The Portfolio Committee on Public Enterprises was briefed by the Auditor-General (AG) of South Africa on the Department of Public Enterprises’ audit outcomes for the 2022/23 financial year and also by the department on its annual report and financial statements for 2022/23.
The AG said the overall audit outcomes of the Department of Public Enterprises and its entities remained stagnant, with no notable improvement in outcomes in the current year.
The department and its entities struggled with low performance rates on their mandate and service delivery objectives.
The AG said that the portfolio is failing to implement a robust financial management system that will produce credible financial reports, the AG said. Compliance with laws and regulations remains a challenge for the portfolio.
The key contributors to stagnation in audit outcomes cited by the AG are leadership instability and high vacancy rates in key positions, ineffective audit action turnaround plans and poor record keeping.
The AG also indicated that state-owned entities’ slow recovery will persist unless leadership diagnoses and responds promptly to the weaknesses noted in the Zondo commission report.
In its response, the committee said it welcomed the AG’s presentation and that these findings will assist committee members to hold the department and its entities accountable.
Furthermore, the department and entities are in a dire situation that needs remedy.
The AG presented facts to the committee, but the implications of what was presented rests on entities, their boards and the department.
The AG highlighted significant failures in various areas.
However, members of the committee said that the AG’s report does not provide an understanding of how five SOEs have not managed to submit their financial reports in the year under review.
“This is deeply concerning for the committee. The committee was of the view that state-owned entities are not meeting their legislative obligations. The department used 74% of its budget, and the committee queried if this was influenced by the fact that the department has a high vacancy rate at a management level,” the statement read.
BUSINESS REPORT