Department of Infrastructure Development Annual Report 2021-2022

ANNUAL REPORT 2021 | 2022

9. PRIOR MODIFICATIONS TO AUDIT REPORTS The Department has established an internal control function to ensure effective and efficient management of audit queries and implementation of action plans to respond and address audit matters, queries, control weaknesses raised by the Auditor-General South Africa (AGSA). The below table illustrate nature of qualification, disclaimer, adverse opinion and matters of non-compliance indicating the financial year in which the matters was initially raised and the progress made in clearing and or resolving the matter.

Nature of qualification, disclaimer, adverse opinion and matters of non-compliance The financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework as required by section 40(1)(b) of the PFMA (1999, as amended). Material misstatements of some disclosure items identified by the auditors in the submitted financial statements were corrected, resulting in the financial statements receiving an unqualified audit opinion. Some contractual obligations and money owed by the department were not settled within 30 days or an agreed period, as required by section 38(1)(f) of the PFMA (1999, as amended) and Treasury Regulation 8.2.3 Effective and appropriate steps were not taken to prevent irregular expenditure as disclosed in notes to the financial statements, as required by section 38(1)(c)(ii) of the PFMA (1999, as amended) and Treasury Regulation 9.1.1

Financial year in which it first arose

Progress made in clearing / resolving the matter

2013/14

The Department has significantly reduced the number of material misstatements reported over the years through the assistance of the provincial treasury. Only one item of material misstatement was reported during 2020/21 audit.

2013/14

A new payment process was introduced to reduce the turnaround time it takes to process supplier payments. The Department has also established a Payment War Room to fast-track payment of suppliers within 30 days. Compliance reviews are conducted through the internal control function to ensure that the Department complies with procurement regulations. This process has assisted the Department in ensuring that non-compliance is detected and corrected early.

2013/14

10. INTERNAL CONTROL UNIT The Internal Control function within the DID is tasked with the responsibility of maintaining sound internal control environment, assisting the department to implement effective governance frameworks, and facilitation of compliance driven culture within the organisation. The Internal Control unit assisted the Department in developing an Audit Improvement Plan (AIP) to address internal control deficiencies identified during audits conducted by both Gauteng Audit Services (GAS) and the AGSA. During the 2021/22 financial period, the Internal Control Unit supported the Department in developing and implementing audit action plans designed to strengthen internal control structures and processes for financial reporting, supply chain management, and performance management in response to findings and recommendations of the Auditor-General and Internal audit. The following internal control assessments were also conducted:

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Assessment of integrity and reliability of financial and non-financial reports.

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Compliance reviews with all applicable legislations, policies and procedures.

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Review of interim Financial Statements and performance reports.

• Review of Immovable Asset Register to ensure completeness and safeguarding of departmental immovable assets.

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DEPARTMENT OF INFRASTRUCTURE DEVELOPMENT