State-owned entity Eskom has failed to submit complete and accurate financial statements
to National Treasury and external auditors since May 31 2022 to date.
This means the government parastatal has for more than two consecutive years failed to submit complete and accurate financial statements to National Treasury and external auditors.
Moreover, Eskom got a qualified external audit opinion from the Auditor General for its 2024 financial year. This was due to Public Finance Management Act (PFMA) records not being complete or accurately maintained in line with legislative requirements.
The said legislative requirements relate to irregular expenditure, fruitless and wasteful expenditure, and losses due to criminal conduct.
Reportable irregularities during the 2024 financial year
This was revealed on Thursday during Eskom’s announcement of its financial annual results for the 2024 financial year. The announcement took place at Eskom’s head office at Megawatt Park in Sunninghill, Sandton, Johannesburg.
The 2024 financial year covers the period of April 1 2023 to March 31 2024.
Present during the announcement was Electricity and Energy Minister Kgosientsho Ramokgopa. Eskom group CEO Dan Marokane and CFO Calib Cassim were also in attendance. So were group executive for generation Bheki Nxumalo and group executive for distribution Monde Bala.
Eskom board chairperson Mteto Nyati attended the results announcement virtually.
Speaking on the overview of Eskom’s 2024 performance, Marokane said Eskom had reportable irregularities during the 2024 financial year.
Prevention and Combating of Corrupt Activities Act (Precca)
He said those irregularities include breaches of environmental legislation relating to emissions and water. Also management’s inability to confirm that all matters relating to the Prevention and Combating of Corrupt Activities Act (Precca) were reported, non-compliance with recordkeeping requirements of PFMA and Companies Act, 2008. Investigations and consequence management relating to PFMA non-compliance not done timeously. Failure to submit complete and accurate financial statements to National Treasury and external auditors by May 31 2022 and onwards. Incorrect draft information provided to the Standing Committee on Public Accounts, and certain prescribed officers breached their fiduciary duty relating to short-term IPP programmes.
Marokane said consequence management and interventions were being actioned to deal with the irregularities.
Consequence management and interventions
The interventions include the executive team of Eskom being strengthened with appropriate skills for internal controls. Risk management and PFMA oversight; consolidation of Eskom’s forensics, security and investigative functions under the Group Investigations and Security function reporting directly to the Group CEO; establishing of a dedicated project management office to address findings from data analytics as well as internal and external
investigations. Addressing the backlog in investigations and disciplinary action; resourcing drive to adequately capacitate the finance, internal audit and forensics functions. Executing generation recovery plan, and strengthening focus on environmental compliance, among others.
Since March 26 2024 to date, the country has not had load shedding for 268 consecutive days.
