SABC’s irregular spending up to R5.2bn
THE SABC incurred R336 million in irregular expenditure in 2018-19, bringing the amount to R5.2 billion.
This is according to the public broadcaster’s annual report tabled in Parliament.
Auditor-General Kimi Makwetu said the SABC did not include particulars of all irregular expenditure in its financial statements, as required by the Public Finance Management Act.
“I was unable to determine whether any further adjustments were necessary to the irregular expenditure disclosure stated at R5 220 726 000,” Makwetu said.
However, the SABC said it had performed an investigation on expenditure incurred since 2012-13.
“This extensive exercise was aimed at identifying or detecting an accurate and complete list of irregular expenditure for the current and previous financial years,” said the public broadcaster.
But Makwetu said effective and appropriate steps were not taken to prevent the irregular expenditure, resulting in it not being quantified.
“Most of the irregular expenditure disclosed in the financial statements was caused by a competitive bidding process not having been followed.”
Makwetu also said there were no effective steps taken to prevent fruitless and wasteful expenditure amounting to about R50m.
“The fruitless and wasteful expenditure was caused by programme, film and sports rights acquired and not utilised by the entity.
“The entity did not implement adequate consequence management processes for transgressions against applicable policies, laws and regulations,” Makwetu said.
He also said he was unable to obtain sufficient audit evidence for capital work in progress for the current and previous years. “I was unable to determine whether any adjustments were necessary to capital work in progress stated at R263608000.”
The AG said the SABC was a defendant in a number of lawsuits.
“The ultimate outcome of these matters cannot be determined currently. These have been disclosed as contingent liabilities.”
Board chairperson Bongumusa Makhathini said the SABC had had a turbulent recent past and had been mortally damaged by unlawful and irregular practices of a succession of boards and management. Makhathini also said the board continued to support implementation of measures to stabilise the SABC at governance level and also stepped up actions to address endemic corruption and maladministration.
He noted that the final position of the SABC remained under severe pressure, and struggled financially.
“The SABC’s dire financial situation worsened further during the 2018-19 fiscal year and the corporation ended March 2019 with a cash balance of only R72m. Its cash flow is depleted and consequently the SABC cannot honour payments to service providers, adhere to its committed contracts and commission local content productions,” Makhathini said.
He also said the SABC ended the financial year with a loss of R482m. The losses have decreased from R1 billion in 2016-17 to R744m in 2017-18.
Chief executive Madoda Mxakwe said that because of the dire financial situation, the SABC had applied for government funding.
“Immense effort went into ensuring that the funding application meets all the necessary criteria and an outcome of the same is expected soon.
“I want to assure South Africans that the SABC is undergoing a radical process of rehabilitation and renewal.”
He also said the SABC had made tremendous progress with clearing external audit findings. “More than 80% of the audit recommendations were implemented,” Mxakwe said.