The Ports Regulator Overview and Presentation on 2009/10 Annual Report

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The Ports Regulator Overview and Presentation on 2009/10 Annual Report. Portfolio Committee on Transport 22 October 2010. Index. National Ports Act and Regulator mandates Regulator Programmes and Main Activities Financial Year 2009/2010 Annual Financial Statements. - PowerPoint PPT Presentation

Text of The Ports Regulator Overview and Presentation on 2009/10 Annual Report

  • The Ports Regulator Overview and Presentation on 2009/10 Annual Report

    Portfolio Committee on Transport 22 October 2010

    www.portsregulator.org

  • IndexNational Ports Act and Regulator mandatesRegulator Programmes and Main ActivitiesFinancial Year 2009/2010 Annual Financial Statementswww.portsregulator.org*

    www.portsregulator.org

  • Objects of the National Ports ActDevelopment of effective and productive ports industry for economic growth and developmentPromote and improve efficiency and performance in the management and operations of portsPromote the development of an integrated regional production and distribution system in support of government policieswww.portsregulator.org*

    www.portsregulator.org

  • Functions of the Ports Regulator In terms of the Ports Act Exercise economic regulation of the ports system in line with governments strategic objectivesPromote equity of access to ports and to facilities and services provided in ports Monitor the activities of the National Ports Authority to ensure compliance with the ActAdjudicate complaints and appeals against the AuthorityApprove or reject the Authority tariffsPromote regulated competitionRegulate the provision of adequate, affordable and efficient port services and facilitieswww.portsregulator.org*

    www.portsregulator.org

  • Objectives of economic regulationPromotion of efficiencyPromoting investmentProtection of port usersPrevention pricing and service discriminationPrevention of anti-competitive practicesCompetition amongst ports Competitive and affordable tariffs www.portsregulator.org*

    www.portsregulator.org

  • Regulator programmesAdministrationEconomic Regulation and TariffsMonitoring and ComplianceTribunal and Regulatory developmentIndustry Developmentwww.portsregulator.org*

    www.portsregulator.org

  • Current activitiesEconomic review of participation in Ports SystemImplement Ports Regulatory frameworkAdjudication of appeals and complaints Maintain the Regulator secretariat and systemsImplement tariff regulation frameworkPort monitoring www.portsregulator.org*

    www.portsregulator.org

  • Financial Year 2009/10 Annual Financial Statementswww.portsregulator.org*

    www.portsregulator.org

  • 2009/2010 Overall Audit OpinionClean AuditNo disclaimers or qualifications100% AuditSome matters emphasisedwww.portsregulator.org*

    www.portsregulator.org

  • Overall Audit Opinion (2)Additional matter Unaudited supplementary scheduleThe public entity provided supplementary information in the financial statements on whether resources were obtained and used in accordance with the legally adopted budget, in accordance with GRAP 1 Presentation of Financial Statements. The supplementary budget information set out on page 59 does not form part of the financial statements and is presented as additional information. Accordingly I do not express an opinion thereon.www.portsregulator.org*

    www.portsregulator.org

  • Matters of EmphasisMatters of emphasis and explanationsMaterial underspending of the budgetAs disclosed in note 23 to the financial statements, the entity has materially under-spent its budget in the amount of R2,843 million. This is attributable to the fact that the entity is not fully operational in terms of its mandated function and key positions were still vacant due to the organisational structure not yet being approved by the executive authority.Mainly in the area of staff costs and indirect costs, some capital expenditure accelerated to reduce under-spendingwww.portsregulator.org*

    www.portsregulator.org

  • Emphasis of matters 2009/10Unaudited supplementary schedule The public entity provided supplementary information in the financial statements on whether resources were obtained and used in accordance with the legally adopted budget, in accordance with GRAP 1 Presentation of Financial Statements. The supplementary budget information set out on page 59 does not form part of the financial statements and is presented as additional information. Accordingly I do not express an opinion thereon.Requirement under Ports Act, but not auditable in accordance with PFMA

    www.portsregulator.org

  • Submission of strategic plan The accounting authority of the Ports Regulator of South Africa (listed in schedule 3A of the PFMA) submitted its strategic plan after the start of the financial year (that is, 30 April 2009) to its executive authority, contrary to Treasury Regulation 30.1.1 of 2005.The Strategic Plan was submitted for comment to the Department of Transport prior to the required date, for feedback. The Plan was finally submitted on the date set out above, after amendments as required by the DOT.Emphasis of matters 2009/10 (cont.)*www.portsregulator.org

    www.portsregulator.org

  • Emphasis of matters 2009/10 (cont.)Non-adherence to legislation The entitys audit committee was not properly constituted in terms of Treasury Regulations 27.1.3 and 27.1.4. Moreover, it did not substantially fulfill its responsibilities, contrary to the requirements of Treasury Regulation 27.1.8 as well as sections 51(1)(a)(ii) and 76(4)(d) of the PFMA. The Regulator interprets the Members as non-executive, due to the special nature of the Regulator structure. The Regulator acted in accordance with this interpretation in establishing and managing the Audit Committee. The interpretation of the AG, classes Members as Executive. The Regulator to take opinion on the matter and change composition and operation of the Audit Committee in accordance therewith. Due to their not being permanent staff, business continuity plans could not be developed and implemented.

    *www.portsregulator.org

    www.portsregulator.org

  • The entitys internal audit function did not have an internal audit charter as required by Treasury Regulation 27.2.5. Moreover, it did not substantially fulfil its responsibilities, contrary to the requirements of Treasury Regulation 27.2.10 as well as sections 51(1)(a)(ii) and 76(4)(b) and (e) of the PFMA.The Internal Audit function was outsourced due to the organisation being so small and thereby not justifying the establishment of an in-house internal audit. The internal audit report was not signed off by the end of the financial year. This has been corrected.

    Emphasis of matters 2009/10 (cont.)*www.portsregulator.org

    www.portsregulator.org

  • The entity did not settle payments due to creditors within 30 days from date of receipt of invoices, contrary to the requirements of section 38(1)(f) of the PFMA. Consequently, fruitless and wasteful expenditure amounting to R6 219 was incurred.

    *www.portsregulator.orgEmphasis of matters 2009/10 (cont.)

    SupplierCategoryAmountPenalty / InterestReasonIT Service ProviderLate paymentR 3 454.20R 570.00R 0.00R 0.00New contract, S.P. delayed submitting banking confirmation form.Travel AgencyLate paymentR 5 698.55R 0.00Queries on account Online Legal SPLate paymentR 5 678.60R 0.00Queries on accountElectricity ProviderFruitless &WastefulR 2 627.53Account disputedRentalFruitless &WastefulR 2 505.39Late paymentsCommunication SPFruitless &WastefulR 1 086.27Late paymentsR 6 219.19

    www.portsregulator.org

  • The entity did not formally approve and implement a fraud prevention plan during the year under review, contrary to the requirements of section 51(1)(a)(i) of the PFMA. DOT policies followed in periods up to 1 January 2010(DOT managed the payments). Subsequent to that internal audit outsourced, but had not been signed off by year end.

    *www.portsregulator.orgEmphasis of matters 2009/10 (cont.)

    www.portsregulator.org

  • Internal controlI considered internal control relevant to my audit of the financial statements and the report on predetermined objectives and compliance with the PFMA, but not for the purposes of expressing an opinion on the effectiveness of internal control. The matters reported below are limited to the deficiencies identified during the audit:

    LeadershipLeadership did not design and implement an appropriate internal control system to monitor and ensure that the entity complies with all applicable laws and regulations. The current staffing levels including contract staff, does not allow the formal process separation necessary between procurement and financial transactions. The CEO signs off all payments to ensure oversight, until such time as staffing all in place. No irregularities encountered in any transactions that were the result of a lack of internal controls.

    *www.portsregulator.orgEmphasis of matters 2009/10 (cont.)

    www.portsregulator.org

  • GovernanceThe internal audit function and audit committee did not substantially fulfil their functions to management/those charged with governance in maintaining and ensuring an efficient and effective system of internal control during the year under review. Moreover, the systems necessary to mitigate the risk of fraud have not been implemented. The internal audit function was out-sourced as the organisation is too small to justify a stand alone full time internal audit function. The internal audit function of the DOT managed the oversight of payments till 1 January 2010. The financial systems that were implemented did not have an audit function that met the requirements of the AG, although documentary records recorded the classes of transactions referred to.

    Other reportsNo matters to report.

    *www.portsregulator.orgEmphasis of matters 2009/10 (cont.)

    www.portsregulator.org

  • Achievements 2009/10www.portsregulator.org*

    Key Result AreaKey Performance ObjectiveKey Performance IndicatorOutputEstablishing and operating a tribunal to hear complaints and appeals under the Nationa

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