Finance minister backtracks on giving Eskom exemption from reporting wasteful expenditure

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Finance minister Enoch Godongwana says Eskom will no longer be granted an exemption from reporting fruitless and wasteful expenditure. In the meantime, Treasury will work on reforms for the Public Finance Management Act.

However, following media and public backlash, the minister“The Minister recognises the commitment of the Eskom board and management to fight and expose fraud and corruption, and the additional compliance and reporting burden facing Eskom and other state-owned entities ,” Treasury said.

“The National Treasury also engaged with audit firms, professional auditing and accounting bodies, a rating agency, and other relevant authorities to discuss the challenges and seemingly onerous compliance reporting requirements applicable to state-owned Entities such as Eskom.” “In addition, as part of the Eskom debt relief arrangement, the Minister of Finance has instituted additional reporting obligations on Eskom, which the entity will be required to submit to Parliament and oversight structures.”

Treasury remains of the opinion that SOEs face legitimate technical challenges regarding compliance reporting, and the need to differentiate between corrupt and suspicious transactions and expenditure made in good faith but not necessarily complying with the plethora of financial and non-financial laws and rules.

“The National Treasury is committed to collaborating further with relevant stakeholders and authorities to contribute to these reforms and ensure that the PFMA adequately addresses the complexities of financial reporting in the public sector.”

 

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