Auditor-General Tsakani Maluleke has found the finances of the Government Printing Works (GPW) in such a mess that she could not express an opinion on its financial statement for the 2022-23 financial year.
In her audit report, Maluleke put the blame squarely on the GPW management for failing to put control systems in place and prepare accurate and complete financial reports supported by reliable information.
“I have not been able to obtain sufficient appropriate audit evidence to provide a basis for the audit opinion,” she said.
The Auditor-General said GPW did not recognise all items of property, plant and equipment in accordance with the Standard of Generally Recognised Accounting Practice.
“This was due to inadequate systems in place to record assets and some assets that were not recorded in the accounting records of the government component. Consequently, property plant and equipment is understated by R100.59 million.”
Maluleke said she was unable to obtain sufficient appropriate audit evidence on trade and other receivables from exchange transactions due to the poor status of the accounting records.
“I could not confirm these debtors by alternative means. Consequently, I was unable to determine whether any further adjustments were necessary to trade and other receivables from exchange transactions stated at R279.16 million (2022: R261.32 million) in disclosure note 8.”
Maluleke said she was also unable to obtain sufficient appropriate audit evidence to substantiate some of the recorded revenue transactions related to advertising sales, as the government component did not have adequate systems to maintain records for revenue.
“I was unable to confirm revenue by alternative means. Consequently, I was unable to determine whether any adjustments were necessary to the corresponding figure of advertising sales stated at R147.30 million in disclosure note 12 to the financial statements,” she said.
“During the 2022 financial year, I was unable to obtain sufficient appropriate audit evidence for cost of sales due to the poor status of accounting records. I was unable to determine whether any adjustments were necessary to the corresponding figure of cost of sales stated at R680.11 million.”
According to Maluleke, the financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework and were not supported by full and proper records as required by the Public Finance Management Act.
GPW CEO Alinah Fosi said GPW’s catastrophic hardware crash and systems failure that led to loss of critical data in February 2021 and March 2022 left a “lasting impact on their ability to produce credible annual financial statements”.
“The knock-on effect of this loss of financial information will remain with GPW over the foreseeable future, but management has developed focused plans to address challenges, mitigating plans to manage the risks of systems failure and have also enhanced its internal capacity with skilled professionals to support GPW in the execution of its plans.
“GPW management has been engaging critical stakeholders such as the National Treasury, Office of the Accountant General (OAG) and Auditor General of South Africa (AGSA) to present specific challenges caused by the system failure, including plans to address them,” Fosi said.
Home Affairs Minister Aaron Motsoaledi said: “Plans developed in the year under review will continue to be implemented to address this critical area of work.”
Cape Times