Cape Town - Auditor-general Tsakani Maluleke has cast doubt over the SABC’s ability to continue operating in the foreseeable future, after it posted a R201 million loss in the financial year ending in March.
In her 2021/22 annual report, Maluleke said the loss indicated that a material uncertainty existed, which may cast significant doubt on the SABC’s ability to continue.
She said the public broadcaster recognised TV licence fees of R815m of the total licence fees billed of R4.446m.
“The public entity has not recognised TV licence fees to the amount of R3.631m.
In management’s judgement, it is not probable that the economic benefits associated with these transactions will flow to the public entity to meet the recognition criteria,” she said.
Maluleke said the SABC was a defendant in a number of lawsuits.
“The ultimate outcome of these matters could not be determined currently, and no provision for any liability that may result was provided for in the financial statements,” Maluleke said.
But the public broadcaster was adamant that it would still break even in the 2022/23 financial year.
SABC CEO Madoda Mxakwe said the financial performance, although not what they aimed to achieve, remained commendable and encouraging.
“Despite lower advertising revenues, overall revenues ended the year 2% higher than those from 2020/21, buoyed by significantly better than budgeted sponsorship revenue,” Mxakwe said.
He said expenditure was prudently managed to result in a 62% reduction in the R530m loss incurred in the last financial year.
The SABC said it would be able to meet its financial obligations for at least the next 12 months.
The SABC Board said there were material uncertainties that cast doubt on the corporation’s ability to operate as a going concern, but that it has sufficient resources to continue with all operating activities for the foreseeable future.
“Based on this assessment, the directors consider it appropriate to adopt the going concern assumption for the preparation of the annual financial statements.”
During the audit, Maluleke was unable to obtain sufficient audit evidence that the irregular expenditure for the previous years was completely accounted for.
“Consequently, I was unable to determine whether any adjustment was necessary to the irregular expenditure disclosure stated at R2.8 billion,” she said.
She was also unable to obtain sufficient audit evidence that disciplinary steps were taken against some of the officials who had incurred and/or permitted irregular expenditure in prior years.
Maluleke said effective and appropriate steps were not taken to prevent wasteful expenditure amounting to R10m.
“The majority of the fruitless and wasteful expenditure was caused by television content acquired but not broadcast before licence expiry date.”
The SABC entered into a five year lease agreement for rental of office space, a portion of which was incomplete and not ready for occupation.
It paid the full rental amount, however, including for the unoccupied space.
“The total amount paid for the unoccupied space amounted to R12m, from November 2016 to October 2021,” she said.
The SABC intended to recover all the money paid and was awaiting the outcome of legal proceedings before taking further action.
“I will follow up on the implementation of the planned actions during my next audit,” Maluleke said.
Cape Times