CAPE TOWN - South African Airways (SAA) will still need to account for the public funds it was allocated when it underwent business rescue, and 51% of its shareholding was disposed of.
This was according to the Office of Auditor General South Africa (Agsa) when the ANC’s Bheki Hadebe asked in the meeting of standing committee of public accounts (Scopa) what the implications were to their mandate in how the committee dealt with the entity going forward.
The Department of Public Enterprises entered into an agreement to dispose of 51% of SAA shares to Takatso Consortium.
Hadebe asked what outstanding matters Scopa could still pursue at SAA, since it would not be treated like a public entity under the Public Finance Management Act (PFMA).
In his response, Agsa’s Fhumulani Rabonda said, for the period SAA was a state entity, it would still need to be accountable and be audited for the financial years up to the date there would be legal transfer of its control.
“There must be financial statements that are of public institutions and they must be audited appropriately, and Parliament still needs to oversee,” Fhumulani said.
However, he said even post-the transfer period, there would still be government investment, which would still need oversight.
“It will happen in the context of an arrangements that are to between government through Department of Public Enterprises and other shareholders,” Fhumulani said, adding that details would have to be worked out how to oversee the state assets in SAA with a new shareholding structure, until the transaction was finalised.
There are still three audit reports that are outstanding and the figure may be four if financial statements are not submitted to the auditor-general in April.
This emerged when Agsa was briefing Scopa about SAA’s financial statements and audit report for the 2017-18.
Agsa’s business unit manager Zolisa Zwakala told the MPs that the entity went through much over the past three years.
Zwakala said, in 2019, the SAA financial difficulties resulted in the then board requesting suspension of the audit, as they wanted to focus on finding solutions to address liquidity and solvency challenges.
“At the time of withdrawing the audit team, the audit for 2017-18 was incomplete as we were waiting for the final board approved financial statements,” said Zwakala.
The board had adopted a resolution to place SAA under business rescue in December 2019, and the airline exited business rescue in April 2021.
The audit for 2017-18 was finalised in February 2022 and SAA obtained a qualified audit opinion, with Mango Airline obtaining a disclaimer.
Zwakala said they were engaging SAA and other stakeholders to start the remaining audits for the financial years 2018-19, 2019- 20, 2020-21 and 2021-22.
“We’ve got three years outstanding in terms of financial statements SAA owes us as auditors,” she said, adding there would be a fourth if 2022 was added.
“We are to audit and table the audit report, and escalate it to the portfolio committee and Scopa as usual,” Zwakala added.
Cape Times