by the Trust that handled the finances of the Africa Cup of Nations in
Mali
21 May 2007
The Auditor-General (AG) today tabled qualified financial statements of the
Trust that handled the finances of the 23rd Africa Cup of Nations.
The continental football tournament was held in Mali from 19 January to
February 2002. The AG audited the Trust's financial statements for the period
21 December 2001 to 31 December 2003.
The Trust, which no longer exists, was appointed following a visit to Mali
by President Thabo Mbeki. While in that country, the President pledged support
to the Mali government for the tournament.
The support was provided jointly by the Departments of Sport and Recreation,
Foreign Affairs and Transport. The Department of Sport and Recreation was
tasked with co-ordinating and facilitating the support by the relevant South
African government departments. Trustees, consisting of individuals
representing donors in the private and public sectors were appointed to manage
the project.
Funding for the project came from private sources as well as the South
African government. State funding flowed from the Treasury to the Trust on
application by the Minister of Sport and Recreation to the Minister of Foreign
Affairs. Private sector funding did not flow through the trust account but were
paid by the donors directly to the suppliers.
Says Africa Boso, Auditor-General Spokesman: "The activities of the Trust
were audited at the request of the Minister of Finance. The audit was conducted
in accordance with South African Auditing Standards to obtain reasonable
assurance that the financial statements are free of material misstatement."
Amongst others, the report highlighted the following: Delivery of goods and
services amounting to approximately R32 million were mostly delivered in Mali
and no documentation providing proof or acceptance of delivery could be
supplied by the Trust.
Although invoices substantiating the expenditure were provided by the Trust,
the Auditor-General cannot conclude whether the goods and services paid for,
were in all instances actually received and that value for money was received.
Invoices not approved for payment. In terms of the Deed of Trust, the trustees
are required to approve invoices for payment. During the audit it was noted
that invoices and in some instances electronic fund transfer documentation for
payment to suppliers totalling R6 384 715 had not been approved.
Tender processes
The Trust could not provide any documentation regarding the tender policy or
process to be followed to decide on potential service suppliers for the
tournament. In all instances there was no documentary evidence that more than
one quotation/tender was solicited and obtained.
Furthermore, quotations were accepted and approved by the Minister of Sports
and Recreation and not the trustees. In some instances, this happened although
the Trust Deed had already been signed on 21 December 2001. No acceptance
letters could be provided for two quotations amounting to R353 424, and in
three instances totalling R1 446 025, no quotations could be provided by the
Trust.
Fruitless and wasteful expenditure
Due to insufficient funds in the Trust bank account, certain invoices were
paid late. This resulted in the Trust incurring interests amounting to R276
285, which is considered to be fruitless and wasteful expenditure as defined in
section 1 of the Public Finance Management Act (PFMA). Furthermore, the payment
of interests was not approved by the trustees.
A payment of R124 922 was made to a service provider for transport costs
related to the supply of motor vehicles for use in Mali. The vehicles were not
delivered to Mali as similar vehicles were sourced from a neighbouring country
to Mali. This resulted in the Trust incurring fruitless and wasteful
expenditure as defined in the PFMA.
Internal controls
The trustees did not implement proper internal controls. This contributed to
the following:
* Only two trustees actively participating in the administration of the
Trust and the approval of invoices for payment despite 11 trustees having
signed the Trust Deed. They were therefore jointly responsible for the
administration of the Trust. No formal meetings were held by the Trust to
either approve payments and/or agree on administration or written delegations
of the Trust.
* There were no written delegations for the approval and payment of
invoices.
* There was no indication of which Trustees had been registered as signatories
for the Trust bank account.
* There was no official policy regarding the payment of invoices exceeding a
certain limit.
* Bank reconciliations were not performed on a timely basis.
* Bank reconciliations were not reviewed and approved by an independent
person.
* Standard working procedures, practices and policies were not formalised and
documented during the meetings of the Trustees.
Media note:
A complete version of the Auditor-General report to the trustees on the
financial statements of the 23rd Africa Cup of Nations in Mali Trust for the
period 21 December 2001 to 31 December 2003 is available on our website:
http://www.agsa.co.za
Enquiries:
Africa Boso
Tel: 012 426 8273
Cell: 082 889 9527
E-mail: africab@agsa.co.za
Issued by: Office of the Auditor-General
21 May 2007
Source: Office of the Auditor-General (http://www.agsa.co.za)
