South Africa: State-Owned Enterprises ‘The Worst They Have Ever Been’ – Auditor General

Audit outcomes at state-owned entities are ‘the worst they have ever been’. None clinched a clean audit — and all failed to comply with laws and regulations. At Wednesday’s release of the 2018/19 consolidated national and provincial audit report, Auditor-General Kimi Makwetu called for immediate preventative action and accountability.

All 11 state-owned entities (SOEs) that submitted financials to the auditor-general show red for not being in compliance, according to the 2018/19 consolidated national and provincial audit report.

Of the 20 major SOEs, the auditor-general audits 14 — there are plans to get Transnet into the fold in 2020, and others subsequently — but three failed to submit their financials: bailout-dependent SAA, for a second consecutive year, the South African Nuclear Energy Corporation (Necsa) and Trans-Caledon Tunnel Authority.

Eskom is not audited by the auditor general.

At the heart of legislative compliance, contraventions were procurement (mis)management and failure to prevent irregular, fruitless and wasteful expenditure in line with the Public Finance Management Act (PFMA). The financial statements were also nothing much to write home about.

“(O)nly 18% (three out of the 17 SOEs with completed audits) submitted financial statements for auditing without material misstatements. Of the 12 SOEs that submitted financial…

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