in PECAS system re status of task
Improper calculation of paper needed – human Improper calculation of paper needed – human waste, consistent errors, etcwaste, consistent errors, etc
Lack of communication between operations and Lack of communication between operations and procurementprocurement
Late outsourcing of jobs – paper nevertheless procuredLate outsourcing of jobs – paper nevertheless procured
Urgent jobs not reflected on PECAS – system circumventedUrgent jobs not reflected on PECAS – system circumvented
Government Printing Works
FINDINGSFINDINGS
PAPER PROCUREMENT – SUPPLY CHAINPAPER PROCUREMENT – SUPPLY CHAIN
Significant difference in value btwn AFS and PECASSignificant difference in value btwn AFS and PECAS
2002/3 AFS raw material R 26,4; PECAS R 40,1m (paper) 2002/3 AFS raw material R 26,4; PECAS R 40,1m (paper)
2003/4 AFS raw material R 23,5m; PECAS R 35,4m (paper)2003/4 AFS raw material R 23,5m; PECAS R 35,4m (paper)
2004/5 AFS raw material R 23,2m; PECAS R 29,5m (paper)2004/5 AFS raw material R 23,2m; PECAS R 29,5m (paper)
SIU could not confirm accuracy and validity of inventory SIU could not confirm accuracy and validity of inventory amounts reflected on AFS - documents lostamounts reflected on AFS - documents lost
Contravention of TR 10.1.2 Contravention of TR 10.1.2
Government Printing Works
FINDINGSFINDINGS
CONTRAVENTION & VIOLATION OF CONTRAVENTION & VIOLATION OF PFMAPFMA
Security of recordsSecurity of records
Lack of controls within Procurement Lack of controls within Procurement Division Division
Government Printing Works
STATUS REPORTSTATUS REPORT
SUSPENSIONSSUSPENSIONS
INVESTIGATIONS HAVE BEEN INVESTIGATIONS HAVE BEEN EXTENDEDEXTENDED
Government Printing Works
MEASURES PROPOSEDMEASURES PROPOSEDPROPOSED DISCIPLINARY MEASURESPROPOSED DISCIPLINARY MEASURES
Charge Sheets issued to several individualsCharge Sheets issued to several individualsGross mismanagementGross mismanagementDereliction of dutyDereliction of dutyViolation of tender proceduresViolation of tender proceduresLack of duly delegated authority to procure any goodsLack of duly delegated authority to procure any goodsAll actions All actions ultra viresultra vires – TR 8.2.1 – TR 8.2.1PFMA 38(1)(h)(iii)PFMA 38(1)(h)(iii)Total of Irregular expenditure of R66,0mnTotal of Irregular expenditure of R66,0mn
Irregular expenditure – R1,5mnIrregular expenditure – R1,5mn Irregular expenditure – R3,0mnIrregular expenditure – R3,0mn Signed replenishment advises without written Signed replenishment advises without written
delegationdelegation
Be charged according to the precepts of the PFMA & Be charged according to the precepts of the PFMA & TRTR
Criminal and Civil charges be considered Criminal and Civil charges be considered
Government Printing Works