Auditors have picked irregularities in Eskom’s books. Picture: Henk Kruger/African News Agency (ANA)
Auditors have picked irregularities in Eskom’s books. Picture: Henk Kruger/African News Agency (ANA)

Auditors pick up breach of fiduciary duties by Eskom board

By Mayibongwe Maqhina Time of article published Nov 10, 2021

Share this article:

Cape Town – Parliamentarians heard that auditors have identified three reportable irregularities that were found to be in breach of the fiduciary duties by the Eskom board when the entity’s 2020/21 finances were audited.

Briefing the Standing Committee on Public Accounts (Scopa), auditor Siyakhula Vilakazi said they have since reported the matters to the Independent Regulatory Board for Auditors.

Audit firm Sizwe Ntsaluba Gobodo-Grant Thornton performed the audit on behalf of the office of Auditor-General Tsakani Maluleke.

Vilakazi said steps taken by Eskom together with the status of each irregularity were disclosed in the consolidated and separate financial statements of the entity.

In his report to Scopa, he said a contract was awarded to Econ Oil & Energy in 2019 at the recommendation of the former chief procurement officer after irregularities in a previous contract with the supplier were discovered.

Vilakazi said the board failed in their fiduciary duty to ensure Eskom did business with a reputable supplier.

He also said the board has since cancelled the contract after an investigation was finalised last December and presented to it in March this year.

“This matter ended in court and the court decided in favour of Eskom that there was no contract. I am not sure if any party appealed.”

Vilakazi said there was also a fixed contractor’s contract that was extended for more than two terms in contravention of the entity’s recruitment procedures that provided for two.

The official was no longer at Eskom and the contract ended.

“There wasn’t a disciplinary process against anyone as far as this matter was concerned. There was an investigation and that investigation concluded that there was no irregularity,” he said.

Vilakazi also said Eskom was busy with implementing action to comply with its failure to comply with the National Environment Act.

However, he noted that due to the instances of irregular expenditure that were not disclosed, there was a high probability there were other transactions that met irregularities which they could not identify.

“The underlying irregular expenditure register used to disclose irregular expenditure as part of the annual financial statement, per the requirement of the Public Finance Management Act section 55 (2) (b) (i) was not complete and accurate.”

He also said they found there were insufficient steps taken to ensure there were effective and adequate internal controls in place.

“What is most important for me is an action plan to address audit issues that are well outlined in the management report.”

[email protected]

Political Bureau

Share this article: