SAA and Mango Audit reports a ‘horror show’
8 March 2018
South African Airways (SAA) and Mango airlines have received qualified opinions according to their audit reports, which were due in September last year, tabled in Parliament today. The reports can be found here and here.
The adverse findings by the Auditor General partly explain why there has been a such a reluctance by SAA to release its financial statements for 2016/17, which are yet to be made public after former Finance Minister Malusi Gigaba requested an extension after SAA missed the deadline.
The DA will write to the Finance Minister Nhlanhla Nene asking him to release SAA’s financials as a matter of urgency.
It is odd that the Auditor General has chosen to table the audit reports in Parliament, which is a complete departure from standard practice where audit reports are released as part of annual reports.
The audit reports expose a horrific picture of poor governance and alleged instances of looting, such as:
• assets not being recorded in financial statements, while the existence of some assets recorded could not be verified.
• SAA’s Technical unit’s inventory could not be verified and there is a lack of controls in place to manage the inventory.
• glaring accounting irregularities on maintenance costs and using incorrect exchange rates were recorded.
• the SAA group has not established controls to maintain complete records of irregular expenditure and wasteful expenditure
Minister Nene will need more than a good reputation to clean the mess at SAA. It is a horror show which requires a complete change to the culture and business model of the airline if its fortunes are to be revived.
Issued by Alf Lees MP - DA Shadow Deputy Minister of Finance, 8 March 2018