REPORT TO THE PARLIAMENTARY PORTFOLIO COMMITTEE ON THE

FINDINGS OF THE AUDITOR GENERAL AND THEIR RECOMMENDATIONS ON

THE ANNUAL REPORT

AUDIT FINDINGS ON THE SADPMR ANNUAL REPORT, RECOMMENDATIONS AND MITIGATIONS BY MANAGEMENT

FINDING 1

Irregular expenditure – failure to advertise the Internal Audit and Consulting Services

Recommendation

Request for ratification from the Department of National Treasury

ACTION

A letter requesting for ratification of the irregular expenditure was prepared and sent to the National Treasury on 29th April 2010.

AUDIT FINDINGS ON THE SADPMR ANNUAL REPORT, RECOMMENDATIONS AND MITIGATIONS BY MANAGEMENT

FINDING 2

Donations that were received on behalf of the Department of Mineral Energy

Recommendation

Regulator to communicate the contravention with the DME and recommend that the unspent portion of the sponsorship received be paid into the relevant revenue fund.

ACTION

The Regulator no longer receives donations on behalf of the DME. The account has also been closed.

AUDIT FINDINGS ON THE SADPMR ANNUAL REPORT, RECOMMENDATIONS AND MITIGATIONS BY MANAGEMENT

FINDING 3

Irregular expenditure on the opening of an account

Recommendation

The Regulator to pay the unspent portion of sponsorship amount into a relevant revenue fund.

ACTION

The account was closed as at 30th March 2010

AUDIT FINDINGS ON THE SADPMR ANNUAL REPORT, RECOMMENDATIONS AND MITIGATIONS BY MANAGEMENT

FINDING 4

Major decisions were taken without the formation of a quorum. (Audit Committee)

Recommendation

Confirmation of a quorum should be included as part of the agenda for each meeting and the Chairperson should verify that the quorum as per Charter has been met.

Charter must be reviewed to ensure the committee is able to meet its requirements in terms of its composition.

ACTION

The audit charter was amended as per the recommendation.

All audit committee meetings held during the 2009/2010 financial year met quorum requirements.

AUDIT FINDINGS ON THE SADPMR ANNUAL REPORT, RECOMMENDATIONS AND MITIGATIONS BY MANAGEMENT

FINDING 5

Non compliance with legislation

5.1 Risk assessment not performed

Recommendation

The risk register be prepared as per the risk management plan of the SADPMR and be regularly reviewed and updated.

ACTION

A risk assessment has been prepared. The divisional risks and top ten organisational risks have been sent to the Audit Committee for recommendation to the Board.

AUDIT FINDINGS ON THE SADPMR ANNUAL REPORT, RECOMMENDATIONS AND MITIGATIONS BY MANAGEMENT

FINDING 5

5.2 No supply chain function

Recommendation

A supply chain management unit should be established within the SADPMR taking into account the size of the organisation. An existing staff member may be delegated to perform the supply chain functions together with existing duties where it is considered possible and compatible.

ACTION

A Procurement Officer was appointed in December 2009 and the supply chain processes are now being followed in conjunction with the Bid Adjudication Committee which consists of all managers, chaired by the CFO and overseen by the CEO.

AUDIT FINDINGS ON THE SADPMR ANNUAL REPORT, RECOMMENDATIONS AND MITIGATIONS BY MANAGEMENT

FINDING 5

5.3 No declaration of interest

Recommendation

All audit committee members adhere to the SADPMR’s Audit Charter by ensuring that all members are independent, by obtaining and reviewing all independence declarations.

ACTION

All committee and Board members have declared their interest for the 2009/2010 financial year.

AUDIT FINDINGS ON THE SADPMR ANNUAL REPORT, RECOMMENDATIONS AND MITIGATIONS BY MANAGEMENT

FINDING 5

5.4 Late submission of strategic plan and budget

Recommendation

Management to put processes in place to ensure compliance with the Treasury Regulations and make possible arrangements to adhere to the submission deadlines. Where an extension for approval has been granted by the executive authority, management should keep written correspondence to this regard.

ACTION

The strategic plan and budget were submitted on 30th September 2009. The strategic plan and budget for the 2010-2013 financial year were approved on the 6th April 2010 by the Minister of Mineral Resources.

THANK YOU