Cosatu’s resources ‘adequate’ despite debt

Picture: Nadine Hutton

Picture: Nadine Hutton

Published Nov 26, 2015

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Johannesburg - Despite Cosatu’s affiliates owing the federation millions of rand, it said in its finance report that it believes it has enough resources to weather this financial storm.

In a financial document prepared for the Cosatu congress in Midrand, which ends today, it said its 18 affiliates owe R9.6 million. This had made the payment of debt more difficult, but Cosatu said it had introduced initiatives aimed at reducing expenses.

Cosatu said in a Deloitte auditor’s report of its finances: “The federation has reviewed the cash flow forecast for 12 months to July 2016 and, in light of this review and the current financial position, the federation is satisfied that it has adequate resources to continue in operational existence for the foreseeable future.”

In a summary introduction to the report, which Independent Media has seen, Cosatu was candid about what position it has been placed in by its affiliates.

“(In) this period, (the) federation had to operate under immense financial difficulties… which is contributed by lack of affiliate commitments to settle their monthly dues to the federation,” the summary read.

Deloitte has audited Cosatu’s finances since its last congress in 2012.

One of the biggest expenses for Cosatu was its increasing legal fees. It spent more than R5.4m last year, up from more than R4.3m in 2013. This figure will probably drop in the coming year because former Cosatu general secretary Zwelinzima Vavi and the National Union of Metalworkers of SA (Numsa) have given up their fight to be reinstated to the federation. A number of battles were fought in court over the matter.

The federation lost a lot of money in affiliation fees by showing Numsa the door. Last year, the union contributed more than R3.2m to Cosatu’s coffers.

On it receiving a qualified audit, Cosatu said it had been the same situation in previous years. “This was based on the departure from the International Financial Reporting Standards and the impracticality of the auditors to verify donation income and affiliation fees received beyond the receipts actually recorded and information in terms of membership numbers supplied by affiliates,” the summary read.

Often unions do not inform federations of their true numbers in order to pay less in affiliation fees. If Cosatu’s affiliates are as serious as they claim to ramp up support for the SA Communist Party, it is clear that unions will have to be more conscientious in their payment of affiliation fees.

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