ON THE MONEY
STUART THEOBALD: Eskom’s financials reveal how deep a hole its executives have dug for the government
If you want to feel your blood boil, download Eskom’s annual financial statements, which contain the most damning audit opinion I’ve read in 17 years of analysing companies.
On page 22 you’ll find SizweNtsalubaGobodo’s qualification.
The basis for the qualification is that Eskom "did not have an adequate system for identifying and recognising all irregular expenditure and there were no satisfactory alternative procedures that we could perform to obtain reasonable assurance that all irregular expenditure had been properly recorded", say the auditors.
Eskom recorded irregular expenditure of almost R3bn. But there is much more. The auditors also say they have filed a number of "reportable irregularities", a technical term for instances of likely fraud that auditors are required to report to the Independent Regulatory Board for Auditors. The auditors point to "material misstatements" in Eskom’s own disclosures about how well it is doing in meeting targets set by the government on the economic effect of the business. They also declare that Eskom’s procurement processes do not meet legal requirements, including the stipulation that suppliers provide tax clearance certificates.Then turn to note 48 on page 104 of the financial statements, where you will find the reportable irregularities. There are two of them, and they have to do with the amount of money that the top leadership has sucked out of the company. First is the disputed R30m pension fund contribution that Eskom made on behalf of former CEO Brian Molefe. The second concerns t...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.