In response to commitments made to parliament and oversight authorities, the Department of Justice and Constitutional Development requested the Standing Committee on Public Accounts (Scopa) for an opportunity to provide a progress report on the developments and achievements in the management of Third Party Funds (TPF).
Enhancing TPF and adherence to clean governance of this fund was clearly articulated by Minister Radebe in his December 2009 Directive that all departmental accounts need to obtain unqualified audits.
In the 2010/2011 strategy, the department committed to achieving unqualified audit opinion from the Auditor-General. One of the areas of the qualification was TPF, the department has also prioritised service deliver for people who are vulnerable and are not in conflict with the law.
TPF, commonly known as Monies in Trust, refers to the collection and management of maintenance monies received on behalf of beneficiaries, court fines, bail monies, deeds transfers and debt collections on behalf of government. These monies are paid into the 474 courts and 11 state attorney offices across the country. In this fund the department manages annual receipts of approximately R3 billion and manages maintenance payments to 250 000 beneficiaries on a monthly basis.
The department initiated a turn-around strategy to improve accountability on the TPF which include the presentation of credible financial statements. The turn-around strategy was occasioned by the fact that from 1994/1995 the department did not submit annual financial statements for TPF, and when it did those statements where disclaimed. This posed a huge challenge for the justice vote account, as a disclaimer or qualification in the TPC resulted in the qualification of the overall justice vote account.
The project turnaround is intended at addressing service delivery and has the following elements:
- Credible baseline financial reporting,
- Capacitation and training,
- Business process reviews to enhance service delivery, and
- Legislative review to enhance governance
In consultation with the office of the Accountant-General of the National Treasury, and the Accounting Standards Board, the department concluded a financial reporting framework which defines the reporting requirements. Through this process, the department managed to deliver financial statements for each of the 474 courts and 11 state attorney offices.
The department has now successfully concluded the financial statements for 2009/10 and 2010/11 and presented these to the Auditor-General on 19 March 2011. This includes a review and a recording of nearly 40 million transactions.
The department is ready to submit the financial statements for 2011/12 – and awaits the audit outcome for the financial statements of the prior years. This will inform the need for final technical adjustment needs to be effected. The department is confident that the technical work concluded on these accounts will be the basis to clear the only qualification of the vote.
By concluding the financial statements per court, the department is now able to direct its oversight and control activities and interventions to the identified courts with shortfalls.
The department is entrenching accountability on TPF as a critical component of its business and has placed the accountable for these funds at the highest level, which is from the Director-General, Deputy Director-General, and regional heads; right to the court clerks.
The department is committed to ensure that incidents of misappropriation of funds are dealt with. In the 2011/2012 financial year the department has investigated 68 cases of fraud and corruption involving R2,6million out of this amount R2,1million has been recovered, and over R530 000 is still outstanding.
To enhance service delivery, the department initiated a court level electronic payment system where beneficiaries are now receiving the maintenance monies directly into bank accounts. This system is deployed in 135 courts and 102 000 beneficiaries are now receiving their monies within 24 to 48 hours after identification of deposits within the Third Party Funds.
The department’s priority is to pay maintenance timeously and accurately to the beneficiaries who are generally minor children and people living with disabilities. The aim of the service delivery improvements is for people to spend less time in queues in the courts and that the department contributes towards poverty alleviation.
The department is confident that it will clear the audit qualification on this account whilst new efficiency measures will be introduced. These include, additional services channels, lean management practices, to ensure enhanced service delivery and accountability.
For more information contact:
Mthunzi Mhaga
Cell: 072 198 6863
E-mail: MCMhaga@justice.gov.za
