Auditor-General Kimi Makwetu. Picture: GCIS

Johannesburg - The finances of the Passenger Rail Agency of South Africa (Prasa) are in such disarray that Auditor-General Kimi Makwetu has found it hard to deliver his recommendation on the state of affairs at the state-owned entity.

Instead, Prasa obtained a disclaimer of opinion following two years of clinching qualified audits.

“I was unable to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these consolidated and financial statements,” Makwetu said in his audit report tabled for the 2018-19 financial year.

The report was recently submitted to Parliament along with Prasa’s annual report, after the entity failed to meet its August deadline.

In a letter to National Assembly Speaker Thandi Modise, Transport Minister Fikile Mbalula said the delay in tabling the Prasa report was due to the annual financial statements and performance report concluded by Auditor-General Kimi Makwetu on September 25.

He said the report only reached his office at the end of last month.

In his report, Makwetu said he could not obtain supporting documents on various matters and that the financial statements contained errors.

This included lack of evidence that the rail agency’s management had properly accounted for property, plant and equipment due to inadequate accounting records.

“I was unable to determine whether any adjustments were necessary to property, plant and equipment stated at R42.5 billion,” Makwetu reported.

He also said he did not obtain audit evidence that Prasa had accounted for unspent conditional grants and capital subsidies, which prompted him to not determine the adjustment to the tune of R44.8bn.

Makwetu also could not find audit evidence for fare revenue and confirm that revenue by any alternative means.

“I was unable to determine whether any adjustment was necessary to fare revenue, stated at R1.3bn and R1.8bn for the controlling entity and economic entity respectively.”

It was the same with adjustments made on commitments totalling R20.4bn.

Makwetu instead found that Prasa did not have adequate systems for identifying irregular expenditure, and fruitless and wasteful expenditure.

Board chairperson Khanyisile Kweyama said while the board ensured the management implemented strict cost-containment measures over the years, Prasa’s financial position had not improved.

Group chief executive Nkosinathi Sishi said they were committed to reversing the audit outcomes and restoring good governance.

Political Bureau