Internal Audit Follow Up Report

Internal Audit Follow Up Report

Prior Internal Audit Reports Ref: 16-19/20 4(b)

MAP Follow Up: Prior Internal Audit Reports

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1. BACKGROUND

1.1. This report is prepared for the General Secretary and Senior Management. The report

presents the results of the Prior Internal Audit Reports Management Action Plan (MAP)

Follow-Up engagement which was conducted as part of the Fiscal Year 2019/20 Audit

Plan.

1.2. During each quarter, the Internal Audit Function carries out the following work to provide

an update on progress:

• For recommendations and management action plans agreed in audit reports issued

since the date of the previous meeting, seeking assurance from management that

agreed actions have been taken in accordance with the proposed timescales

• For actions previously confirmed to have been taken by management, carrying out

compliance testing to confirm satisfactory implementation.

1.3. We conducted this follow-up engagement in accordance with Generally Accepted

Auditing Standards and in conformance with the International Standards for the

Professional Practice of Internal Auditing. Those standards require that we plan and

perform the engagement to obtain sufficient, appropriate evidence to provide a

reasonable basis for our conclusions based on our engagement objective.

Recommendations to mitigate risks identified were previously provided to management

during the original engagement to assist in the formulation of the management action

plans referenced in this report.

2. OBJECTIVE

2.1. Assess the status of corrective actions for Management Action Plans (MAPs) previously

communicated in the Finance, Supply Chain Management, Human Resources, Dispute

Management Services and Collective Bargaining Services audit reports issued during

first to third quarters of the 2019/20 financial year and 2018/19 financial year.

3. SCOPE

3.1. The follow up engagement fieldwork was conducted with the Line Managers and

included follow up of prior reports audit findings, interview responsible officials and

relevant supporting working papers.

3.2. The engagement was conducted during March 2020.

4. METHODOLOGY

4.1. The methodology used to complete the objective of this engagement includes:

• The review of the management responses to ascertain that it addressed the findings

and recommendations.

• Where the commitments were established documentation concerning control

processes those documents were reviewed and analysed.

5. DETAILED MAP FOLLOW UP STATUS:

No. Audit Finding Management Action Plan Status In-Progress Comments

1. Supply Chain Management: Procurement and Contract Management 1.1 Service providers paid

outside the 30 days period The officer will be required to include reasons for delays on claims not processed within timelines. Original completion date: 31 October 2019

Resolved CLOSED The process has been implemented.

1.2 Contract renewal process not correctly executed

• The submission will be revised and re-submitted to the GS to ensure it is in line with the provisions of the policy.

• We will also engage ICT to provide advise on how to handle this process, also to indicate the expected lifespan of these machines.

Original completion date: 31 October 2019

Resolved CLOSED Internal Audit comment: We note that there was a communication between the CFO and the office of the GS that all submissions with financial implications must via the CFO’s office before approval by the GS. Post the communication, all submissions (contract and procurement) to the office of the General Secretary via the Chief Financial Officer for recommendation.

1.3 Contract register not properly maintained

• Clarify on the comments column that the contracts are either open or closed.

• Supervisory controls will be strengthened. Original completion date: Immediately

Resolved CLOSED Internal Audit comment: The contract register has since been amended accordingly.

1.4 Contract register exclude financial information

We will revise the register to match the policy and SOP to ensure we do not contravene any sections of the policy. Original completion date: 31 October 2019

Resolved CLOSED Internal Audit comment: The contract register has since been amended accordingly.

1.5 Gaps identified within the procurement process flow

Procurement plan reporting: reporting on the Procurement Plan will be conducted in line with the Policy (monthly basis). Original completion date: Immediately

Resolved CLOSED Internal Audit comment: The procurement plan report is compiled monthly.

1.6 Lack of evidence of proper review and approval of

• The database will from now on be submitted to the CFO on a quarterly basis for approval.

Resolved CLOSED


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documents generated during procurement the process

• SOP will be submitted to the CFO for review and then it will be fast-tracked to the office of the GS for approval.


The database for Q3 was reviewed and signed off by CFO.

1.7 Travel and accommodation related processes done outside the SCM unit are not synchronized with SCM processes

• An SOP to the Travel Policy will be drafted to provide guidelines on how transactions relating to travel and accommodation are dealt with.

• The Personal Assistant to the General Secretary will use this document in future when performing her SCM related duties.

Original completion date: 30 November 2019

Resolved CLOSED Management comment: The SOP has been approved accordingly. The Executive Services Personal Assistant was also advised on SCM processes and is encouraged to consult where uncertain. Internal Audit comment: We SOP was satisfactory reviewed by IA and noted that all review notes raised were cleared and prior audit findings management action plans were incorporated into the document, hence finding is resolved.

1.8 Discrepancies and inconsistencies of the payment generated documentation attached in the invoice pack

• Changes to the original PRF will be noted on the PRF to explain the differences moving forward.

• PO’s to be routed through SCM prior to issuing to supplier to ensure that all documents are correct.

• Engagements with the Chief Financial Officer and General Secretary on how to include the executive Personal Assistant on the escalation of PO’s through the Evolution system to be routed to SCM for approval. This is the only way to ensure SCM reviews the process prior to issuing of PO’s to suppliers.

• SCM will advise the executive to prepare a PRF prior to requesting quotations from suppliers.

• Both manual and system generated PRF will be filed with the invoice payment packs and

Resolved CLOSED Management comment: The SOP has been approved accordingly. The Executive Services Personal Assistant was also advised on SCM processes and is encouraged to consult where uncertain. Internal Audit comment: We SOP was satisfactory reviewed by IA and noted that all review notes raised were cleared and prior audit findings management action plans were incorporated into the document, hence finding is resolved.


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any documents outstanding will be returned to the PA before a payment may be processed.


1.9 Master invoice and claims registers are not properly maintained

• Review controls by the SCM Manager will be strengthened to ensure gaps are noted and rectified timely, before the monthly invoice and claims reports are finalized.

• Application of consistent date format to enable the capturer of the consolidated invoice and claims register to capture correct information.

• Management accept the findings and the filtering period will be correct and consistency maintained on the date format.


Resolved CLOSED Travel invoices are reviewed and reportedly separately and not as part of other invoices due to the manner and information is kept. All invoices outstanding invoices are considered by Finance when disclosing accruals on the financials.

1.10 Insufficient controls over date stamping of invoices and claims upon receipt

• SCM Officers will be advised on proper use of date stamp and consistency of processes.

• Managerial supervisory controls will be enhanced to ensure that when reviewing the invoice and claims payment packs, invoices and claims are date stamped by the SCM.


Resolved CLOSED Documents are reviewed for completeness during processing. Officials are also reminded to stamp the invoices.

2. Dispute Management Services: Training and Development for Panellists, Practitioners and Parties 2.1 Combined cases not

properly handled • Consent from all parties to a condonation will

be requested and filed.

• The Case Management Officers have been advised to confirm discussions with the parties to the dispute in writing so that there can be audit trail of the conversation.

Original completion date: Immediately

Resolved CLOSED Management comment: Case Management Officers will only combine cases upon request by the Applicants/or their Union or as per the ruling of the Commissioner


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2.2 Condonation not processed within the prescribed timeline

• All Case Management Officers, including the Administrator have been informed to forward or submit correspondence to the relevant personnel in the organisations and within the relevant timeframes.

• Will be treated as poor performance in line with the Performance Management Policy of Council.


Resolved CLOSED Management comment: The Case Management Officers to process the condonation application through the DMS Application System

2.3 Screening of some of the referrals is not in line with the practice manual

• The DMS department will be utilizing the DMS Application system. Once the applicant completes the referral, the particular CMO for the province will have immediate access to that dispute and screens it on the date of receipt (within 1 day as per the Practice Manual).

• The manual processes will be minimized as the screening sheet will no longer be applicable.

• The minimum of the performance agreement (performance measures) will be aligned in line with the practice manual.

• The practice manual will be updated with any changes.

• All referrals will automatically be sent to the Case Management Officer on the DMS Application system. If the CMO has not actioned a case according to the time period allocated to him/ her, the system will automatically escalate the case to the Manager for actioning.

Original completion date: 31 March 2020: fixing of errors on the screening sheet

Partially resolved OPEN Management comment: The screening sheets were reviewed and corrected accordingly. Online verification and verification of disputes will be done by the Officers/Manager/SM on daily basis. The issue is also addressed in the performance agreement to ensure compliance and it will be monitored accordingly. Since 01 April 2020, all disputes are screened electronically. Acknowledgement letters are generated by the system starting with ELRC1-20/21NW Revised completion date: depending on the resuming of operations (scheduling of cases) Internal Audit comment: Post the resignation of the Manager, IA has noted that the Senior Manager has performed a spot check on processes which were delegated to the Manager and fixed errors he could identify. In terms of efficiency and effectiveness of personnel, we noted that poor performance was embedded in the


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01 April 2020: going solo on the DMS application system 30 June 2020: update the practice manual

quarterly performance assessments of responsible employee. Internal audit also noted that as of the 1st of April all manual processes will be discarded and processed electronically using the APP. We can only test and verify the effectiveness of the electronic processes after a month of solo using the APP. Hence the finding will remain open until such is done. Due to the national Covid-19 lockdown no new cases were scheduled, therefore IA cannot give significant assurance on the effectiveness of corrective action plan, hence the finding will remain open until resuming of the operations (scheduling of cases). Therefore, the revised target date is accepted by the office of Internal Audit.

2.4 Non-adherence to timeframes for submission of acknowledgement letter to applicant

On the DMS APP, the acknowledgement letter will be issued automatically the moment an applicant submits their referral form. Original completion date: 01 April 2020

Resolved CLOSED Management comment: All disputes are electronically acknowledged. No Manual acknowledgement of disputes will take place anymore.

2.5 The referral register is not properly maintained and monitored

• The DMS application system has been designed such that all disputes for a Province are assigned to a particular CMO who will have immediate access to the cases which have been registered on the system.

• The system has a functionality to display time and date of processing a referral, closing and escalating to the next hierarchy level. This will enable the monitoring process.

• The DMS practice manual to be updated in line with the processes as undertaken by the application system.

Original completion date: 01 April 2020

Partially resolved OPEN Management comment: All disputes will be verified online- The verification of disputes is managed on the performance agreement. The Officers will be evaluated accordingly during performance appraisals. All disputes are being verified online starting with ELRC1-20/21NW. The verification of disputes is managed on the performance agreement. The Officers will be evaluated accordingly during performance appraisals Revised completion date: 30 June 2020 (updating of the DMS SOP)


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Internal Audit comment: In terms of efficiency and effectiveness of personnel, we noted that poor performance was embedded in the quarterly performance assessments of responsible employee. The effectiveness of the APP will be tested in the 1st quarter because the unit is discarding the CMS system as of the 1st April 2020 and going solo on the APP. All manual processes will fall away, and management will have to strengthen the monitoring controls to ensure compliance. Furthermore, we recommend that the Senior Manager issues a practice note with regard to the changes to enforce compliance (short term solution). The practice note must be issued immediately and will remain binding until the SOP is updated and approved accordingly. Therefore, the revised target date is accepted by the office of Internal Audit.

2.6 Inconsistencies over the date stamping of documents

• The date on which the dispute referral was received will automatically be generated by the system.

• Council is moving towards the use of the digitized referral system, thus all cases will be stored and closed on the system.

• A report of closed files will then be extracted from the system. No more manual closing of files will be required.

• The system developers have been tasked to “force” the CMO to upload attachments when they are closing the files.


The current control is no longer relevant

CLOSED Management comment: With the electronic referral system, the acknowledgement letters are automatically be sent to the Applicant. All cases referred for 20/21 Financial year has electronically generated reference numbers starting ELRC1-20/21NW. No more stamping of referrals as they are filed online on the DMS APP. Revised completion date: depending on the resuming of operations (scheduling of cases)


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Internal Audit comment: Internal audit has noted that as of the 1st of April all manual processes, including the date stamping of incoming referrals, will be discarded, and cases will be processed electronically using the APP. The effectiveness of the electronic processes will be verified at least three months after the resuming of normal operations post the lockdown. The ineffective control (audit finding) is no longer relevant hence the finding is closed.

2.7 Discrepancies between the referral register and the screening sheet

• The screening sheet will become obsolete as the department will be using the DMS APP from April 2020 and referrals will be submitted electronically.

• A computer will be made available at Reception to enable those Applicants that want to lodge dispute referrals at Council.

• The DMS APP will be loaded onto the computer.


Partially resolved OPEN Management comment: There is no more screening sheet for DMS Applications. The disputes are automatically registered on the DMS APP and the Case Management Officers will verify them online. The computer will be installed during the re-opening of the Office after lockdown. Revised completion date: depending on the resuming of operations (scheduling of cases) Internal Audit comment: Internal audit has noted that as of the 1st of April all manual processes will be discarded and processed electronically using the APP. We can only test and verify the effectiveness of the electronic processes after a month of solo using the APP. Hence the finding will remain open until such is done. In terms of efficiency and effectiveness of personnel, we noted that poor performance was embedded in the quarterly performance assessments of responsible employee.


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Due to the national Covid-19 lockdown no new cases were scheduled, therefore IA cannot give significant assurance on the effectiveness of corrective action plan, hence the finding will remain open until resuming of the operations (scheduling of cases). Therefore, the revised target date is accepted by the office of Internal Audit.

2.8 Panellist claims not properly monitored

• DMS to ensure that the register is signed off to indicate the date at which the payment pack is returned to SCM or Finance for payment.

• This will also assist in measuring whether the document is processed within the timeframes as per the practice manual.

• DMS management to caution SCM to ensure that if the Manager is not at work, the claims are submitted to the Senior Manager for authorization and not left unattended on her desk.

• DMS Manager/ Senior Manager to date sign the register as acknowledgement of receipt of the claims and again when the claims are re-submitted to SCM after authorization.

Original completion date: 31 March 2020

Partially resolved OPEN Management comment: The manual claim register will be signed off by the DMS Manager/SM. Claims will be submitted electronically by Commissioners and processed online going forward Revised completion date: depending on the resuming of operations (scheduling of cases) Internal Audit comment: Internal audit has noted that as of the 1st of April all manual processes will be discarded and processed electronically using the APP. We can only test and verify the effectiveness of the electronic processes after a month of solo using the APP. Hence the finding will remain open until such is done. In terms of efficiency and effectiveness of personnel, we noted that poor performance was embedded in the quarterly performance assessments of responsible employee. Due to the national Covid-19 lockdown no new cases were scheduled, therefore IA cannot give significant assurance on the effectiveness of corrective action plan, hence the finding will remain open until resuming of the operations (scheduling of cases).


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Therefore, the revised target date is accepted by the office of Internal Audit.

2.9 Panellist claims register not properly maintained

• Once a claim has been checked and authorised it will be signed off on the register.

• Register to be checked and signed by both DMS Manager/ Senior Manager and SCM against the claims submitted for completeness.

• Any gaps to be cleared prior to submission to Finance for payment processing.


Partially resolved OPEN Management comment: The manual dispute register will be signed off by the DMS Manager/SM. Claims will be submitted electronically by Commissioners and processed online going forward. Revised completion date: depending on the resuming of operations (scheduling of cases) Internal Audit comment: Internal audit has noted that as of the 1st of April all manual processes will be discarded and processed electronically using the APP. We can only test and verify the effectiveness of the electronic processes after a month of solo using the APP. Hence the finding will remain open until such is done. In terms of efficiency and effectiveness of personnel, we noted that poor performance was embedded in the quarterly performance assessments of responsible employee. Due to the national Covid-19 lockdown no new cases were scheduled, therefore IA cannot give significant assurance on the effectiveness of corrective action plan, hence the finding will remain open until resuming of the operations (scheduling of cases). Therefore, the revised target date is accepted by the office of Internal Audit.

2.10 Award not submitted to Research and Media for publishing

• DMS Manager to be check/ monitor that all awards reported are complete, accurate,

Resolved CLOSED


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recorded and forwarded to Research and Media for uploading onto the database.

• All awards will be uploaded onto the DMS APP and will automatically send to Research and Media.

• The Officer has since sent the award to Research and Media.


All approved awards have been sent to Research and Media. The issue is also captured and dealt with in the performance agreements of the Officers.

3. Human Resources: Performance Management System

3.1 Employee performance below 3 is not adequately addressed

The Performance Management policy will be amended accordingly, and the amended draft will be concluded by the end of quater4. Human Resources will check third quarter assessments to identify employees that perform below 3 that interventions can be put in place to address the shortcomings. It must be noted that Human Resources does intervene in cases where employees perform below the required standard. Original completion date: 31 March 2020

Resolved CLOSED Management comment: No employee scored below 3 in the quarter under review. HR will continue to monitor such cases should they arise. The revised and updated PMS SOP was approved by the General Secretary. The PMS policy form part of the policies to be presented at the Executive Committee meeting scheduled for the 26th May 2020. Internal Audit comment: We have satisfactory reviewed the documents and noted that issues raise were incorporated accordingly, hence finding is resolved.

3.2 Performance Management Procedure manual not updated with the recent administrative changes and practices

The Performance Management Standard Operating Procedure manual will be revised accordingly by the end of fourth quarter. Original completion date: 31 March 2020

Resolved CLOSED Management comment: The revised and updated PMS SOP was approved by the General Secretary. The PMS policy form part of the policies to be presented at the Executive Committee meeting scheduled for the 26th May 2020.


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Internal Audit comment: We have satisfactory reviewed the documents and noted that issues raise were incorporated accordingly, hence finding is resolved.

3.3 Weighting of key performance areas not properly done

Human Resources will strengthen supervisory controls to ensure proper review of received documents for compliance and completeness by:

• Performing an adequate quality check of all performance agreements upon submission to ensure that they meet the required standards as per their guidelines before they are filed. Where inconsistencies exist, documents should be returned to the employees for correction.

• Ensuring that SMs’ performance management documentation complies to HR standard before submission to the department.


Resolved CLOSED Management comment: The matter was addressed with staff and the KPA weights for managers were amended. HR confirms that the new signed contracts comply to the requirements. Internal Audit comment: We satisfactory noted that the 2020/21 performance contracts have addressed the raised issues.

3.4 Directives for submission of performance assessments are not practical

• Both the policy and the procedure manual will be corrected accordingly by end of 4th quarter.

• In the short-term the third quarter assessment dates will accommodate both employees and Senior Managers.


Resolved CLOSED Management comment: The revised and updated PMS SOP was approved by the General Secretary. The PMS policy form part of the policies to be presented at the Executive Committee meeting scheduled for the 26th May 2020. Assessment submission dates have been revised and have been agreed upon with the Senior Managers. Internal Audit comment:


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We have satisfactory reviewed the documents and noted that issues raise were incorporated accordingly, hence finding is resolved. We have noted that the 4th quarter 2019/20 were communicated with Senior Managers.

4. Asset Management: National Office

4.1 Assets not recorded on the fixed asset register

• The disparities will be investigated and corrected immediately.

• Matching of a sample of assets on the floor to the FAR and Inventory List to be conducted on a quarterly basis to support the bi-annual asset verification process.

• A register/ record of tag replacements to be compiled so as to keep an audit trail of all the changes related to asset tags.

• Strict monitoring of the movement of assets on a monthly basis.


Partially resolved OPEN Management comment: Noted disparities were corrected. 4th quarter verification was in progress when lockdown was imposed, not completed. Revised completion date: depending on the resuming of operations, once the lockdown is lifted Internal Audit comment: The year-end asset verification was completed by SCM on the 4th May 2020; however, the final working paper file was not submitted to IA for review. Furthermore, due to the lockdown we cannot sample and reperform the verification. The finding can only be verified once the lockdown has been lifted.

4.2 Late submission of asset additions for insurance purposes

The SCM Officer has been instructed to process additions immediately as the insurer is willing to process and cover assets based on the delivery note. Original completion date: Immediately

Resolved CLOSED Management comment: The instruction was issued. No further action is required except to monitor compliance on an ongoing basis. Internal Audit comment: Assets (shredder, laptops) bought during February and March were timely insured. IA verified that supporting documentation (delivery note) was submitted to the insurer.


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4.3 Gaps in recording of assets in the asset register

• SCM Officer is advised to ensure all relevant columns are populated accordingly.

• The SOP and Policy will be amended to reflect the useful information as per the FAR template.

• Consequence management to be implemented to address poor performance- related issues.

Original completion date: 15 March 2020 for the draft Policy to be submitted to the GS and the SOP approval.

Partially resolved OPEN Management comment: The Asset policy has been revised and submitted for consideration by the relevant authority. SOP review in a draft phase and will be finalized once the Policy is approved. Internal Audit comment: The updated policy was submitted to IA on the 12/03/2020, and IA raised review notes and sent it back to the CFO on the 18/03/2020 for clearing the notes. The SOP was not submitted to IA for review.

4.4 Inventory lists not timely updated

• During the verification the SCM Officer will verify the assets in the presence of the incumbent, the incumbent will co-sign the working paper as proof that the items as ticked-off as verified by SCM are correct. The same working paper together with the updated inventory list will be submitted to the SCM Manager for review and approval.

• Based on the approved working paper, an updated inventory list is printed, distributed to incumbents and signed off by both the incumbent and SCM official and further pasted on the walls.

• A copy of the signed inventory list is filed by SCM for record purposes.

• Updates to Inventory lists and FAR will be based on the verification working papers to be conducted at the conclusion of each location.

• The updated lists and FAR to be reviewed against the working papers by the SCM Manager and signed off as proof of review.

• Deviations from the approved processes to be dealt with as poor performance in line with the PMS Policy and consequence management.

Partially resolved OPEN Management comment: The process was implemented during 4th quarter verification. The verification process is incomplete due to office lockdown. Revised completion date: depending on the resuming of operations, once the lockdown is lifted Internal Audit comment: The year-end asset verification was completed by SCM on the 4th May 2020; however, the final working paper file was not submitted to IA for review. Furthermore, due to the lockdown we cannot sample and reperform the verification. The finding can only be verified once the lockdown has been lifted.


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Original completion date: Next asset verification – year end

4.5 Inconsistencies identified over the Bi-Annual Asset Verification working papers

• Working papers for the verification will indicate Working papers for the verification will indicate the explanation of the legends.

• Working papers signed off by the preparer will be submitted to the Manager SCM as and when a location has been verified, signed off as proof of review and filed accordingly.

• The working papers will be used as a basis for compiling the Verification Report.

• The working papers, inventory lists and the Verification Report will be submitted to the CFO for final review and sign off.

• The SCM Officer to keep a separate file for each verification session to ensure that all necessary documents are within the same file.


Partially resolved OPEN Management comment: The process was implemented during 4th quarter verification. The verification process is incomplete due to office lockdown. Revised completion date: depending on the resuming of operations, once the lockdown is lifted Internal Audit comment: The year-end asset verification was completed on the 4th May 2020; however, the final working paper file was not submitted to IA for review. Furthermore, due to the lockdown we cannot sample and reperform the verification. The finding can only be verified once the lockdown has been lifted.

4.6 Funds from the disposal process not collected on time

• SCM to ensure that bidders are notified of the timeframes to settle debt after an auction.

• Failure to pay for items within the stipulated timeframes will result in the items being offered to the next bidder or returned to Council for disposal.

• No items will be released prior to settlement of debt.


Resolved CLOSED Management comment: The actual incident was closed. Recommendations were implemented during the 4th quarter auction. Internal Audit comment: Action plan was satisfactory implemented.

4.7 Inadequate management of asset tags

• SCM to verify the number of tags allocated to each Province, a list per Province to be compiled. Any unallocated tags in excess of 20 to be returned to National office.

Partially resolved OPEN Management comment: The process was implemented during 4th quarter provinces were requested to submit tags they have.


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• Returned tags to National office to be placed in a box for safekeeping by SCM.

• Fallen/ missing tags to be replaced by the Chambers and National Office, the inventory list and FAR to be updated accordingly.

Original completion date: 28 February 2020 – updated list of tags available at Provincial Chambers 31 March 2020 – replacement of missing or lost tags.

SCM did take delivery of these tags. The replaced tags register still to be finalized. Revised completion date: depending on the resuming of operations, once the lockdown is lifted Internal Audit comment: IA noted the comment and will follow-up once the final working paper file is submitted for verification. Furthermore, due to the lockdown we cannot sample and reperform the verification. The finding can only be verified once the lockdown has been lifted.

5. Finance

5.1 Inaccurate budget amounts in the monthly expenditure variance reports

• Inaccurate budget amounts - Finance have escalated the budget report errors to the service provider (FINWARE), and the response received was to do software upgrade. The upgrade was done within the quarter; however, the errors persist.

• Finance Manager will reject variance reports where insufficient explanation is received with immediate effect.

Original completion date: 31/12/2019 Revised date (Q3): 31/01/2020 Revised date (Q4): 31/03/2020

Resolved CLOSED Management comment:

• Finance Manager rejects variance reports where insufficient explanation is received.

• The software upgrade was performed on 08 April 2020 and no budget errors have been noted subsequently, management will monitor the reports until end of FY2020/21 - Q1

Internal Audit comment: IA will closely monitor the variance reports.

6. Limpopo Provincial Chamber

6.1 High rate of meeting postponements

• Develop the Year Planner in line with the annual plans of the Parties to avoid any clashes which may result in Council meetings being postponed.

• Engage with party leaders to submit the necessary reports on time.

• Before the beginning of every quarter the STANCO meeting should confirm the year

Issue not resolved but will be closed

CLOSED Management comment

• The difficulty with this issue is that it is beyond the control of the administration as parties are initiating requests on postponements of meetings, notwithstanding the awareness campaigns which are regularly conducted through:


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plan/ schedule of Chamber’s activities. Parties agreed that each member of a committee should be accompanied to the meeting by a substitute to counteract the chances of postponements of meetings.

Original completion date: 31/03/2020

- distribution of notifications of meetings well in advance

- performing frequent reminders after issuance of notifications

- communicating performance on attendance though quarterly reports, and concurrently sensitizing parties to the risk related to postponements and non-submission of apologies in case of absenteeism.

Internal audit comment We note the comment and additional efforts to reduce the rate of meeting postponements. However, management will continue to monitor the related risks of meeting postponements.

7. Kwa-Zulu Natal Provincial Chamber

7.1 High rate of meetings postponement

• The KZN PELRC Strategic Planning workshop shall take place on 16.17 January 2020 by which time Parties shall have on hand, their respective year planners when the KZN PELRC year planner is drawn up. This may assist to reduce instances of postponement of pre-scheduled meetings.

• Main meeting dates (STANCO / CHAMBER and one standing task team meeting per quarter) shall be plotted on the year planner.

• Additional / added on task team meetings shall be included during the year as and when necessary.

• Fruitless and wasteful expenditure will be disclosed in full and information submitted to Supply Chain to update the register.




• The difficulty with this issue is that it is beyond the control of the administration as parties are initiating requests on postponements of meetings, notwithstanding the awareness campaigns which are regularly conducted through: - distribution of notifications of meetings well in

advance - performing frequent reminders after issuance of

notifications - communicating performance on attendance

though quarterly reports, and concurrently sensitizing parties to the risk related to postponements and non-submission of apologies in case of absenteeism.

Internal audit comment We note the comment and additional efforts to reduce the rate of meeting postponements. However,


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management will continue to monitor the related risks of meeting postponements.

7.2 Administrative duties over meeting minutes and reports not properly maintained

• If the Chairperson / Deputy Chairperson are unable to avail themselves for each and every task team meeting (as there are many added on meetings over and above those enlisted in the annual year planner), a short-term practical approach would be to:

- record in the minutes / reports, the request made by Parties for the Provincial Manager to preside as Chairperson of the meeting and, his acceptance thereof.

- Record in the report / minutes that all decisions which had been taken in the meeting and captured in the report / Assignment list, had been read out to Parties towards the end of the meeting and Parties confirmed their approval.

• Dispatching of minutes/ reports and assignment lists to the Chairperson as per the CWP timeframes and retaining proof of such.

• Filing of Declaration Forms as proof of review by the Chairperson.

Unresolved OPEN Management comment Latest amendment to Committee Work Procedures has removed this requirement. Revised completion date: depending on the resuming of operations, once the lockdown is lifted Internal audit comment Internal Audit notes management comments that the latest amendments to the CWP removed the requirement of quality checking of minutes and reports by Chairpersons. Furthermore, we have noted that the 4th quarter meetings were rescheduled to the first quarter 2020/21 and IA can only verify the implementation of the amended procedure manual at the end of the first quarter.

7.3 Assignment lists not duly authorised

Emails as proof of dispatching minutes, reports and assignment lists will be retained as evidence. Original completion date: 31/03/2020

Unresolved OPEN Management comment Latest amendment to Committee Work Procedures has removed this requirement. Revised completion date: depending on the resuming of operations, once the lockdown is lifted Internal audit comment According to the Addendum to the CWP approved by the GS in the 4th quarter, only clause 7.1 and 7.2 of the CWP that talked to quality checking of minutes by the Chairperson were removed, however clause 1.5 and 3.1


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that talked to the Assignment Lists being submitted to the Chairperson and the authorisation of it therefore, were not removed. Furthermore, we have noted that the 4th quarter meetings were rescheduled to the first quarter 2020/21 and IA can only verify the implementation of the amended procedure manual at the end of the first quarter.

8. Eastern Cape Provincial Chamber 8.1 Shorter meeting notice

period Shorter notice periods will be accompanied by written confirmation from Parties indicating their agreement as per the CWP. Original completion date: 31/03/2020

Unresolved OPEN Internal audit comment No comment on implemented action plan received from the Senior Manager and Manager. We have noted that the 4th quarter meetings were rescheduled to the first quarter 2020/21 and IA can only verify the implementation of the amended procedure manual at the end of the first quarter. Revised completion date: depending on the resuming of operations, once the lockdown is lifted.

8.2 Assignment lists not always duly prepared

Manager to use the correct templates (notices, minutes and assignment lists) with all required information completed as per the CWP. Original completion date: 31/03/2020

Unresolved OPEN Internal audit comment No comment on implemented action plan received from the Senior Manager and Manager. We have noted that the 4th quarter meetings were rescheduled to the first quarter 2020/21 and IA can only verify the implementation of the amended procedure manual at the end of the first quarter. Revised completion date: depending on the resuming of operations, once the lockdown is lifted

9. Northern Cape Provincial Chamber


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9.1 Administrative duties over assignment lists not properly maintained

• After every meeting the assignment list will be compiled as informed by the minutes and submitted within the required CWP timeframes.

• Assignment lists will be dated on the date of preparation.


Unresolved OPEN Management comment: Gaps over adherence with timeframes for preparation of Assignment Lists as per the provisions of CWP (inconsistencies). Revised completion date: depending on the resuming of operations, once the lockdown is lifted Internal Audit comment: No reasons for non-adherence with CWP was provided or if approval was granted by the Senior Manager for delayed submission of Assignment Lists to Internal Audit. Furthermore, we have noted that the 4th quarter meetings were rescheduled to the first quarter 2020/21 and IA can only verify the implementation of the amended procedure manual at the end of the first quarter.

10. Free State Provincial Chamber 10.1 Meeting minutes are not

always produced The application of the Committee Work Procedures will be strictly enforced, in that, the minutes and/or reports will be produced for all convened special meetings, including Special STANCO, in line with the timeframes of the Committee Work Procedures. Original completion date: 31/03/2020

Resolved CLOSED Internal audit comment Management has submitted evidence of 4th quarter meeting minutes, therefore finding closed.


Provincial Manager to compile assignment list where there are unambiguous actions emanating from meeting decisions and in line with CWP. Original completion date: 31/03/2020

Resolved CLOSED Internal audit comment The assignment list for the 4th quarter meeting was prepared therefore finding closed.


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10.3 Administrative duties over meeting minutes and reports not properly maintained

The Provincial Manager to motivate and submit reasons for anticipated delays to the Senior Manager as required in terms of CWP. Original completion date: 31/03/2020

Unresolved OPEN Internal audit comment No comment on implemented action plan received from the Senior Manager and Manager. We have noted that the 4th quarter meetings were rescheduled to the first quarter 2020/21 and IA can only verify the implementation of the amended procedure manual at the end of the first quarter. Revised completion date: depending on the resuming of operations once the lockdown is lifted.

11. Gauteng Provincial Chamber

11.1 Shorter meeting notice period

The Manager to ensure that shorter notice periods are supported by confirmations from party members. Original completion date: 31/03/2020

Partially resolved OPEN Management comment During the Strategic Planning Workshop which was held the 25th – 26th November 2019, these issues were deliberated at comprehensively and decisions were taken to be always in compliance going forward starting from Q4 of 2019/20. Thus far, we wish to report that there is progress in this regard. Internal audit comment We have noted that the 4th quarter meetings were rescheduled to the first quarter 2020/21 and IA can only verify the implementation of the amended procedure manual at the end of the first quarter. Revised completion date: depending on the resuming of operations once the lockdown is lifted.


Manager to capture all decisions on the assignment list as reflected on the minutes. Original completion date: 31/03/2020

Partially resolved OPEN Management comment During the Strategic Planning Workshop which was held the 25th – 26th November 2019, these issues were


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deliberated at comprehensively and decisions were taken to be always in compliance going forward starting from Q4 of 2019/20. Thus far, we wish to report that there is progress in this regard. Internal audit comment We have noted that the 4th quarter meetings were rescheduled to the first quarter 2020/21 and IA can only verify the implementation of the amended procedure manual at the end of the first quarter. Revised completion date: depending on the resuming of operations once the lockdown is lifted.

12. Mpumalanga Provincial Chamber


The Manager to ask leaders of parties to provide the Provincial Chamber with their plans for the year for alignment purposes with the ELRC Year Planner. Original completion date: 31/03/2020


12.2 Meeting minutes not properly recorded

Decisions taken during meetings will be recorded in full. Where the Provincial Manager is appointed to chair meetings, such will be captured on the minutes. Original completion date: 31/03/2020

Unresolved OPEN Internal audit comment No comment on implemented action plan received from the Senior Manager and Manager. We have noted that the 4th quarter meetings were rescheduled to the first quarter 2020/21 and IA can only verify the implementation of the amended procedure manual at the end of the first quarter.


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Revised completion date: depending on the resuming of operations once the lockdown is lifted.


Use of the correct templates as prescribed by the CWP. Original completion date: 31/03/2020


13. North West Provincial Chamber


• The quarterly report detailing meeting attendance will be shared with the Chamber to correct areas pf poor attendance.

• Provincial Manager to also share the Internal Audit Report in order to address issues raised.




• The difficulty with this issue is that it is beyond the control of the administration as parties are initiating requests on postponements of meetings, notwithstanding the awareness campaigns which are regularly conducted through: - distribution of notifications of meetings well in

advance - performing frequent reminders after issuance of

notifications - communicating performance on attendance

though quarterly reports, and concurrently sensitizing parties to the risk related to postponements and non-submission of apologies in case of absenteeism.

Internal audit comment:


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We note the comment and additional efforts to reduce the rate of meeting postponements. However, management will continue to monitor the related risks of meeting postponements.

13.2 Administrative duties over meeting notice and meeting minutes not properly maintained

• All Party members expected to be in the meeting will be listed on the notice and attendance register.

• Minutes will reflect those present and those whom apologies were received.

• Attendees will be requested to sign next to their names, those who are substitutes will be instructed to add their names at the bottom of the register.


Partially resolved OPEN Management comment:

• Party-members expected to be in meetings are listed in the attendance-registers and minutes are reflective of those who are present and absent, but notices do not list the expected attendees.

• Notices issued for February and March anticipated meetings do not reflect members to other sub-committees such as STANCO and Task Teams.

• The formal Chamber of 12 March 2020 supported the motion on waiving the requirement on listing the attendees to meetings upon issuing notices.

• Parties promised to submit names of party-members expected to participate at different meetings in order to enable us to administratively list them upon issuance of notifications.

• The follow-up on submissions of the said names will be performed post the repeal of the lockdown regulations (upon reinstatement on formal Chamber programs).

• The names of participants delegated to meetings are listed by sets of minutes and attendance-registers of such meetings as confirmed by the internal audit report. Internal audit comment We have noted that the 4th quarter meetings were rescheduled to the first quarter 2020/21 and IA can only verify the implementation of the amended procedure manual at the end of the first quarter. Revised completion date: depending on the resuming of operations, once the lockdown is lifted

14. Financial Internal Controls


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14.1 Expenses and Payables SOP is not in line with the finance administrative policy and the petty cash management policy

Management will align and finalize the Policy and Standard Operating Procedures by 01 May 2020. Original completion date: 01/05/2020

Resolved CLOSED Management comment: Management have revised the SOP to be in line with the Policy and we wait for EXCO approval of the Policy Internal audit comment The Finance Administration and Petty Cash policies have been reviewed and updated accordingly. The documents were satisfactory reviewed by IA and will be presented at the Executive Committee meeting scheduled for the 26th May 2020.

14.2 Incorrect classification of assets

• The classification in respect of computer equipment and software will be thoroughly reviewed for correctness as per transaction.

• Management has reclassified the intangible asset from the computer equipment and its related amortisation. There are no differences in figures for cost and amortisation as the amortisation method is similar to that of computer equipment Original completion date: Immediately

Resolved CLOSED Management comment: Management have reclassified the computer software from equipment. Internal audit comment During the reviewing of the 4th quarter financial statements we noted that the issue has been resolved, therefore, closed.

14.3 Reconciliation statement not timely performed and reviewed

• Management will ensure that all the reconciliations are signed by the CFO while we await the finalization of the Policy.

• The Trade Payables and Expenses SOP has been updated with the processes as per current activities, however the Policy is yet to be signed off as management wanted to ensure that all the activities as prevailing are updated in the policy at once instead of amending the Policy numerous times.

• Management will ensure that the Policy is finalized for all finance activities and signed off by 01 May 2020.

Resolved CLOSED Management comment: Management have revised the SOP to be in line with the Policy and we wait for EXCO approval of the Policy All reconciliations are reviewed and signed off by CFO before they are filed. Internal audit comment The Finance Administration and Petty Cash policies have been reviewed and updated accordingly. The documents were satisfactory reviewed by IA and will be


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Original completion date: 01/05/2020 presented at the Executive Committee meeting scheduled for the 26th May 2020. The reconciliations for the 4th quarter financial statements were reviewed and signed off by the Chief Financial Officer. Therefore, the finding is fully resolved and closed.

14.4 Ineffective monitoring of departmental budgets

• Managers are expected to respond to variance reports as part of their key performance areas, therefore consequence management must be applied by their respective supervisors.

• Finance will issue monthly reconciliations to the DMS department monthly in order that a proper comparison can be made on what the budget has been spent on.

• Northern Cape Provincial Manager commits that the deficiency will cease to exist with immediate effect and that with the assistance of the Senior Manager in monitoring the reports she will not repeat the same. Original completion date: 01/04/2020

Unresolved Partially Resolved Management comment: All the managers have been issued with their monthly variance reports. Responses were received from all managers except for LIM, DMS (even after Finance have issued the SM with the Panellist payment spreadsheet on 15 April 2020). Manager-NC submitted on 08 May 2020. Management will send a follow-up email to Senior Manager DMS again after 15 May 2020 Revised completion date: 31 May 2020 Internal audit comment We have noted the corrective action plan by Finance and their efforts to close the finding. However, the noted business units are not complying with the process, hence the finding remain open. We urge the respective line managers to ensure compliance by reviewing their monthly variance reports and submit to finance accordingly.

14.5 Monthly departmental budget not issued to the departmental manager

• Management will maintain a checklist of the reports sent out and responses received.

• This checklist will be filed in the budget management file. Original completion date: Immediately

Resolved CLOSED Management comment: All the managers have been issued with their monthly variance reports by 09 Apr 2020. Checklist has been created for monthly reports.


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Internal audit comment We have noted the management plan and satisfies with the additional control put in place.

14.6 Late submission of monthly variance expenditure reports

• Going forward the Limpopo Provincial Manager will communicate upfront with Finance officials in case there is going to be any unforeseeable delays in submitting required reports.

• Senior Manager, CBS will comply with the timelines for responses to Finance. This will be done as from March 2020 Finance Variance Report.

• Northern Cape Provincial Manager maintains a register of key performance indicators and their due dates. The register will be updated and monitored effectively.


Unresolved OPEN Management comment: All the managers have been issued with their monthly variance reports. Late response was received from Manager-NC Internal audit comment We have noted the corrective action plan by Finance and their efforts to close the finding. However, the noted business units are not complying with the process, hence the finding remain open. We urge the respective line managers to ensure compliance by reviewing their monthly variance reports and submit to finance accordingly.

14.7 Ineffective controls over the approval of petty cash vouchers

• Clear guidelines to be documented in the Policy and SOP for the Executive Services petty cash processes.

• Management to ensure that all vouchers are signed before transactions take place.

• Finance will ensure that all the vouchers are complete and signed before the transactions are recorded in Evolution.

• Northern Cape - All submissions by the Administrator will henceforth be double checked before submission to Finance.


Partially resolved OPEN Management comment: Management have revised the SOP to be in line with the Policy and we wait for EXCO approval of the Policy Internal audit comment The Finance Administration and Petty Cash policies have been reviewed and updated accordingly. The documents were satisfactory reviewed by IA and will be presented at the Executive Committee meeting scheduled for the 26th May 2020. The approval of the petty cash vouchers will only be verified once business operations are in full swing. For now, we cannot give significant assurance on the effectiveness of the process.