NATIONAL PUBLIC ENTITIES
FINANCIAL STATEMENTS TEMPLATE TRAINING
NATIONAL TREASURY
Presenter: Mr. John Watson, Director AS&R
| 7 MARCH 2014
Program
1. 2014 PE Consolidation Process
2. 2014 AFS Template
3. Submission Deadlines
4. GRAP update
5. Year End Procedures 2013/14
6. Accounting Support during 2013/14 audit process
2
2014 PE Consolidation Process
If we understand the WHY it will help us with the WHO,
WHAT, HOW, WHEN and WHERE.
• PFMA Section 8
• GRAP 6, 7 & 8
• Auditor-General of South Africa
• Transparency
3
2014 PE Consolidation Process
TRANSPARENCY
-
Standard policies, understandable to users. SPO analysis on capital and
financing position and expenditure
COMPARABILITY
- Convergence of accounting policies, useful to users
ACCOUNTABILITY
- Independent audit, scrutiny by Parliament and public
COMPLETENESS
- Consolidates all similar data, complete analysis to users
4
2014 Public Entity Consolidation Process
• NT responsible for identifying entities to be included
• PFMA listed entities and unlisted entities
• Only institutions applying the accrual basis of accounting
• Consolidated Financial Statements in terms of GRAP
• Financial statements of each entity within the group
– combined on a line by line basis
– adding like items of assets, liabilities, net assets,
revenue and expenses
5
2014 Public Entity Consolidation Process
BIG changes for 2014
1. AFS Template is based on 2013 but updated and enhanced
2. Inter-entity for current year and prior year
3. New conversion journals for current year and prior year
4. New Management sign-off template
5. New External Audit sign-off template
6. New requirements for entities with 30 June year end
6
2014 Public Entity Consolidation Process
1. AFS Template is based on 2013 but updated and enhanced
– Aligned to published consol annual report for 2013
– Must enable macros or it will not work
– Improved verification (red cells)
– Includes new worksheets on
•
Inter-entity
•
Conversion
•
Uncorrected misstatements
7
2014 Public Entity Consolidation Process
2. Inter-entity for current year and prior year
– Why? GRAP requirement (GRAP 6.46)
– Not the same as related parties
– Includes prior period to have accurate comparatives
– Entities should implement system to track transactions
– Make use of supplier database / customer database
– Share your information with other entities
– Tested by external auditors
– Different entities list for provinces (arranged with PAGs)
8
2014 Public Entity Consolidation Process
3. New conversion journals for current year and prior year
– Why? GRAP requirement (GRAP 6.51)
– Aligns entity’s normal AFS to Group Accounting Policies
– Identify difference in accounting policy > journal entries
– Journal per line items in the SCOA
– If final AFS figures change > update your journal entries
– NT will pass journals on final consolidation
– Tested by external auditors
9
2014 Public Entity Consolidation Process
4. New Management sign-off template
– Why? PFMA requirement – 40(1)(b) / 55(1)(b)
– Confirmation of compliance with NT instructions
– Inter-entity complete, valid and accurate
– Conversion journals complete, valid and accurate
– Unadjusted audit misstatements recorded
– External audit has tested the AFS template
10
2014 Public Entity Consolidation Process
5. New External Audit sign-off template
– Why? Do not need full audit opinion for consol purposes
– Document discussed with AG and big 4 firms
– Testing whether AFS template agrees to normal AFS
– Testing inter-entity and testing conversion journals
– Confirming unadjusted audit differences (misstatements)
– Sign-off submitted to management of entity
11
2014 Public Entity Consolidation Process
6. New requirements for entities with 30 June year end
– Why? GRAP requirement (GRAP 6.48)
– TB for 31 March 2014 (3 months + 9 months)
– Management accounts OR financial statements for 12
months ended 31 March 2014 based on above trial
balance
– Material entities will be requested to obtain additional audit
assurance on the management accounts / financial
statements for 12 months. A separate communication to
this effect will be sent out to these entities.
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2014 AFS Template
Before you start working on your template know the following:
1. Template is 32bit
2. Must read the instructions and do things in right order
3. Workbook and worksheets are locked
4. Do not delete rows or columns or highlight cells
5. Fill in as much information as possible in the yellow cells
6. Remember to save your work
13
2014 AFS Template
Initial Questionnaire and Instructions
14
2014 AFS Template
Income & Expenditure Mapping
15
2014 AFS Template
Assets Mapping
16
2014 AFS Template
Liabilities Mapping
17
2014 AFS Template
Net Assets Mapping
18
2014 AFS Template
SCOA
19
2014 AFS Template
Calculation Sheets
1. CALC SHEET – NON-CURRENT ASSETS
2. CALC SHEET – CURRENT ASSETS
- Property, Plant and Equipment
- Intangible Assets
- Biological Assets
- Investment Property (Cost/Fair Value)
- Heritage Assets
- Non-Current Receivables
- Non-Current Investments
- Trade and Other Receivables – Exchange
- Cash and Bank
- Inventories
- Pre-Payments
- Receivables from Non-Exchange Transactions
- Finance Lease Receivables
- Construction Contract Debtors
3. CALC SHEET – LIABILITIES
4. CALC SHEET – EXCHANGE RECEIVABLES
- Trade and Other Payables – Exchange
- Finance Lease Obligations
- Employee Benefits
- Provisions
- Long Term Borrowings
- Exchange receivables
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2014 AFS Template
Notes to the financial statements
1. Populated by SCOA and Calculation sheet amounts
2. Some note numbers have changed after alignment process
3. Complete all relevant yellow highlight areas
4. Check if note agrees to POS, PER, CFS or NA
5. Blue help button is there if need assistance
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2014 AFS Template
Statement of Financial Position
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2014 AFS Template
Statement of Financial Performance
23
2014 AFS Template
Statement of Changes in Net Assets
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2014 AFS Template
Cash Flow Statement
25
2014 AFS Template
Inter-Entity
26
2014 AFS Template
Conversion Journals
27
2014 AFS Template
Uncorrected Misstatements
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Submission deadlines
31 MAY 2014
No.
Document name
Hard Copy
Printout of the following signed by
management:

Statement of Financial Position

Statement of Financial Performance

Statement of Cash Flows

Statement of Changes in Net Assets
1.
GRAP AFS Template
2.
Inter-entity template
Printout signed by management
3.
Conversion journals
Printout signed by management
4.
5.
6.
Annexure 7 - Remuneration of
executive and non-executive
management
Certified AFS submitted for
external audit
Entities with different year ends –
12 months management accounts
/ financial statements
Soft Copy (Electronic
on CD)
MS Excel
MS Excel (Part of AFS
Template)
MS Excel (Part of AFS
Template)
Due Date
30 May 2014
30 May 2014
30 May 2014
Printout signed by management
MS Excel (Not MS Word)
30 May 2014
Printout of complete document signed by
management
MS Excel preferably
30 May 2014
Printout of complete document signed by
management
MS Excel (Not MS Word)
30 May 2014
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Submission deadlines
31 JULY 2014
Document name
1.
Annexure C – Management
Confirmation
Signed original
2.
FINAL GRAP AFS Template
Printout of the following signed by
management:

Statement of Financial Position

Statement of Financial Performance

Statement of Cash Flows

Statement of Changes in Net Assets
3.
FINAL Inter-entity template
Printout signed by management
4.
FINAL Conversion journals
Printout signed by management
5.
FINAL Uncorrected Misstatements
Printout signed by management
FINAL Audited annual financial
statements
Entities with different year ends –
FINAL 12 months management
accounts / financial statements
(audited for some entities)
Annexure D – External Audit
signoff on AFS Template
External auditor’s audit report on
normal annual financial statements
Printout of complete document signed by
management
MS Excel preferably
31 July 2014
Printout of complete document signed by
management
MS Excel (Not MS Word)
31 July 2014
6.
7.
8.
9.
Hard Copy
Soft Copy (Electronic
on CD)
Scanned document
(PDF)
No.
Copy of signed original
Copy of signed original
MS Excel
MS Excel (Part of AFS
Template)
MS Excel (Part of AFS
Template)
MS Excel (Part of AFS
Template)
Scanned document
(PDF)
Scanned document
(PDF)
Due Date
31 July 2014
31 July 2014
31 July 2014
31 July 2014
31 July 2014
31 July 2014
31 July 2014
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Year End Procedure 2013/14
• To be issued before 31 March 2014
• Purpose is to remind:
– Accounting Officers (AO) and Accounting Authorities
(AA) of important financial year end procedures and
closure/submission dates relating to the preparation
and auditing of AFS and preparation of Annual
Reports (AR).
– AA of entities with a financial year end other than 31
March of important financial year end procedures and
submission dates relating to preparation and auditing
of AFS and preparation of AR.
31
Year End Procedure 2013/14
Annual Report Submission Dates
Action
PFMA
Date
Responsibility
Reporting date
55(1)(b)
31/03
Accounting Authority (AA) /
Accounting Officer (AO)
Submit approved financial
statements and report of the
accounting officer to relevant
treasury and Auditor-General
for Auditing
55(1)(c)(i) & (ii)
30/05 ( final date)
(Within 2 months after
year-end)
AA / AO
Submission of audited financial
statements
As per the MCS
31/07
AA / AO
Submission of annual report,
annual financial statements and
audit report to relevant treasury
and the executive authority
responsible for the public entity.
55(1)(d)
29/08
(Within 5 months after
year-end)
AA / AO
Executive authority to table in
National Assembly or provincial
legislature
65(1)(a)
Within one month after the
AA received the audit
report
Minister / MEC
Year End Procedure 2013/14
Due date for submission to:
OAG
ALM (if applicable)
Unaudited
financials
Copies:
30/05/2014
30/05/2014
1
1
Audited
financials
Copies:
31/07/2014
31/07/2014
1
1
Annual Reports
Copies:
29/08/2014
13/06/2014
3
1
Year End Procedure 2013/14
Confirmation Letters:
• Submission of AFS
– Accounting Authority (AA) / Accounting Officer (AO) accepts
responsibility for the accuracy & fair presentation of the AFS
submitted to AG & relevant treasury
• Submission of Annual Report incl. Performance
Information
– AA/AO accepts responsibility for the accuracy & fair
presentation of the AFS & PI submitted to AG & relevant
treasury
– AGSA will review the contents of the AFS for consistency
34
Year End Procedure 2013/14
Performance Information to Auditors:
• The performance information in the annual report
– Needs to be submitted for audit purposes on 30 May 2014
– External Auditor’s PFMA deadline is 31 July 2014.
35
GRAP Update
REPORTING FRAMEWORK AT A GLANCE (DIRECTIVE 5)
2011/2012
2012/2013
2013/2014
Improved Standards of
GRAP & IGRAPs
New Standards that
New Standards become
became effective:
effective:
GRAP 21, 23, 24, 26, 103
and 104
GRAP 25: Employee
Benefits
Early Adopt
• GRAP 21, 23, 24, 26,
103
Accounting Policy:
GRAP 25, 105 – 107
Accounting Policy:
• GRAP 25, 105 – 107
Accounting Policy:
• GRAP 25, 104 – 107
36
GRAP Update
Employee Benefits previously accounted for in terms of IAS 19 however since 1 April 2013
required to account for in terms of GRAP 25, unless early adopted.
Nature of
difference
IAS 19
GRAP 25
Impact
Actuarial gains
and losses
Allows the deferral of actuarial
gains and losses using the
“corridor method”
Requires full recognition of actuarial
gains and losses in surplus or deficit
in the year they occur
No longer an option available on
recognition of actuarial gains and
losses, everything is recognised
immediately in surplus or deficit
when they occur
Past service
costs
Requires the recognition of past
service cost on a straight-line
basis over their vesting period, in
surplus or deficit
Requires full recognition of past
service cost in the year they arise
No more deferral of service cost
over the vesting period, everything
is recognised immediately in
surplus or deficit when they arise
Discount rate
used to measure
the defined
benefit liability
The discount rate is determined
by reference to yields on highquality corporate bonds
Requires that the discount rate be
determined by reference to yields on
government bonds
Use government bond rates
Accounting Support during 2013/14 audit process
Name of OAG representative within NT
Province
Cluster
Star Kafu
KZN & NW
Justice
GP
Social Services
NC & FS
Economic Services
EC & MP
Finance & Admin
WC
Central Government
LP
NRF
Telephone: 012 315 5794
Email: star.kafu@treasury.gov.za
Thomas Matjeni
Telephone:012 315 5792
Email: thomas.matjeni@treasury.gov.za
John Watson
Telephone: 012 315-5590
Email: John.Watson@treasury.gov.za
Keitumetse Malebye
Telephone: 012 315 5989/5281
Email: keitumetse.malebye@treasury.gov.za
Thokozile Motsweni
Telephone : 012 315 5233
Thokozile.Motsweni@treasury.gov.za
Lizette Labuschagne
Telephone : 012 315 5781
Lizette.Labuschagne@treasury.gov.za
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THANK YOU
39