Ministers explain why audited annual reports were not submitted on time

At least six public entities, including financially troubled SAA and tertiary education funder NSFAS, have failed to submit audited annual reports to parliament by the required legal deadline of September 30.

This was announced by parliament on Wednesday morning in its public communication mechanism, the ATC.

The ATC listed six letters from ministers such as Pravin Gordhan of public enterprises, Blade Nzimande of higher education and Nkosazana Dlamini-Zuma of co-operative governance in which they explained reasons for failing to submit their audited financial statements to parliament.

This is not the first time that cash-strapped and state-owned airlines SAA and SA Express have missed the deadline to submit their annual reports to parliament.

In his letter to parliament's two houses - the National Assembly and the National Council of Provinces - Gordhan told MPs that the boards of SAA and SA Express had been unable to finalise and submit their annual reports to him within the time frames set out in the Public Finance Management Act.

"Both airlines are experiencing serious financial challenges and are unable to meet going concerns," said Gordhan in his letter.

"SAA board has informed me that the newly appointed interim CEO and the interim CFO need more time to submit the required information for audit to the auditor-general for the 2018/2019 financial year."

Gordhan said the airline's financial statement would be submitted "as soon as the going concern challenges are resolved".

He also reported that state-owned mining firm Alexkor was also unable to submit its annual report for similar reasons.

For his part, Nzimande told MPs that he was not in a position to table the NSFAS annual report for the 2018/2019 financial year.

Nzimande said the office of the auditor-general had raised material issues about NSFAS, which disburses about R32bn in loans to tertiary students.

"The auditor-general has informed the NSFAS of a material issue which requires further analysis and evaluation. This has an impact on the valuation of the NSFAS student loan book since 2014," says Nzimande is his letter to parliament.

"The auditor-general has advised that it will inform NSFAS on October 4 2019 as to what the remaining timelines will be for the completion of the audit, which is a prerequisite for the completion of the annual report for 2018/2019."

Dlamini-Zuma explained that her department was unable to submit its annual report on time due to "the incomplete audit of assets related to the community works programme".

"The delayed submission of the 2018/2019 annual financial statements by the department consequently impacted on the time frame for the finalisation of the audit process by the auditor-general of SA in terms of section 40(2) of the PMFA," she said in the letter.

Energy minister Gwede Mantashe reported that nuclear energy firm Nesca would  submit its annual report only by the end of October.

This was after it requested more time before submitting anything to the auditor-general.

"Nesca group annual report will not be submitted within the required time frame due to a decision which was taken to extend the audit process until 30 September 2019. Nesca board had requested for an extension to submit its group draft annual financial statement (AFS) to auditor-general (AG) by July 31 2019.

"The AFS forms part of the annual report. The minister of department of minerals resources and energy (DMRE) granted approval on July 30 2019."