Department of Infrastructure Development Annual Report 2021-2022

ANNUAL REPORT 2021 | 2022

Resolved (Yes/ No)

Yes

Yes

Resolution No. Subject Details Response by the Department 5 Annual Financial Statements

Kindly note that the percentage of valid invoices for service providers settled within 30 days is now in the 2021/22 Annual Performance Plan with the target of 75% annually, as well as 75% each quarter. Over and above in line with Revised Framework for Strategic Plans and Annual Performance Plans, Annual Operational Plans (AOPs) are developed and used as a

management tool to inform performance agreements. Therefore, this indicator or target has been cascaded to Departmental Operational Plans which are aligned to all Managers/ SMS Performance Agreements. In the AOP the target is 100% submission of payment documents to Finance within 7 days of receipt from service providers. Lastly, the AOP has activities that ensure follow-ups with the service providers are done to ensure that all invoices are paid within 30 days.

The Department has developed a 30-days payment plan that clearly stipulate the target and timelines as to when the set target will be achieved. A Payment War Room has been established to deal with long outstanding invoices in the system and progress is presented and discussed in the Auditor-General War Room on weekly basis.

The payment process between client department and the DID was reviewed to incorporate the proposed payment strategy. The Department has achieved 70% of their annual target with regard to payment of invoices within 30 days that relates to the DID only. The Department is also looking at the option of creating Inter-departmental account to deal with either advance transfer or overdraft facility to settle all invoices that are due within 30 days. Part of the improvement plan includes accountability at the Senior Management level by incorporating 30 days payment into their performance agreements. The Department will continue to provide training to the service provider on how to upload invoices on EIS.

The current team in Finance that prepares the Financial Statements, have the necessary qualifications for the purpose of compiling the Financial Statements. The notes are prepared by one official and then submits for review to the supervisor. The supervisor uses the accounting assertions for completeness, accuracy and existence.

After the supervisor has checked the respective note, he/she will then sign it off and submit the copy to the file. The file will then be submitted to the Deputy Director, Director, Chief Director and the Chief Financial Officer for reviews.

A complete file will then be submitted to Gauteng Treasury and Internal Control for reviews. Upon completion of reviews by both Internal Control and Gauteng Treasury, they will forward a report with comments and all the recommended changes would be effected on the financial statements and a copy of the revised set of financial statements would be shared with all parties. The Financial statements would then be submitted to the Gauteng Treasury for submission to the Auditor-General.

That the Department must provide the Committee with a progress report detailing the effectiveness of the inclusion of the 30 days payment as a target in its Annual Performance Plan to address the delays in paying service providers by 31 July 2021 and every quarter continuing up until the end of June 2022.

The Department must provide the Committee with a progress report detailing the

effectiveness of the dedicated team to prepare the interim financial statements during the year, as well as the annual financial statements by 31 July 2021 and a quarterly progress report continuing up until the end of June 2022.

6 Thirty (30)

days payment

68

DEPARTMENT OF INFRASTRUCTURE DEVELOPMENT

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