Following an extensive tender process over the past year, in the interest of good governance, the Board resolved on 6 March 2024 to rotate its audit firm and appoint PwC as the new auditor of these two umbrella funds starting from the financial year ending 31 December 2023.
The plan had been to appoint a new audit firm only from the financial year ending 31 December 2024, but the appointment date had to be brought forward because of the previous audit firm RSM South Africa Inc (“RSM”) suddenly resigning as auditor of the Sanlam Umbrella Provident Fund on 16 February 2024. RSM’s reason for resigning as auditor was that RSM had acquired an audit firm who was a participating employer in the Sanlam Umbrella Provident Fund. This introduced a possible conflict of interest to RSM’s independence which they were unable to fully resolve.
Although RSM were prepared to continue as auditor of the Sanlam Umbrella Pension Fund, the Board decided that working with two separate audit firms for the 2023 audit would not be an efficient approach to the audit nor cost effective.
Hence, PwC have been appointed auditor of the two umbrella funds one year earlier than they had envisaged and one year earlier than they had planned their resources. This is no easy challenge to resolve given the size and scale of these two umbrella funds which are both amongst the biggest retirement funds in the country. This will therefore have an impact on the date that the 2023 audited financial statements can be finalised, approved, signed and submitted to the FSCA. Based on PwC’s guidance, the Board have therefore applied to the FSCA for a 6-month extension for the submission of the 2023 audited financial statements. PwC is also the auditor of the Sanlam Unity Umbrella Fund.
The Board thank PwC for a very professional tender submission as well as their willingness to adapt their plans and 2024 resource allocations to cater for the abovementioned unexpected developments. The Board is confident that the most appropriate appointment has been made in the best interests of these two umbrella funds and all its members.
The Board is also very thankful to RSM who have very ably served as the Funds’ auditor since 2006. RSM served as auditor over 17 annual audits. This included 2 rotations of the lead partner within RSM auditing these umbrella funds, and a full tender exercise during 2017, the result of which was the decision to re-appoint RSM as auditor.
It was certainly difficult to communicate to RSM the Board’s decision to replace them on both umbrella funds. Marius Saayman, our Audit Committee Chairman, reflected as follows:
“I want to use this opportunity to thank you, your partners and team for the professional and excellent service that we received since your appointment in 2006. I appreciate the open communication line that we always had on audit issues, timelines, planning, technical challenges, etc. We respect that you never accepted anything before you could satisfy yourself of the correctness and completeness of the information. I think that you sometimes gave the accounting team a hard time, but that gave me peace of mind regarding the quality of the audit.”
Though I never served on the Funds’ Audit Committee, I too would like to express my sincere appreciation to RSM for their professional work on these two umbrella funds over many years, the quality of which always impressed me.
David Gluckman
Chairman of the Board
Sanlam Umbrella Pension Fund & Sanlam Umbrella Provident Fund