Annual Report 2011

1. Annual Report 2011

2. Establishment and operations Constitution Minister of Finance Public Audit Act Public Finance Management Act Other legislation National Treasury Auditor-General

3. Establishment and operationscont’d… • 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 by introducing GRAP

4. Functions of the Board • Promote transparency • Effective financial management • Set Standards of GRAP (PFMA s89) • Publish guidelines & directives • Recommend implementation dates • Standards of GRAP = • Standards & Interpretations • Directives • Guidelines REAL

5. Functions of the Board cont’d… • 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

6. Board members • 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

7. Internal structure Board Role of Standard Setter Role of Accounting Authority Secretariat Audit Committee Management Committee Project groups Shared with National Treasury External parties Not remunerated

8. Interaction with key role players Approve effective dates for Standards of GRAP Minister of Finance Implement Standards of GRAP 2 Auditagainst Standards of GRAP National Treasury 3 Auditor-General 4 Representation on Board & Trilateral Representation on Board & Trilateral Set Standards of GRAP 1

9. How do we set Standards?

10. Phase I - Research and develop proposed Standard Phase II - Focused Stakeholder consultation & amendments to proposed Standard Phase VIII – Application & implementation (ASB: accounting forum, FAQs, review and amendment (improvements project) - Secretariat - Project groups (technical & subject experts) - Secretariat Phase III - Approve Exposure Draft Standard setting process Phase VII - Consult on effective date Propose effective date Develop transitional provisions - Board (AGSA and OAG represented) Phase IV - Public consultation - Workshops & Roundtables (treasuries, professional bodies, PAGs, CFO Forums) -Trilateral parties Phase VI - Approval of Standard Phase V - Focused consultation on comments & amend Standard - Board (AGSA and OAG represented) - Project groups (technical & subject experts)

11. Setting Standards of GRAPcont’d… • 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

12. Setting Standards of GRAPcont’d… Is there an existing IPSAS? Yes No Is there an existing IFRS? Develop an ED of a proposed Standard of GRAP No Yes Consider any improvements made by the IASB to the relevant IFRS; legislation & local circumstances; reduce complexity Develop a Discussion Paper (DP) Develop Exposure Draft (ED) of a proposed Standard of GRAP

13. 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

14. 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

15. 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

16. Who has adopted so far?

18. Application of reporting frameworks 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

19. Application of reporting frameworkscont’d… 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

20. Progress to date…

21. Pronouncements to date • Standards • 32 approved by Board • 5 awaiting approval by Minister • 16 Interpretations • 1 Guideline • 9 Directives

22. Current work programme

23. Local projects • Public sector specific financial instruments • GRAP for GBEs • Principal-agent activities • Living and other naturally occurring resources • Public Private Partnerships • Post implementation reviews

24. International projects • Conceptual framework • Financial statement discussion & analysis • Long term sustainability of an entity’s finances • Service performance information • GFS

25. Thank you