Makwetu sticks to his guns on SARS bonuses

Auditor-General Kimi Makwetu says his office expects to sign off the audit report on the South African Revenue Service by Friday as the two bodies try to resolve a dispute about the tax authority’s financial statements.

He remained adamant, however, that the payment of R3m in bonuses to executives at the tax authority represented a governance breach.

Makwetu revealed this on Wednesday in Pretoria, where his office presented the consolidated general report on national and provincial government audit outcomes for the 2016-17 financial year. SARS and the auditor-general have been at odds about the payment of R3m in bonuses to executives at the tax authority.

Commissioner Tom Moyane has threatened to take the issue to court, with Makwetu intent on classifying the R3m as irregular expenditure, which would earn the receiver of revenue its first qualified audit in recent years.

As the dispute brews in the background, the tax authority has welcomed back secondin-command Jonas Makwakwa, who was suspended for a year after the Financial Intelligence Centre flagged him.

The disagreement with the auditor-general has resulted in SARS not tabling its 2016-17 annual report in Parliament.

SARS joins a growing list of entities and departments that have either contested the auditor-general’s assessment of their annual financial statements or have not submitted their financials. These include South African Airways and the Passenger Rail Agency of SA.

Irregular expenditure at beleaguered state-owned enterprises nearly tripled in the past four years, with the number of entities getting qualified audit opinions with findings rising faster than the number of entities with clean audits.

THERE IS A GOVERNANCE STEP IN TERMS OF PAYMENT OF INCENTIVES AND IT WAS OVERLOOKED

Makwetu said that “within the SARS environment, they reward[ed] employees and it was an issue to say who approves”..

“When there is a breakdown, it is likely to come from previous years and entrenches itself.

“There is a governance step in terms of the payment of incentives and [it] was overlooked,” he said.

SARS spokesman Sandile Memela said on Wednesday that the receiver of revenue was in discussion with the office of the auditor-general to resolve the disagreement over the bonuses.

“SARS wishes to confirm that it is engaged with the auditorgeneral’s legal representatives as part of efforts to resolve the matter,” said Memela.