In a stark indication of the state of financial health of South African parastatals, the office of the Auditor-General (AG) told a joint sitting of in Parliament that the Development Bank of Southern Africa (DBSA) was the only state-owned entity (SOE) to achieve a clean audit in the 2020/21 period.
This was revealed during a briefing to Parliament's Standing Committee on Public Accounts (Scopa) and the Standing Committee on the Auditor General on Wednesday.
None of the 15 major SOEs audited, however, had adverse audit opinions with findings, and only one had a disclaimer audit opinion with findings - the worst finding an auditee can receive.
Four SOEs got an unqualified audit opinion with findings, with means that the AG was satisfied with most of the audit, while two got a qualified audit with findings, meaning their financial statements contain material misstatement in specific amounts, or that there was insufficient evidence that conclude that specific amounts were not misstated. Seven SOEs had audits outstanding.
Between Eskom's debt of more than R400 billion, Denel's struggles with paying salaries on time, South African Airways' (SAA) business rescue process, and unrelenting infrastructure damage and cyberattacks on Transnet, it is clear that the financial struggles of SOEs are far from over.
Among the 247 other public entities not characterised as SOEs, only 26%, or 65, got clean audits, while 103 got unqualified audits with findings and 11 got disclaimer audit opinions.
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The office of the AG told the joint meeting that financial statements were left outstanding from 17 public entities, which include SAA Group, SA Express and Denel Group.
The office of the AG told MPs that delays from the South African Post Office, the Land Bank and the State Information Technology Agency held up their audits.
The Compensation Fund, the Independent Development Trust, the Petroleum Oil and Gas Corporation, the Unemployment Insurance Fund, and the Passenger Rail Agency of South Africa submitted their financial statements too late for a timely audit.
During his first medium-term budget policy statement, Finance Minister Enoch Godongwana indicated that SOEs would be given "tough love" until their finances improved, indicating no allocations to SOEs in the medium term aside from R2 billion to Denel for government-guaranteed debt.
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