Department taking the auditor-general to court

It’s not willing to obtain an unqualified audit outcome

THE Western Cape Department of Economic Opportunities is taking the auditor-general to court seeking an order reviewing and setting aside disputed findings, which should result in the department obtaining an unqualified audit outcome.

Economic Opportunities MEC Alan Winde’s spokesperson, Bianca Capazorio, said: “I can confirm that the Western Cape Department of Economic Opportunities will be challenging the AG matter in court. Papers will be served shortly, but a specific day has not been identified.”

The department will be approaching the Western Cape High Court for an order reviewing and setting aside the disputed findings and ask that the auditor-general apply the applicable standards correctly, which should result in an unqualified audit outcome.

The auditor-general’s office requested the department to alter its recordings of payments of R266 million to Casidra and Hortgro, from transfer payments to goods and services, before it could give an opinion on the department’s 2016/2017 audit.

The entities provide services on behalf of the department to farmers and communities that range from flood and drought relief to programmes that support emerging farmers.

Capazorio said the matter boiled down to a difference in technical interpretations between the Department of Agriculture and the office of the auditor-general regarding the auditor-general’s findings in respect of the department’s classification of certain payments made to entities involved in farmer settlement and disaster relief projects in the Western Cape.

“To confirm, the finances of the department have not gone unaudited; rather, there has been a delay in the release of the AG’s final audit report for the 2016/2017 financial year end, due to the above matter. The dispute relates to findings in both the 2016/17 and 2017/18 audit reports. The department and the auditor-general’s office have been engaging on the matter for some time but have been unable to find common ground. The department has decided to approach the Western Cape High Court for relief. It is anticipated that its application will be launched soon,” she said.

Capazorio also said there were contracts in place between the department and the institutions (Casidra and the Deciduous Fruit Producers Trust), and historically, payments have been made, and classified, in the department’s financial statements as transfers without any adverse audit findings at all.

“However, there was a recent change in the AG’s approach and interpretation of the relevant standards, which has resulted in unexpected adverse findings in the audit reports involved. The Department of Agriculture disagrees with the auditor-general’s interpretation and wishes to challenge the findings in a formal forum, as it is entitled to do,” she said.

The auditor-general has previously said the request for a change in the department’s financial records came after new accounting standards were put in place and required the payment be changed from transfer payments to goods and services.

Senior communications head at the auditor-general’s office, Africa Boso, did not reply to messages sent via email yesterday.

Papers will be served very shortly, but a specific day has not been identified for this to be done

MEC Alan Winde’s spokesperson