Internal control deficiencies result in qualified audit opinion for state’s Safcol
State-owned forestry company Safcol received a qualified audit opinion for its 2016-17 financial statements because it failed to record all irregular expenditure incurred during the year. Two amounts of irregular expenditure of R270m (for the group) and R32m (for the company) were understated by R108.4m and R30.9m, respectively. The auditor-general noted that Safcol had not taken effective steps to prevent irregular expenditure, which was due to "significant internal control deficiencies". Procurement processes were not fair, equitable, transparent and competitive, and proper control systems to safeguard and maintain the group’s assets worth R4.7bn were not implemented. Notwithstanding the negative audit findings, the group’s revenue for the year exceeded R1bn for the first time, and it achieved an after-tax profit of R114m compared to the previous year’s loss of R43m. In his statement in the annual report tabled in Parliament, acting CEO Gabriel Theron said that management was "ver...
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