The auditor-general has warned about the going-concern status of the SABC, noting that the public broadcaster was commercially insolvent since the end of March. By Bekezela Phakathi
The SABC tabled its 2016-17 annual report in Parliament on Tuesday showing it had received an adverse audit opinion from the auditor-general and recording a staggering loss of R1.1bn versus R593m in the previous financial year.
The public broadcaster is facing its worst financial crisis and the Treasury is considering its request for a R3bn guarantee. It is feared it could collapse it fails to get the guarantee.
The SABC’s huge losses were attributed partly to axed executive Hlaudi Motsoeneng’s controversial 90% local-content policy, which the interim board has since canned.
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It is also struggling to collect licence fees. "In the past three years there has been a decline in revenue and an increase in expenditure, which led to the entity being in a net loss position in the past two years. The decline in revenue and cash collections has put the cash reserves of the entity under pressure," Auditor-General Kimi Makwetu said in the report.
He said that the SABC had not implemented adequate internal control systems to identify and record all irregular expenditure in the current and prior years. This had resulted in the understating of irregular expenditure.
"The full extent of the misstatement identified could not be quantified and I was unable to confirm the amount of irregular expenditure to be disclosed by alternative means.… I was unable to determine whether any adjustments to irregular expenditure disclosed at [R4.4bn] were necessary."
SABC interim board chairwoman Khanyisile Kweyama provided a frank and scathing assessment of the public broadcaster’s performance in the 2016-17 financial year.
"It [the year under review] had all the hallmarks of an institution under enormous financial, political and leadership strain…. The year also saw the constant featuring of the SABC in news coverage through intermittent court actions and utterances by management that were of such negative order that they led to the suspension of the chief operating officer [Motsoeneng]. We also saw mismanagement of the corporation’s finances at terrifying magnitudes, resulting in its inability to settle debts as they fall due," she said.
"At the same time, those tasked with leadership of the corporation were reluctant to admit to the glaring crisis, preferring to draw up a corporate plan that did not address the operational, reputational and financial realities of the SABC."