Cape Town — There were so many fault lines in the 2005-06 financial statements of the Companies and Intellectual Property Registration Office (Cipro) that outgoing auditor-general Shauket Fakie had to issue a disclaimer of an audit opinion.

Fakie's report, tabled with the Cipro annual report in Parliament yesterday, is the latest of a string of negative audit opinions on the office which is responsible for the registration of companies, close corporations and co-operatives.

In the 2004-05 financial year, Cipro also got a disclaimer, one of the worst audit opinions possible.

Cipro executives were grilled a few weeks ago by Parliament's standing committee on public accounts about Fakie's negative findings in a special performance report.

The committee called for top Cipro officials to be held accountable for the malaise within the organisation.

Fakie's latest report showed that matters have not improved much since his previous disclaimer, though newly appointed CEO Keith Sendwe has vowed to get things in shape.

Cipro has also been criticised by business for the long delays in processing data but the annual report suggested that significant improvements had been achieved in turnaround times.

Fakie's disclaimer was based on what he said was "a generally weak internal control environment" at the office.

This, he said, could mainly be attributed to "the level of vacancies, rate of staff turnover and various acting positions at senior management level and within the finance department. The entity does not have an approved staff establish-ment."

The Public Finance Management Act had not been complied with in that policies and procedures were either nonexistent or not strictly enforced.

There was also a lack of proper financial and performance management systems, and treasury regulations had been flouted.

Inadequate policies, or the weak enforcement of them, had resulted in weaknesses in inventory and asset management, and procurement. The inadequate billing system also meant Fakie could not obtain sufficient audit assurance that income received in advance of R21m actually existed or was correctly valued.

Meanwhile, Trade and Industry Minister Mandisi Mpahlwa said in a written reply to a parliamentary question by Democratic Alliance MP Pierre Rabie that there were about 1-million post-registration documents waiting to be scanned by Cipro. He emphasised, however, that scanning did not affect the time it took to register companies, close corporations and co-operatives.

Mpahlwa said Cipro was investigating the use of compression technology. In conjunction with the State Information Technology Agency, it was also in the process of developing an electronic content management system which would help improve its capacity to process and record registrations.