Briefing on GRAP 103 for Department of Arts and

Transcript:Briefing on GRAP 103 for Department of Arts and:
Briefing on GRAP 103 for Department of Arts and Culture entities 14 February 2017 Our reputation promise/mission The Auditor-General of South Africa has a constitutional mandate and, as the Supreme Audit Institution (SAI) of South Africa, exists to strengthen our country’s democracy by enabling oversight, accountability and governance in the public sector through auditing, thereby building public confidence. What we do and what we do not do Outline of the presentation Audit outcomes for 2015-16 Requirements of GRAP 103, Heritage assets Overview of heritage assets within the sector Challenges faced by the entities Challenges faced by the Auditor-General of South Africa Recommendations Audit outcomes for 2015-16 There was an overall regression in the audit outcomes for the Arts and Culture entities for the 2015-16 financial year. The major contributor to this regression was the fact that the requirements of GRAP 103, Heritage assets came into effect in 2014-15. This affected 38% (10) of the entities in the portfolio . Entities affected by this are as follows : 8 museums William Humphrey Art Gallery National Library of SA Requirements of the Standard – GRAP 103 Initial recognition : The cost of fair value can be measured reliably. Future economic benefits are expected to flow to the entity (par. 13). If an entity holds an asset that might be regarded as a heritage asset but which, on initial recognition, does not meet the recognition criteria of a heritage asset because it cannot be reliably measured, relevant and useful information about it shall be disclosed in the notes to the financial statements (par. 17). Measurement at recognition: A heritage asset that qualifies for recognition as an asset shall be measured at its cost. Where a heritage asset is acquired through a non-exchange transaction, its cost shall be measured at its fair value as at the date of acquisition (par. 24 and p25). . Overview of heritage assets within the sector Overview of heritage assets within the sector Overview of heritage assets within the sector Challenges faced by entities Funding from National Treasury is only available from 1 April 2017 and the cost of complying with the Standards outweighs the benefit. Different measurement techniques and experts are used. There is no clear guidance from the Accounting Standards Board and the National Treasury. Sustainability of entities to comply with the Standards after the one-off funding from National Treasury has been depleted. Availability of sufficiently skilled