The SABC plans to exercise fiscal prudence when its government-guaranteed loan is paid off at the end of September, chief executive Lulama Makhoba has announced.
“The SABC … has made R330 million in profits after taxes, and we will be paying off the government-guaranteed loan at the end of September,” she said today.
Makhoba said the partial financial freedom would not translate into careless spending, but would be invested in turnaround strategies, including the training of staff in its financial department.
She said an audit had found that financial instability within the SABC had resulted in skilled financial department employees vacating crucial posts.
The SABC was releasing its 2012/13 annual financial report, just two days after receiving a disclaimer of opinion for 2012/13 – the worst audit opinion – from Auditor-General (AG) Terence Nombembe.
A disclaimer is issued if the AG cannot form an opinion and thus declines to present an opinion on an entity’s financial statements.
In the SABC’s 2013 annual report, tabled in Parliament on Tuesday, Nombembe cited financial mismanagement and inadequate controls as reasons for the disclaimer.
In his audit report, he found, among other things, that the SABC had spent more than R1.5 billion, and was not able to provide corresponding documentation for what the money was spent on.
“I was unable to obtain sufficient, appropriate audit evidence for journals processed to broadcasting cost, signal distribution, and linking cost, marketing cost, professional and consultancy fees and other expenditure … which, in total, amount to R1 588 929 000, as supporting documentation could not be provided,” Nombembe said.
The SABC had also failed to adhere to the laws governing taxpayers’ money.
“Irregular expenditure to the amount of R106 322 000 was incurred, as proper tender processes had not been followed,” said Nombembe.
It also emerged that the broadcaster had procured goods and services through unfair and untransparent means.
Dismissing media reports that the SABC faced financial ruin, Makhoba said its major flaw was a financial reporting system that differed vastly with that used by the AG.
“The hybrid system that we were sitting with in reporting our finances was different to what the AG had, creating the confusion,” she said.
“When the AG assisted us, we found that his system was much wider and deeper and was not what we had previously used.”
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