EPIP AUDIT INTERVENTION PLAN 20182019 OUTLINE OF THE PRESENTATION EPIP Summary of Findings Audit Intervention: Current Projects Audit intervention: New Projects (Future) EPIP summary audit Findings for 20172018 Non-disclosures in the
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Presentation Transcript
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EPIP AUDIT INTERVENTION PLAN 2018/2019<br>
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OUTLINE OF THE PRESENTATION EPIP Summary of Findings
Audit Intervention: Current Projects
Audit intervention: New Projects (Future)<br>
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EPIP summary audit Findings for 2017/2018 Non-disclosures in the Departmental Financials
Project bank balances at the end of the financial year not recorded as pre-payments
Irregular expenditure at the project level not disclosed in DEA’s financials
Interest earned in projects not disclosed as additional revenue to DEA
Unrelated costs such as marketing and others incurred at project level are included in infrastructure cost in the Department’s books
Operational findings
No PPE or WIP is disclosed in the project financials
SCM processes not followed at project level
No evidence that Service Providers/Suppliers were rotated on appointment<br>
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Disclosure findings
Monthly report to finance to be improved to include project bank balances
The project audit templates to be reviewed to ensure that PPE and/or WIP, Bank Balances, Interest earned, fruitless, wasteful and irregular expenditure are disclosed for further disclosure in the Departmental financials
The above to be included in the consolidated AFS by the Principal auditor
Training of Implementer Accountants and Panel of Auditors
Operational Findings
Procurement planning and reporting templates to be developed and complied to
Implementers will be required to develop procurement plans and monthly reports
Officials and Implementers to be trained on SCM
Conduct quarterly thorough admin inspections to ensure compliance
Quarterly procurement reports to be submitted and signed off by the Directors
EPIP will ensure that each Implementer advertises locally for establishment of panels and that service providers are rotated
Deviations to be approved with proof of having tested the market
No payment shall be processed by the PPM’s without the prerequisite proof of SCM having been followed based on source documents Audit Intervention measures on Old Contracts Issued before 31/03/18<br>
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Option 1
Appoint auditors from the panel as internal auditors rather than external auditors to ensure compliance
AG comes as an external auditor
Option 2
Two pronged approach to the appointment of auditors
Appointment of auditing firms from the panel in the form of accountants to ensure compliance
Appointment of auditing firms from the panel as external auditors Mid-term Audit: Proposed Approach<br>
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AUDIT INTERVENTION ACTION PLAN<br>
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Panel of service providers for different categories (construction, project management, built environment professionals and training) were established following Treasury Regulation 16 A (SCM)
Service providers to be appointed using quote system as independent contractors (not Implementing Agents)
Specifications per project will be developed so as to source quotations
Infrastructure projects will be designed and supervised by Built Environment Professional Consultants
Construction will be done by CIDB accredited contractors and they will be paid separately so that Management Fees can be separate from construction costs
Accredited Training and Environmental Protection Service providers shall be appointed through the quote system from the panel
Participants to paid through Postbank
Industry contracts such as JBCC, GCC and PROCSA will be used to avoid ambiguity on the relationship between DEA and the Service Providers
No advance payments will be made as DEA will only pay for actual work done by the Service Providers. Audit Intervention measures for contracts entered after 31/03/2018: New Projects<br>
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There will be no need for opening of project dedicated accounts, procurement guides, project financial statements and audits at the project level.
Value for Money (VFM) or Performance audits to be conducted to confirm that project objectives were met as per agreed cost, quality and quantity.
There will be a direct relationship between money transferred and WIP as the Department will only pay for actual work done.
Need to reclassify the budget from Transfers to Goods and Services (Capital and Current) for payment of Service Providers.
Wages or Beneficiaries stipends payable through Post Bank to remain as Transfers
Infrastructure projects to be included in DEA’s books and be transferred following section 42 b process. Audit Intervention measures for contracts entered after 31/03/2018 New Projects<br>
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SCM Process – New Projects ENLISTMENT & USE OF PANELS Appointment of Bid Spec & Evaluation Committees Establishment of a Bid Spec & Evaluation Committees Evaluation Advertisement for panels Briefing Session for Providers Enlistment and Publishing on Govt Gazette (E- Tender) IMPLEMENTATION Development of ToR/ Spec for each project Presentation to the DAC Approval by the DDG Source Quotations & Proposals Evaluation Presentation to the DAC Approval by the DG (Quantum) Publication / Gazetting<br>
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RECOMMENDATION Note the two approaches (Current Projects & New Projects)
Consider the new approach including budget reclassification to make accounting easy.<br>
