AG Maluleke paints grim picture of the state of key SOEs

Parliament's standing committee on public accounts (Scopa) was briefed on the latest audit outcomes for the Development Bank of Southern Africa, Denel, Prasa, Eskom, Transnet and the SABC during a marathon session on Wednesday.

FILE: Auditor-General Tsakani Maluleke on 9 December 2020 delivered the second COVID-19 relief fund audit report in Pretoria. Picture: @SAgovnews/Twitter.

CAE TOWN - The Office of the Auditor-General and private auditors have painted a grim picture of the dire straits that key state-owned companies continue to be in.

Parliament's Standing Committee on Public Accounts (Scopa) was briefed on the latest audit outcomes for the Development Bank of Southern Africa, Denel, Prasa, Eskom, Transnet and the SABC during a marathon session on Wednesday.

SAA, which is in business rescue, was not included.

New Auditor-General Tsakani Maluleke said this was because the 2018/2019 audit couldn't be completed due to a lack of financial statements and their team was withdrawn.

The Development Bank of Southern Africa was the only entity given a clean audit for the 2019/20 financial year.

State arms maker Denel and Prasa were given disclaimers, meaning the auditors distanced themselves from providing any opinion on their financial statements.

Eskom, Transnet and the SABC all received qualified opinions, not for the first time.

The auditors raised questions about the viability of the SABC, Denel and Eskom as concerns.

Eskom’s reported a R21 billion loss for 2020 and its irregular expenditure of R33 billion has been deemed “incomplete”, which means it could be higher. It also has to repay R350 billion in the next five years – suggesting it may need another bailout.

Transnet reported irregular expenditure of R56.2 billion and this too is deemed to be incomplete.

While the SABC’s audit outcome improved, it’s still incurred around R5 billion in irregular expenditure and continues to rack up losses, which may continue for the next three years if its turnaround plan isn’t implemented. This could deplete its bailout of more than R3 billion.

Maluleke said the boards and management of all the SOEs had been informed of the audit outcomes.

“We’ve done things in the way that we’re used to in terms of making sure that those that are responsible for running these entities are fully briefed on the contents of the audit report and the outcomes of our work on the year-end audit.”

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