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Only one SOE achieves clean audit

Nov 17 2016 19:16
Lameez Omarjee

Johannesburg – Of the 10 major public entities audited by the Auditor General South Africa (Agsa), only one received a clean audit opinion.

According to the audit report released on Wednesday, the Armaments Corporation of South Africa (Armscor) is the only state-owned enterprise (SOE) which received a clean audit opinion.

Armscor sustains its “clean audit” status from the previous year. Among the reasons which have contributed to this include financial and operational information that is “reliable”.

Armscor came under the spotlight earlier this year over a cyber breach on its website, by the group Anonymous.

READ: Armscor: No ‘classified’ data leaked in Anonymous hack

In a statement, the group explained that resources are acquired economically. This is important to note as the Auditor General Kimi Makwetu explained that irregular expenditure incurred by SOEs is due to their failure in complying with supply chain management regulations and procurement processes. This means that goods and services are not always obtained at competitive prices.

Irregular expenditure by government departments and entities was over R46bn.

ALSO READ: Irregular govt spend balloons to over R46bn

The remaining public entities had “material findings” on compliance which prevented them from achieving a clean audit opinion.

The Airports Company of South Africa (Acsa), the South African Nuclear Energy Corporation (Necsa) and the South African Post Office (Sapo) were among the SOEs which submitted financial statements late. The cut off for submissions was 12 August 2016.

Acsa, Necsa and the Passenger Rail Agency of South Africa’s (Prasa) all received unqualified opinions with findings. Sapo received a qualified audit opinion.

The AG said that operations and audit outcomes of SOEs were negatively affected by weaknesses in leadership and governance.

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