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14 SOEs rack up billions in irregular expenditure - Makwetu

Kimi Makwetu said the 14 SOEs notched up R1.4 billion in irregular expenditure but warned this figure could rise as four of them could not make full disclosure on this.

FILE: Auditor-General (AG) Kimi Makwetu. Picture: GCIS

CAPE TOWN - Auditor General (AG) Kimi Makwetu said not one of the 14 big state-owned entities (SOEs) audited by his office received a clean audit, a poorer outcome than last year.

Makwetu was revealing the results of the national and provincial audits for the past financial year at Parliament on Wednesday. He said the financial health of SOEs remained under significant pressure with doubts about whether they could continue operating without further financial help from the government.

Makwetu said the 14 SOEs notched up R1.4 billion in irregular expenditure but warned this figure could rise as four of them – Denel, the SABC, SA Express and the SA Forestry Company could not make full disclosure on this.

Meanwhile, irregular expenditure racked up by Transnet (R49.9 billion) and Eskom (R6.6 billion), who have private auditors, amounted to R57 billion.

“The SA Post Office, for example, has slipped back to a qualified opinion and the Development Bank of SA regressed to a financially unqualified with findings [opinion] in the year under review,” Makwetu said.

The amount of irregular expenditure that South African Airways was responsible for was so far unknown as its financial statements were still outstanding for the year under review and the previous year.

WESTERN CAPE AND FREE STATE

The DA-run Western Cape continues to shine as the province with the best audit results, while the Free State has emerged as the worst.

While the Western Cape received 79% clean audits, the Free State was the only province unable to obtain a single one.

Makwetu praise for the Western Cape, which also accounted for the least irregular as well as fruitless and wasteful expenditure, and had the highest number of auditees in good financial health.

“It continues to produce the best results, comparatively speaking.”

Gauteng came next with 30% clean audits, which Makwetu flagged as concerning, as it comes after years of 100% unqualified audit opinions.

KwaZulu-Natal's results remained unchanged and it racked up the most irregular expenditure of all the provinces and national government – a total of R12.4 billion.

The Eastern Cape regressed slightly as did Mpumalanga, and while Limpopo improved slightly, its irregular expenditure swelled to R2 billion.

Makwetu said North West was showing signs of a turnaround, but the Northern Cape has slipped further, while the Free State didn’t get a single clean audit and needed urgent intervention.