21 June 2006
The Department of Labour has embarked on a comprehensive turnaround strategy
aimed at addressing the plight of the people in sheltered employment, the
Standing Committee on Public Accounts (SCOPA) was told in parliament today
(Wednesday).
Early in 2005, the Auditor General had ordered a high-level investigation
and a detailed audit of the Sheltered Employment Factories (SEF), and the
findings were generally characterised by unresolved legal status of the SEF,
lack of formal policies and procedures.
Inappropriate application of Accounting Standards (GAAP and GRAP),
inadequate staff complement with the requisite training and experience in
financial management were among problems identified.
The progress made in correcting the inadequacies include, analysis on the
legal status of SEF, sound financial policies and procedures, reviewed
accounting processes in line with GAAP, and the revised delegations of
authority.
The major interventions planned for the immediate future include the review of
alternatives for restructuring the SEF to define its legal personality and
obtain approval from the Minister of Labour to implement the recommended
option.
Other plans include mounting a focussed campaign to collect long outstanding
debts from government and provincial departments.
Also on the cards is initiating a project to determine the requirements to
comply with GAAP / GRAP, conclude all outstanding investigations into irregular
conduct and ensure that the necessary disciplinary action is completed.
Parliament also heard of the initiative to structure the management accounts
in order to provide meaningful information for planning and control, especially
to address the correct calculation of cost of sales, product costing and
pricing, and the allocation of manufacturing costs and overheads to factories
(business units) and product categories.
Also in the pipeline is ensuring that the crucial IT project is in place,
Scopa heard.
Meanwhile, the Department of Labour entity, Unemployment Insurance Fund
(UIF) was taken off SCOPAâs list due to its impressive turnaround strategy.
Enquiries:
Mokgadi Pela
Cell: 082 808 216
Issued by: The Department of Labour
21 June 2006
