Icasa, SABC receive qualified audits again

CAPE TOWN — The Independent Communications Authority of SA (Icasa) and the SABC have received qualified audits for the second year in a row, it emerged yesterday.

Last year, auditor-general Terence Nombembe criticised the SABC, which has been struggling with management and governance issues, for poor internal controls and compliance with the Public Finance Management Act. He had also raised concerns over Icasa’s wasteful expenditure and noncompliance with the Public Finance Management Act and Treasury rules.

However, the SABC says it has managed to meet most of its turnaround targets. The SABC borrowed R1.47bn — on a government guaranteed loan — in 2009, and CEO Lulama Makhobo said in its report, tabled in Parliament this week, that by the end of the 2011-12 financial year, it had accelerated the repayment of the loan and “significantly” reduced the interest payments.

She also said its net profit had exceeded the government guarantee target, achieving R343m against a goal of R222m.

Both the SABC and Icasa are key entities falling under the Department of Communications, which was yesterday revealed to have accumulated more than R115m in irregular expenditure in the current year.

According to the department’s annual report, tabled in Parliament this week, the auditor-general gave it an unqualified audit opinion. However, he found it materially underspent the budget vote by R211m.

“As a consequence, the department has not achieved its objectives of developing ICT (information and communications technology) policies and legislation that stimulate and improve the sustainable economic development of all South Africans,” Mr Nombembe said.

He found that Icasa, which also tabled its annual report this week, had not implemented proper record keeping in a timely manner to ensure that complete, relevant and accurate information was accessible and available to support financial performance reporting.

Mr Nombembe also found that the regulator did not implement controls over daily and monthly processing and reconciling of transactions. A more damning finding was that management did not adequately review and monitor compliance with applicable laws and regulations.

The SABC, which has time and again approached Parliament for funding, said in its annual report that independent auditors were unable to verify the amounts spent on film and sports rights, with a carrying amount of R862,467m and related accruals of R598,799m included in trade and other payables.

Independent auditors also established that “numerous” employees at the broadcaster were found to have interests in companies that could not be supported by signed declaration of interest forms. It was also found that the broadcaster did not maintain a centralised register to track and monitor whether employees had declared their interests.