Trust funds by the Department of Justice and Constitutional Development
4 July 2006
The Auditor-General (AG) today tabled a performance audit identifying
financial and administrative inefficiencies found in the Management of Monies
in Trust (MMIT) by the Department of Justice and Constitutional
Development.
The purpose of the report is to facilitate public accountability by bringing
to the attention of Parliament findings of the performance audit conducted into
the MMIT by the Department of Justice and Constitutional Development.
The audit revealed that maintenance and inheritance monies intended for the
poor, particularly women and children, was not being effectively managed by the
department. This was evident from the lack of defining regulations to regulate
the trust which annually receives almost R2 billion from maintenance,
inheritance and fine monies.
Furthermore the department did not ensure effective financial management,
which resulted in the following:
* a total of R134 million recorded as an "un-reconciled balance"
* an amount of R44 million recorded as a shortfall
* the accounts of 108 courts did not balance
* forty-one courts had missing or no records
* one hundred and twenty courts had no bank accounts.
Due to a lack of administration or enforcement of obligations in the Umlazi
and Khayelitsha magisterial districts 50 000 single parent women did not
receive maintenance monies due to them and/or their children. It was found that
no monitoring was undertaken to ensure that court orders were being honoured.
Unclassified monies (that is monies that have remained unclaimed in the trust
account for six months or longer) amounted to R6 million (12 403 cases).
After five years, the Financial Administration System (FAS) project for the
Justice Deposit Account System (JDAS) was not completed and the JDAS has been
only partially rolled out to only 25 of the 530 cash halls. It was consequently
still not possible to offer a financial footprint for monies received and
disbursed to the public at court level.
The accounting officer has indicated that the department has been working
for a number of years with the National Treasury to create a public private
partnership to leverage on the infrastructure of the financial sector and aims
to achieve full implementation in all South Africa provinces by December
2007.
"The promotion of economy, efficiency and effectiveness depends on adequate
management measures for the planning, budgeting authorisation, control and
evaluation of the procurement and utilisation of resources. The responsibility
to implement these management measures in managing the trust firmly rests with
the Department of Justice and Constitutional Development's management," AG
Shauket Fakie said.
The primary objective of performance auditing is to confirm independently
that these measures do exist and are effective and to provide management,
Parliament and other legislative bodies with information, by means of a
structured reporting process, on shortcomings in management measures and the
impact of these shortcomings.
"It is hoped that this report will give rise to corrective steps, which will
constructively contribute to the establishment and implementation of proper
management measures and controls in the administration of MMIT by the
department," Fakie added.
Enquiries:
Adri van der Merwe
Tel: (012) 426 8175
Cell: 082 787 5291
Email: adrivdm@agsa.co.za
Issued by: Auditor-General of South Africa
4 July 2006
Source: Auditor-General of South Africa (http://www.agsa.gov.za)
