Qualified audit for Justice Dept

THE DEPARTMENT of Justice has received a qualified audit for the past financial year, largely because of its failure to properly manage the hundreds of millions of rand paid in by way of bail, maintenance, fines and other legal costs.

Auditor-General Terence Nombembe red-flagged Third Party Funds, saying it had not submitted financial statements by March 31 for auditing.

Nombembe could not satisfy himself that almost R300 million owed to the department in “fines, penalties and forfeits” had been “properly collected, accurately and completely recorded and classified by the fund and surrendered” to the department.

His report highlights potential claims against the fund to the value of nearly R80m, as a result of “fraud, theft and losses” to be paid by the department – but said he couldn’t be sure whether they were genuine or complete.

“I did not obtain all the information and explanations I considered neces- sary to satisfy myself as to the completeness, existence, rights and obligations and valuation of the shortfall identified in the accounting records of the fund,” Nombembe said.

Administering the Third Party Funds has been a continuing problem for the department.

In 2009/ 10, the department launched a “financial turnaround” project aimed at dealing with this and other issues related to irregular expenditure and lack of financial capacity and controls – with the aim of achieving a clean audit in 2012/13.

Nombembe found other problems with the department’s books, including material misstatements of its current liabilities, revenue, expenditure and disclosure items – but most of these were corrected during the course of the audit and it was the failure to produce statements for the Third Party Funds that led to his qualified audit opinion.

The department has an annual budget of just over R13 billion, excluding the salaries of judges and magistrates, which amount to R2.4bn a year.