Medical Schemes Act, 1998 (Act No. 131 of 1998)

Regulations

Regulations in terms of the Medical Schemes Act

Annexures

Annexure C : Independent Auditors Report template
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Part C 1

 

Report of the independent auditors of ............................. (name of administrator) to the Registrar of Medical Schemes in compliance with Regulation 17(2)(d) under the Medical Schemes Act, 1998;

 

1)We have reviewed the system of internal financial control of .... (name of administrator).

 

2)The maintenance of an adequate system of internal financial control is the responsibility of the directors/partners/sole proprietor. Our responsibility is to report on whether or not, based on our review, anything has come to our attention that would indicate that the system of internal financial control is not adequate for the size and complexity of the business of the medical scheme or medical schemes administered.

 

Scope

 

3)We conducted our review in accordance with the statement of South African Auditing Standards applicable to review engagements. This standard requires that we plan and perform the review to obtain moderate assurance with regard to the system of internal financial control. A review is limited primarily to inquiries of personnel of the administrator, inspection of evidence and observation of, and enquiry about, the operation of the internal control procedures for a small number of transactions.

 

Inherent limitations

 

4)Because of the inherent limitations of a system of internal financial control, including concealment through collusion or forgery, it is possible that errors and irregularities may occur and not be detected.

 

A review is not designed to detect all weaknesses in the system of internal financial control as it is not performed continuously throughout the period and the tests performed are on a sample basis.

 

Any projections of the evaluation of the system of internal financial control to future periods is subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with them may deteriorate.

 

5)Also, a review does not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than given in an audit.

 

6)We have not performed an audit and, accordingly, we do not express an audit opinion.

 

(b) Review opinion

7)Based on our review, nothing of significance has come to our attention that causes us to believe that the system of internal financial control is not adequate for the size and complexity of the business of the medical scheme or schemes administered.

 

Name

Registered Accountants and Auditors

Chartered Accountants (SA)

Date

Address

 

Note: In the case of a new administrator, i.e. where the system of internal financial control has not yet been implemented by the administrator, the text in the square brackets should be included in the report.

 

Part C 2

 

Report of the independent auditors of .... (name of administrator) to the Registrar of Medical Schemes in compliance with Regulation 25 under the Medical Schemes Act, 1998

 

A.Annual financial statements

 

1)We have audited the attached annual financial statements of .... (name of administrator) ("the administrator) set out on pages .... to .... for the year ended ..... The annual financial statements are the responsibility of the directors/partners/sole proprietor. Our responsibility is to express an opinion on these financial statements based on our audit.

 

Scope

 

2)We conducted our audit in accordance with statements of South African Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance that the annual financial statements are free of material misstatement. An audit includes:
1)examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements;
2)assessing the accounting principles used and significant estimates made by management; and
3)evaluating the overall financial statement presentation.

 

3)We believe that our audit provides a reasonable basis for our opinion.

 

Audit opinion

 

3)In our opinion the annual financial statements fairly present, in all material respects, the financial position of the administrator at and the results operations and cash flows for the year then ended in accordance with generally accepted accounting practice and in the manner required by the Companies Act, 1973 (include where appropriate).

 

B.Consideration of the system of internal financial controls

 

4)In planning and performing the above-mentioned audit, we considered the system of internal financial control of the administrator in order to determine our audit procedures for the purpose of expressing our audit opinion on the annual financial statements, not to provide assurance on the system of the internal financial control.

 

5)The directors/partners/sole proprietor of(name of the administrator) are/is responsible for establishing and maintaining an effective system of internal financial control. In fulfilling this responsibility, estimates and judgements by the directors/partners/sole proprietor are required to assess the expected benefits and related costs of internal financial control policies and procedures. Two of the objectives of a system of internal financial control are to provide the directors/partners/sole proprietor with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorised use or disposition and that transactions are executed in accordance with their/his/her authorisation and recorded properly to permit preparation of annual financial statements in conformity with generally accepted accounting practice.

 

6)Because of the inherent limitations of a system of internal financial control, it is possible that errors or irregularities may occur and not be detected. Furthermore, any projection of the evaluation of a system of internal financial control to future periods is subject to the risk that the procedures may become inadequate because of changes in circumstances, or that the degree of compliance with them may deteriorate.

 

7)Our consideration of the system of internal financial control would not necessarily disclose all matters in the system that might be material weaknesses. A material weakness is a condition in which the design or operation of the specific internal financial control does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the annual financial statements being audited, may occur and not be detected within a timely period by employees in the normal performance of their assigned functions.

 

8)However, based on our consideration of the system of internal financial control for purposes of our audit, nothing of significance has come to our attention that causes us to believe that the financial record keeping and the system of internal financial control are not adequate for the size and complexity of the business the administrator is presently conducting. All changes to the system of internal financial control that came to our attention during the course of our audit have been recorded in writing.

 

9)This report is intended solely for the use of the Registrar of Medical Schemes and is not to be distributed to other parties.

 

Name

Registered Accountants and Auditors

Chartered Accountants (SA)

Date

Address

 

Note: In the case of a sole proprietor, reference to "administrator" should be read as reference to the administration business of the sole proprietor.