Does SABC need 12 directors?
SHOCKER: IRREGULAR EXPENDITURE REACHES R5.2BN
Broadcaster struggling to pay employees; should consider cutting down the number of executives.
The SABC is sliding down a bottomless pit, with no end in sight. The 2019 annual report indicates that the national broadcaster has not escaped maladministration and internal corruption, and is faced with ongoing funding challenges.
An amount of R3.2 billion, payable from the government contingency reserve, has been allocated to the SABC. It will be paid over by National Treasury in tranches. This lifesaver enabled the annual report to be published, and saved the SABC from trading as an insolvent entity. But it won’t be enough.
Its non-executive directors, executive directors, and senior management don’t come cheap.
Group executive of commercial enterprises Tshifhiwa Mulaudzi, suspended in April, earned a commission of R421 000.
The SABC board comprises 12 non-executive directors and three executive directors. Many of the non-executive directors sit on various boards, convocations, councils, trusts, and so on.
The SABC, which runs out of cash to pay salaries to workers, must consider cutting down on the number of directors and executives it has.
The Auditor-General issued a qualified report with findings, including:
The group incurred a loss of R482 million for 2019 (2018: R744 million).
The fixed assets register is neither accurate nor complete (same finding in 2018).
A fair, equitable and transparent procurement process was not followed.
Fruitless and wasteful expenditure for the year amounted to approximately R50 million. Various programme, sport and film rights were acquired and not used. Disciplinary action has not been taken against those responsible.
The entity has not recognised licence fees to the amount of R2.2 billion (2018: R2.4 billion).
A material impairment of R96.8 million was incurred as a result of irrecoverable and long outstanding trade and other receivables; R69.2 million relates to TV licence debtors.
There were various internal control deficiencies.
A deferred tax asset of R582.8 million has not been raised as the entity is unlikely to generate any taxable income.
The total liabilities exceed the total assets by R594.4 million (2018: R174.1 million), and the current liabilities exceed the current assets by R875.1 million (2018: R456 million).
The total cost of employment (all staff), excluding long service awards, defined benefit pension payments, leave pay and post-retirement medical benefits, comes to R2.4
billion.
The SABC should be moved to Treasury
Treasury carried out a review in August, and laid down set conditions that the SABC has to comply with to receive part of the R3.2 billion amount that has been allocated.
Various strategies have been proposed. This includes the appointment of a chief restructuring officer, which will no doubt come at a huge cost.
Regular cash flow forecasts are matched against requirements; Consequence management; and A turnaround strategy to be completed in September. As Treasury is in control of the purse strings, the SABC should be moved from the department of communications to Treasury.