PARLIAMENT, October 4 – Members of Parliament on Wednesday said state-owned enterprises were flouting the authority of the Auditor-General after it emerged that it asked auditing firm SizweNtsalubaGobodo (SNG) to review its clean audit of Denel’s finances to reflect irregular expenditure.
Auditor-General (AG) Kimi Makwetu’s office submitted a letter to Parliament’s portfolio committee on public enterprises in which he expressed concern about SNG’s financial audit findings of the state arms manufacturer, which is also employed by Eskom and Transnet.
According to the AG, the opinion needed to be changed to that of an unqualified audit with irregular spending.
Senior SNG director Aaron Mthimunye countered that the firm had already noted the non-compliance when it received Makwetu’s letter and raised it with Denel but was met with “considerable resistance” from the company’s chairman and chief financial officer.
The public enterprises spokeswoman for the Democratic Alliance, Natascha Mazzone, said: “It is completely unacceptable that a board and the executives of a public entity would see it fit to not only submit incorrect financials but also deliberately refuse to follow an instruction by an auditing firm.”
She said Denel could be in breach of section 55 of the Public Finance Management Act (PFMA), which compels the accounting authority of a public entity to keep full and proper records and give a fair picture of its financial performance.
For Denel to refuse to cooperate was a sign of the disrespect of parastatals for Chapter Nine institutions, she said.
The acting chairman of the committee, Mondli Gungubele, said the committee wanted to see the minutes of the conversations between SNG and the AG’s office to get a clear view of what happened. Former finance minister Pravin Gordhan suggested the wrangle could impact on public trust in the audit findings of public companies.
Denel was involved in a legal with National Treasury over its plans to enter into a joint venture in Asia with a company run by Salim Essa, a close business associate of the Gupta family at the centre of allegations of state capture. It broke ties with the company, VR Laser-Asia, in August, citing reputational damage.
– African News Agency (ANA)