MPs warn SOEs over finances
Representatives of the Office of the Auditor-General appeared before the portfolio committee on public enterprises yesterday, where they expressed deep concern over the ballooning irregular expenditure, which rose from R31billion to R86bn in one year.
They said over the past five years, some SOEs had regressed on their audit outcomes, while others had stagnated.
ANC MP Judith Tshabalala said it was unacceptable that it was “business as usual” with SOEs obtaining bailouts when they failed to table their financial statements.
It emerged that SAA had failed for two consecutive years to table its financial statements, and that it was not the first time this had happened.
Tshabalala painstakingly pointed out that SOEs who failed to table their annual reports should not be granted bailouts.
“As per the Public Finance Management Act, we need to table annual reports. There are three entities that have not tabled theirs for two consecutive years. What is the punitive action? If they can’t account for their finances, how do they get this money?” she asked.
UDM MP Nqabayomzi Kwankwa said parliamentarians needed to discuss the issue of SOEs who kept coming back for bailouts.
He said Auditor-General Kimi Makwetu had to use his new powers to clamp down on irregular expenditure in SOEs.
Senior official in the AG’s office Zolisa Zwakala said the late submission of financial statements was of immense of concern.
She said Public Enterprises Minister Pravin Gordhan had written to Speaker Thandi Modise to explain the delay in the submission of financial statements of some of the SOEs, and that some of the SOEs had presented turnaround plans. “But those turnaround plans do not gain traction; you find a new chief executive who puts plans in place and within the blink of an eye he’s gone,” said Zwakala.
SAA chief executive Vuyani Jarana quit in June, and he was followed by Phakamani Hadebe at Eskom. Mark Barnes recently resigned as chief executive of the South African Post Office.
Zwakala said the portfolio committee had to keep performing its oversight role on these entities.
Finance Minister Tito Mboweni had warned that SOEs posed a major risk to the economy. Eskom has a debt of R450bn, and if it defaulted on its loans it could cause a cross-default on all SOE loans.
The National Treasury has thrown in over R570bn in bailouts to the entities over the past few years.
Zwakala told the committee that the situation was dire at Eskom.
“Eskom’s current liabilities exceed its current assets, but there has been no action against officials implicated in wrongdoing in the SOEs,” he said.