PHUTI MOSOMANE
THE National Treasury has announced it has withdrawn the exemption granted to Eskom, which had been a subject of controversy.
Last week, National Treasury announced that it has exempted Eskom from reporting irregular, wasteful and fruitless expenditure in its Annual Report.
Minister of Finance Enoch Godongwana told a joint Parliamentary Committee that because of the history of corruption in South Afriuca the public has taken an interest in the exemption.
“We appreciate that South Africans are quite aggressive and vigilant against corruption, which is going to be an important point for our society. We take that as a positive step,” he told the committee.
He said the national treasury had an intensive discussion with the Auditor-General of South Africa and said comments by A-G’s office will be part of the framing of the gazette going forward.
“In light of those comments and generally the comments by the public, we have decided to withdraw the gazette for now and take all these comments into account, and also have a detailed consultation with the Auditor General and the auditor of Eskom so that checks and balances for corruption are tightened,” Godongwana said.
On Tuesday, National Treasury had explained that reporting these irregularities increased the “likelihood of qualified audit opinion… that triggers loan covenants, which will likely further increase Eskom’s cost of borrowing and may result in additional fiscal pressure from Eskom’s debt burden”.
Parliamentary Standing Committee on Finance Chairperson Sifiso Buthelezi said they want to know what informed National Treasury to exempt Eskom from complying with certain provisions of the Public Finance Management Act (PFMA).
SCOPA Chairperson Mkhuleko Hlengwa, who is co-chairing the joint meeting, described the exemption as “legislative gymnastics” and an attempt at “sanitising Eskom’s books.”
NFP MP Shaik Emam said: “Who did you engage and get guidance and advice from in wanting to go this direction in the first place?”.
On Tuesday COSATU said it is shocked and alarmed by what it describes as National Treasury’s reckless and shady decision to exempt Eskom and Transnet from disclosing irregular fruitless and wasteful expenditure in their financial statements.
In granting the exemption, the national treasury said the exemption still required Eskom to disclose financial and non-financial information on irregular,fruitless and wasteful expenditure but only in its annual report.
All other institutions are required, by law, to report irregular as well as fruitless and wasteful expenditure in the annual report and the annual financial statements as set out in the PFMA section mentioned above.
“Whilst the historical (i.e. previous year) information was also reflected in the annual financial statements, a separation in the reporting of irregular and fruitless and wasteful expenditure across the annual report and annual financial statements was made for all institutions from the 2022/2023 financial year,” treasury said.
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