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HSRC Annual Report 2016/17
26. Prior period errors – adjustments
The following prior period errors have been identified and the specific effect on Financial Statements have been set
out in Note 26.1. These errors have been corrected and comparatives restated accordingly and rounded off (R’000). The
effect on previously reported financial statements is also indicated:
To enhance presentation and provide more detailed information to the users, additional line items have been reclassified
or disclosed separately. Such adjustments had no financial impact on the surplus of the HSRC and as such were not
disclosed separately in this note. Items, disclosed below, are those that had an impact on the results previously reported.
These prior period errors have no tax effect as the HSRC is exempt in terms of the Income Tax Act.
26.1 Misstatement of revenue and expenditure items
Description
Key
Adjustment R’000
Increase administrative expenses
(i)
341
Decrease in income received in advance
(ii)
126
Increase in other operating expenses
(i)
185
Increase in research cost
(i)
230
Increase in research revenue (from exchange transactions)
(ii)
(125)
Increase in trade and other payables
(i)
(757)
Increase in depreciation
(iii)
38
Increase in accumulated depreciation
(iii)
(38)
(i) An adjustment on depreciation related to artwork that had not been depreciated correctly in the 2015/16 financial
year.
(ii) Adjustment as a result of additional expenses received in the 2016/17 pertaining to the 2015/16 financial year and
had not been accrued for as at 31 March 2016.
(iii) Adjustments noted in (i) above included entries on research projects and resulted in adjustments in external income
and income received in advance.
27. Irregular expenditure
2017
R ‘000
2016
R ‘000
Opening balance
3,968
-
Irregular expenditure – current year with goods received at
reasonable market rates
6,465
3,968
Irregular expenditure – current year with goods not received
-
-
Irregular expenditure – condoned
(3,968)
-
Irregular expenditure awaiting condonement
6,465
3,968
Analysis of irregular expenditure
A significant portion of the irregular expenditure recorded relates to the refurbishment of our Cape Town offices,
where a certain portion of additional construction costs were incurred without following the normal SCM processes.
This was largely as a result of unanticipated timelines associated with the entire relocation project. An independent
investigation was commissioned to identify internal defficiencies and lessons for future reference. The main project
manager unfortunately left the HSRC after concluding a mutual termination agreement. Although the expenses were
disclosed as irregular due to a purchase order not being issued before the service provider installed the changes, the
independent review and the HSRC’s Audit and Risk Committee verified that it was indeed value for money and the
structures installed were necessary for the HSRC staff to occupy the building. Other instances of irregular expenditure
relate to emergency procurement necessitated by unanticipated project timelines which resulted in the impracticability
of competitive sourcing of service providers.