Only use registered auditors for schools’ financial statements

IN THE first quarter of 2018, public schools are finalising their financial statements for the year ended December 31, 2017.

The financial statements must be drawn up no later than March 31 and submitted for audit or examination.

The audited or examined financial statements must be submitted to the provincial heads of department by June 30.

Section 43(1) of the SA Schools Act (Sasa) requires that only a person registered as an auditor in terms of the Auditing Profession Act, 2005 (Act No 26 of 2005), may audit the records and financial statements of a public school.

Circular M1 of 2017 of the National Department of Basic Education states that school governing bodies (SGBs) of public schools must appoint registered auditors.

Only in cases where it is not practical to appoint an auditor can they obtain approval from the province’s MEC to appoint a person qualified to perform the duties of an accounting officer of a close corporation to perform an examination in accordance with section 43(2) of the Sasa.

“The South African Institute of Chartered Accountants (Saica) has, through its engagement with schools and the provincial departments of basic education, learnt of instances where the SGB members identified individuals or firms that are not qualified to be auditors,” says Julius Mojapelo, Saica senior executive: public sector.

“The consequence of this practice is the issuance of reports that are not in line with required standards of auditing, which result in the provincial departments of education placing reliance on invalid reports when making allocations to schools.

“This, in turn, brings the chartered accountancy and the auditing profession into disrepute by individuals who are not even members of the profession.

“That is why Saica has launched a School Audits Support platform for schools that would like to confirm the status of their auditors or ask any questions regarding the audit process.

“Schools can send an e-mail to schoolaudits@saica.co.za with the details of their enquiry, and Saica will provide them with clarity and guidance in this regard,” said Mojapelo.

Saica would also like to remind schools that the Independent Regulatory Board for Auditors maintains a search-enabled database on its website (www.irba.co.za) that schools can use to find auditors in their area. The SA Institute of Chartered Accountants, South Africa’s pre-eminent accountancy body, is widely recognised as one of the world’s leading accounting institutes. The institute provides a wide range of support services to more than 42 000 members and associates who are chartered accountants, as well as AGAs and ATs, who hold positions as CEOs, MDs, board directors, business owners, chief financial officers, auditors and leaders in every sphere of commerce and industry, and who play a significant role in the nation’s highly dynamic business sector and economic development.