The Auditor-General has made damning findings against SAA over its financial position after the company incurred a loss of R6.4 billion in 2019.
This is an increase from the loss R5.4bn during the 2018 financial year.
Public Enterprises Minister Pravin Gordhan tabled the audited financial statements of SAA for the period spanning from 2018 to 2022.
This comes after the AG told the standing committee on the auditor-general last week that SAA and other State-Owned Entities and departments have not submitted their financial statements for auditing for several years.
SAA had not submitted its audited financial statements in Parliament since 2018.
The annual report with audited financial statements tabled by Gordhan on Thursday showed that the airline was already in trouble during the 2018/19 financial year.
Auditor-General Tsakani Maluleke has explained how she has been unable to confirm some of the issues in the report because of a lack of documents.
In the report, SAA said it was given a bailout of R5bn by National Treasury in 2019.
It said group revenue also declined by R2.4bn.
In her report, Maluleke gave SAA a disclaimed audit opinion because she could not get sufficient evidence to support her audit opinion.
She said she was unable to obtain evidence for freight and mail revenue.
“I was unable to obtain sufficient appropriate audit evidence for other income due to the status of record keeping. I was unable to confirm other income by alternative means. Consequently, I was unable to determine whether any further adjustments were necessary to the other income stated at R984 million and R1,180 million in note 7 to the consolidated and separate financial statements, respectively.
“I was unable to obtain sufficient appropriate audit evidence for aircraft lease costs due to the status of record keeping. I was unable to confirm the aircraft lease costs by alternative means. Consequently, I was unable to determine whether any adjustment was necessary to the aircraft lease costs stated at R3,218 million and R2,841 million in note 8 to the consolidated and separate financial statements, respectively,” said Maluleke.
The Auditor-General also said she could not obtain sufficient evidence for maintenance costs, electronic data costs, navigation, landing and parking fees because of poor recording keeping.
She also did not obtain evidence on property, aircraft and equipment because of the status of record keeping.
She added that SAA was put under business rescue in December 2019 and government wanted to sell 51% of its stake.
“During and after the business rescue, there were no measures implemented to preserve skills and capacity in the finance function. This affected the credibility of the financial statements prepared as the experienced personnel with knowledge of the entities’ financial records left the company during the business rescue process. This was highlighted by the lack of ownership and accountability for accurate and complete financial records and financial reporting at a component level, and further indicates a lack of financial oversight, monitoring, and review of component financial information,” said the Auditor-General.
She said the airline did not keep records to ensure they were available when needed to verify information.
In addition, the department and management did not ensure there were controls in the airline to prevent the issue of non-compliance.
The Special Investigating Unit was ordered to probe a number of issues at SAA.
“These investigations are still ongoing, while some identified possible criminal activities have already been referred to the Hawks for criminal investigations,” said Maluleke.
The SIU has been probing a number of departments and entities for irregularities after President Cyril Ramaphosa signed the proclamation for the unit to go ahead and probe those matters.
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