SOEs rack up R2.8bn in irregular spending
THE auditor-general has painted a worrying picture of the finances of the SABC and the South African Post Office (Sapo)‚ saying both state entities are at risk of collapse.
The AG said it was worried about the fate of many state-owned entities.
“For just over a quarter of them‚ there was significant doubt on whether they could continue their operations in future – these included the SABC‚ the Sapo group‚ and the Petroleum Oil and Gas Corporation (PetroSA)‚” the latest AG report said.
“We are also concerned about the losses incurred and other concerning financial indicators at the Armaments Corporation of South Africa (Armscor)‚ the South African Nuclear Energy Corporation (Necsa)‚ and the Land and Agricultural Development Bank of South Africa (Land Bank) group.”
Of those cited above‚ the SABC and Post Office have probably grabbed the most headlines in recent months.
The SABC came under intense scrutiny during the controversial tenure of for- mer chief operating officer Hlaudi Motsoeneng.
The Post Office has gained renewed attention as it bids to take over the distribution of social grants.
In its latest report on state finances‚ the AG revealed that Sapo spent R194-million in fruitless and wasteful expenditure‚ making it the worst offender in that category in 2016-17. That compares to R7million in 2015-16.
Sapo was also a major transgressor when it came to irregular spending‚ alongside the SABC and Airports Company South Africa (Acsa).
The total bill for irregular expenditure came to R2.8-billion among SOEs. The main contributors were: Acsa – R1.169-billion (2015-16: R134-million) – 60% as a result of non-compliance with legislation. Sapo – R719-million (2015-16: R127-million) – 45% due to non-compliance with procurement process requirements and 37% not following competitive bidding or quotation processes. SABC – R687-million (2015-16: R764-million) – 75% as a result of not following competitive bidding or quotation processes.
“The number of SOEs with irregular expenditure decreased slightly but the value increased significantly to R2 884-million‚ of which [Acsa, Sapo and SABC] were the main contributors‚” the AG said.
“The reason for this was the increased weakening of supply chain management at SOEs.
“We found officials were not familiar with the policies and procurement processes they should follow‚ and in some cases circumvented [these].
“Of most concern and impact is that the financial health of SOEs regressed.” – TimesLIVE