report items. 12 Asset Significant Management 1. The depreciation 1. Management 31-Jan-18 Chief Cannot be tested In progress Management control should review the miscalculation will ensure that Financial the - midyear deficiencies fixed asset resulted from effect there are proper Officer implementation processing relating to the register to ensure on useful life reviews for the date has not yet is fixed assets it is accurate and extension (being a measurement passed executed register and correct the and estimate for while the resulting depreciation and system useful lives, change in impact on the accumulated procedures). It is impairment, estimate depreciation depreciation submitted that this including procedures expense balances as at function should depreciation and and year end. The have been tested all other adjusting valuations remaining useful intensely at the entries. will be lives as included system sign-off 2. Management completed in the Pastel stage. to continuously at System should be 2. At the point of review the reviewed and data migration into financial records, corrected to the new system to ensure that ensure the environment, no financial depreciation is proper change information is correctly control procedures complete, calculated going were followed as accurate and forward and the ICT Department relevant. Monthly assets not working and other control reconciliations should be steps were between GL and impaired. engaged thus, the FAR module will Furthermore, an Pastel system was be completed annual impairment not adequately and reviewed. review should be reviewed (parallel implemented. system testing during transition, etc.) 3. Inadequate review systems due to lack of capacity/poor
report items. 12 Asset Management Significant control deficiencies relating to the fixed assets register and resulting impact on the depreciation expense Management should review the fixed asset register to ensure it is accurate and correct the depreciation and accumulated depreciation balances as at year end. The remaining useful lives as included in the Pastel System should be reviewed and corrected to ensure the depreciation is correctly calculated going forward and assets not working should be impaired. Furthermore, an annual impairment review should be implemented. 1. The depreciation miscalculation resulted from effect on useful life extension (being a system procedures). It is submitted that this function should have been tested intensely at the system sign-off stage. 2. At the point of data migration into the new system environment, no proper change control procedures were followed as the ICT Department and other control steps were engaged thus, the Pastel system was not adequately reviewed (parallel system testing during transition, etc.) 3. Inadequate review systems due to lack of capacity/poor 1. Management will ensure that there are proper reviews for the measurement and estimate for useful lives, impairment, including depreciation and all other adjusting entries. 2. Management to continuously review the financial records, to ensure that financial information is complete, accurate and relevant. Monthly reconciliations between GL and FAR module will be completed and reviewed. 31-Jan-18 Chief Financial Officer Cannot be tested the implementation date has not yet passed In progress - midyear processing is executed while the change in estimate procedures and valuations will be completed at
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