About SABS - Corporate Governance

The SABS is committed to the principles of openness, integrity and accountability and continually reviews processes and practices to ensure compliance with legal obligations and adherence to good corporate governance practices. Compliance with the King Report on Corporate Governance and the Public Finance Management Act 1999 (Act no 1) is therefore an integral part of the objectives as approved by the Council.

Income

Our core business units are financed by monies allocated for that purpose under the dti. This grant is used to create and strengthen operational and technological core competencies and capacity to support the relevant national initiatives. Inspections and tests, which are carried out for the private sector, industry, national government, provincial and local authorities, as well as the certification of products and systems, are funded on a commercial basis by fees charged for services rendered.

Financial Statements

The SABS Board and Executive Management are responsible for preparing financial statements in a manner that fairly presents the state of affairs and results of the operations of SABS and its subsidiary. These are prepared in accordance with Statements of South African Generally Accepted Accounting Practice, the Companies Act and the Public Finance Management Act. They are based on appropriate accounting policies and are supported by reasonable and prudent judgments and estimates.

The external auditor is the Auditor-General, who is responsible for carrying out an independent examination of the financial statements in accordance with Statements of South African Auditing Standards and reporting its findings thereon.

Internal controls

We maintain internal controls and systems designed to provide reasonable assurance as to the integrity and reliability of the financial statements and to adequately safeguard, verify and maintain accountability for its assets. Such controls are based on established policies and procedures and are implemented with an appropriate segregation of duties.

The internal audit function operates under the direction of the Audit Committee, which approves the scope of the work to be performed. Significant findings are reported to both executive management and the audit committee. Corrective action is taken to address internal control deficiencies identified in the execution of its work. The annual audit plan is based on key financial risks to the organisation. The work programme that gives effect to the plan is reviewed by the Audit Committee bi-annually and ratified or modified as necessary.

We also implement a zero tolerance fraud prevention plan.

Management reporting on financial status

There is comprehensive management reporting disciplines in place, which include the preparation of annual budgets by all operating units. Monthly results and the financial status of operating units are reported against approved budgets and compared to the prior year. Profit projects and cash flow forecasts are updated monthly, while working capital and cash/borrowing levels are monitored on an ongoing basis.

Management & Control

SABS was established in terms of the Standards Act, 1945 (Act No. 24 of 1945) and operates in terms of the current edition of the Standards Act, 2008 (Act No. 8 of 2008).

The Standards Act designates the Minister of Trade and Industry (the dti) as the Executive Authority (in terms of the Public Finance Management Act (PFMA) definition).

The Minister appoints the SABS Board and the Chairperson of the Board who perform a similar role to a Board of Directors.

In addition to its non-commercial standards function, SABS also wholly owns a commercial entity, SABS Commercial SOC Limited, which provides conformity assessment and training services on a commercially basis. This commercial company operates under the Companies Act. It reports to, and is governed by a Board comprising the SABS CEO, the SABS CFO and members of the SABS Board.