OFFICE OF THE OMBUD FOR FINANCIAL SERVICES PROVIDERS

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• OFFICE OF THE OMBUD FOR FINANCIAL SERVICES
  PROVIDERS
• Mr. Michael Gcwabaza
• 23 AUGUST 2005
• PRESENTATION
• TO THE PARLIAMENTARY PORTFOLIO COMMITTEE
• ON FINANCE

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• FUNDING OF THE OFFICE
• Section 22 of the FAIS Act covers matters
  relating to funding sources
• 1. FAIS Levy
• 2. Case fees
• 3. Funding for special projects

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• 1. FAIS LEVY
• This is the PRIMARY SOURCE of funding
• Funding is on the basis of the Office budget
  approved by FSB
• The FSB collects FAIS Levies from the industry
  and allocates such to fund the operations of the
  FAIS Ombud and FAIS department of the FSB on 25
  75 split

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• 2. CASE FEES
• Section 22 of the FAIS Act allows the FAIS
  Ombud to charge case fees from Financial Services
  Providers against whom a complaint has been
  lodged and accepted for adjudication
• The case fee is R 1,000
• This is not the primary source of income

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• 3. SPECIAL PROJECT FUND
• FAIS Act allows for FAIS Ombud to source
  funding from any potential source including donor
  funding in order to advance the interests of the
  Office. As yet, this has not happened

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• FINANCIAL YEAR CYCLE
• The Year begins on April 01
• The Year ends on March 31

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• ACCOUNTABILITY
• The Ombud is the Accounting officer
• The accounting authority is the FSB
• The FAIS Committee subcommittee of the FSB
  oversees our administrative operations
• The Office is in compliance with the following
• PFMA, in terms of procuring and controlling
  expenditures
• GAAP, in terms of record keeping
• Generally Accepted Auditing Standards,
• Corporate Governance

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• FINANCE FUNCTION
• The Office operates a dedicated bank account as
  required by Section 22(2)
• In 2003/2004 the accounting function was
  outsourced to FSB and PWC
• Since 01 April 2005 Accounting is done in-house
  using ACCPAC financial system
• The 2004 Audit Report Unqualified
• The 2005 Audit Report Unqualified
• Internal Audit function

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• REPORTING
• 2004 Inaugural Annual Report
• 2005 Annual Report due by September 30
• First year of operations set up costs incurred
  by FSB to establish the Office
• Second year of operations
• - staffing,
• - putting systems in place, and -
  adjudication of complaints

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• FINANCIAL RESULTS
• January 2005 levy from FSB R 1.8 m
• July 2005 levy from FSB R .9 m
• November 2005 estimated levy R 8.8 m
• Loan owing to the FSB, March 2005 R 7.7 m
• The loan is resulting from delays in the
  invoicing and receiving of FAIS levies the role
  of the FSB
• It is projected that the loan will be repaid over
  a two year period after which the Office will run
  a balanced budget and later accumulate surpluses

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• THANK YOU!