Cape Town - Something is “rotten” in State-owned enterprises as Denel and Alexkor continue to miss deadlines for the auditing of their financial statements by months.
This is what Standing Committee on Public Accounts (Scopa) chairperson, IFP MP Mkhuleko Hlengwa, told MPs and the Auditor-General of SA (AGSA) Tsakani Maluleke’s office on Tuesday.
Hlengwa came to this deduction as Maluleke’s office delivered a presentation on the state of financial affairs of Alexkor and Denel.
AGSA acting business executive for public enterprises, Madidimalo Singo, said they initially opted to skip an Alexkor audit and appoint Ngubane Incorporated for the job, but the AG had since taken over the audit. Alexkor delayed submitting their annual statements. As a result their 2021/’22 audit hadn’t been concluded.
AG officials yesterday told MPs that Denel had submitted already outstanding financial statements 18 months later.
AGSA deputy business executive for public enterprises, Fhumulani Rabonda, presented a report that showed Denel’s 2020/’21 and 2021/’22 audits were still outstanding, as they had not submitted the pertinent annual statements in time.
Rabonda said Denel’s 2022/’23 financial statements could be added to the audit process by May, with the audit outcome for all the years from 2020 expected to be issued by July.
The Cape Times reported late last year that Eskom had missed its 2021/’22 annual reports submission to Parliament and joined Denel and Alexkor, which had failed to submit their annual reports for the second year in a row in 2022.
The submissions deadline to Parliament is September 30.
Hlengwa said: “Auditing must not be at the pleasure and comfort of the auditee... If that’s the case, it must be about them not cooperating.
“In Hamlet, there is a very apt line (that says): ‘something is rotten in the state of Denmark’, and I think here I can say that something is rotten in the State-owned enterprises.”
He called for tighter regulations on the delays of submitting financial reports, and warned the AG’s office not to fall into the trap of “this (late submissions) being normalised”.
An AG official said: “As AGSA, we’re equally concerned because the delay in the submission of financial statements (also) impacts very heavily on accountability and oversight.”
Denel received a R3.4bn bailout in last year’s mini-budget so that the struggling company pays off its debt.