The SABC was dealt a blow on Tuesday when it received a disclaimer of opinion for the 2012/2013 financial year, the worst audit opinion, from the auditor-general.
A disclaimer is issued if the AG cannot form an opinion and thus declines to present an opinion on an entity’s financial statements.
In the SABC’s 2013 annual report, tabled in parliament on Tuesday, AG Terence Nombembe cites financial mismanagement and inadequate controls as reasons for the disclaimer.
Nombembe’s findings in his audit report include the SABC spending over R1,5bn, and not being able to provide corresponding documentation on what the money was used for.
“I was unable to obtain sufficient, appropriate audit evidence for journals processed to broadcasting cost, signal distribution, and linking cost, marketing cost, professional and consultancy fees and other expenditure, which in total amount to R1,6bn, as supporting documentation could not be provided,” Nombembe said.
In addition, the SABC also failed to adhere to the laws governing taxpayers’ money.
“Irregular expenditure to the amount of R106,3m was incurred, as proper tender processes had not been followed.”
It also emerged that the broadcaster had procured goods and services through unfair and untransparent means.
In a statement, communications minister Yunus Carrim says his department will “exercise far more strategic oversight over the SABC. A turnaround will not happen overnight. But if all the relevant parties cooperate there will certainly be improvements over time.”
Carrim says government raised its concerns over the SABC’s financial performance at the recent annual general meeting and has instituted a joint task team made up of representatives of the department of communications, national treasury, the AG’s office and the SABC to consider the long-term financial sustainability of the public broadcaster, to review the shareholder compact, to fill vacant posts and to assist with progress on digital migration.
But the Democratic Alliance has urged Carrim to take more action. Shadow communications minister Marian Shinn says in a statement that Carrim must investigate the legality of the letter, from previous board chair Ben Ngubane, appointing acting chief operating officer Hlaudi Motsoeneng with a view to removing him from this post.
“Under Motsoeneng’s tenure the management, staffing, financial and editorial crises have escalated rather than improved,” Shinn says.
According to Shinn, SABC CEO Lulama Mokhobo confirmed that the SABC missed its performance targets set out in the government guarantee.
“The AG also found that the financial statements submitted did not adhere to reporting standards, the Public Finance Management Act or the Companies Act,” Shinn says. “The SABC also did not effectively review their internal audit function, experienced leadership instability and the accounting authority did not exercise its oversight responsibility effectively.” — Sapa and TechCentral