Disclaimer of opinion after audit reveals the state of Prasa’s finances
THE finances of the Passenger Rail Agency of South Africa (Prasa) are in disarray, so much so that Auditor-General Kimi Makwetu has found it difficult to deliver his recommendation on the state of affairs at the state-owned entity.
Instead, the beleaguered Prasa obtained a disclaimer of opinion after two years of clinching a qualified audit.
“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, 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 Makwetu on September 25.
He said the report reached his office only 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 had contained errors.
Makwetu found that Prasa did not have adequate systems for identifying and discussing all irregular expenditure, as well as fruitless and wasteful expenditure.
In its report, Prasa said total revenue was R13.7 billion compared with R15.5bn in expenses.
Both commuter and long-distance passenger rail and bus services failed to meet the revenue target of R2.9bn, with total fare revenue collected at R1.5bn.
Board chairperson Khanyisile Kweyama said although the board ensured that management implemented strict cost-containment measures over the years, Prasa’s financial position had not improved.
He said the board and management had embarked on a process of revising the turnaround strategy to improve business performance.
Group chief executive Nkosinathi Sishi said Prasa was committed to reversing the audit outcomes and restoring good governance.