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This presentation reviews Department of Water Affairs and Forestry's financial management, steps taken for improvement, and plans for better compliance with fiscal policies towards rural development. Includes audits, restructuring, capacity building, and policy adherence.
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Presentation to the Portfolio Committee Public Hearings Annual Report Department of Water Affairs and Forestry 16 October 2006
THEME Socio-economic growth and service delivery towards rural development
Overview by the Director-General • Auditor General ’s report on 2004/05 and 2005/06 Financial Statements • concern w.r.t. financial management and general finance capacity of DWAF • Steps taken to place Financial Management of DWAF on firmer footing include: • Restructuring of Finance in national and regional offices and recruitment of Senior Management Staff • Appointment of Professional Services Providers to supplement DWAF capacity • Implementation of SAP as the preferred ERP system • Extensive capacity building and training programmes • Implementation of asset management strategy • Engagement with and support from Office of Accountant General • Engagement with and support from Office of Auditor-General • Actions were initiated in latter half of 2005/6 • did not have significant impact 2005/06 audit • expecting significant change during 2006/07 financial year
Overview by the Director-General • Audit highlighted “irregular” and “unauthorized” expenditure • items were disclosed by DWAF in terms of disclosure notes (Notes 10 and 27) • Preliminary investigations indicate • no “fruitless and wasteful expenditure” • no contravention of tender procedures • no necessity to recover funds • Carrying out further investigations • will take appropriate action in terms of Section 51 of PFMA • Policy Framework in place but needs to be refined • non adherence to policy framework due to: • unclear business structures (being dealt with through restructuring), • lack of capacity (staff working on both Main and Trading Accounts, functions have been segregated), • lack of financial management skills (being addressed bringing in temporary skills and focussed training programmes) • Programme of action has been developed and will be implemented to ensure that Municipalities comply with reporting requirements of Division of Revenue Act (DoRA)