Eskom a threat to SA's finances, AG says - TechCentral

Eskom a threat to SA’s finances, AG says

The finances of Eskom, Transnet and other companies owned by South Africa’s government have deteriorated to such an extent that they now pose a significant risk to the nation’s finances, the auditor-general said.

“State-owned companies are not applying proper accounting controls and the ministries responsible for oversight of these entities” are not doing a proper job, Kimi Makwetu told reporters in Cape Town on Wednesday.

The Trans-Caledon Tunnel Authority, Alexcor and Broadband Infraco were also identified as being in parlous financial states, while there were doubts that the SABC, PetroSA and the South African Post Office could continue operating without government assistance, Makwetu said. He expressed concern that audits still had to be undertaken on South African Airways, SA Express and armaments group Denel.

Key highlights of the auditor-general’s annual report on government departments and state-owned companies:

  • Just 23% of national government departments obtained clean audits in the year to March, down from 30% the year before.
  • Unauthorised expenditure rose 38% to R2.1-billion, while fruitless and wasteful expenditure surged more than 200% to R2.5-billion.
  • Government entities incurred R51-billion in irregular expenditure. That excludes R28.4-billion in irregular expenditure by state-owned companies that aren’t audited by the auditor-general. Contracts worth R6.5-billion couldn’t be audited due to missing or incomplete information.
  • National and provincial government departments are facing an increased risk of litigation, with almost a third of them facing claims exceeding 10% of their next year’s budgets. The claims aren’t budgeted for, meaning the successful ones will have to be settled using funds earmarked for other purposes, Makwetu said.  — Reported by Paul Vecchiatto, (c) 2018 Bloomberg LP

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