'Unexplained Expenditure'
1 November 2007
The Minister of Arts and Culture, Pallo Jordan, has clarified confusion
around the Auditor-General's 'qualified report' which claimed R13 million
'unexplained expenditure' by the department. Minister Jordan has assured
parliament that "the qualified audit does not indicate the loss or destruction
of any of the assets of the Department of Arts and Culture."
This was in response to a question by Democratic Alliance's spokesperson on
arts and culture in the National Assembly, van der Walt. "The asset register
that was provided to the Auditor-General (excel worksheet) for audit purposes,
for the 2006/07 financial year, was a reconciled asset register which excluded
assets that were disposed of and or transferred during the previous year
(2005/06 financial year)."
"The asset register also excluded assets valued at less than R5 000,00 that
are not normally classified as capital in terms of the prescribed economical
classifications," said Minister Jordan. The Auditor-General, however audited
the asset register information as it was reflected on the computer system,
Asset pro software solution, which included assets that were disposed of or
transferred during the 2005/06 financial year as well as assets that are less
than R5 000,00 in value. In fact, the difference of R13,4 million between the
asset register and the amount disclosed in the financial statement relates to
the value of the disposals, transfers and assets of less than R5 000,00 in
value, that were still reflected on the register.
Significantly, the department moved offices from Oranje-Nassau Building in
December 2005. Thus new furniture was purchased for the new offices at the
Kingsley Centre in Arcadia. The transfer of assets was done due to the
devolution of the Western Cape archives regional office. But the department had
outsourced the business of generating reports for the asset register.
It was only in January 2007 that accurate information was downloaded to a
spread sheet for it to be reconciled in July. Unfortunately, the asset register
was not linked to the financial system and the department had only one user
license, Asset-pro system. This made it impossible to reconcile the asset
register and the general ledger on a monthly basis.
Significantly, the problems that were a result of this were made known to
the Auditor-General. But the former Director of Supply Chain Management who was
responsible for procuring the stand-alone system was duly suspended and has
subsequently left the department.
Since then the department has terminated the use of Asset-pro system. Asset
verification has been embarked on and the National Treasury has been approached
for assistance in implementing an integrated system, Logistical information
System (Logis),. The department will use this system as an asset management
system. In fact, this project will be finalised by end of November 2007 which
will be in time for the interim audit.
For any further enquiry please contact:
Sandile Memela
Spokesperson
Cell: 082 800 3750
Premi Appalraju
Media Liaison Officer
Cell: 082 903 6778
Issued by: Department of Arts and Culture
1 November 2007
Source: Department of Arts and Culture (http://www.dac.gov.za)
