Transition period was to blame says SABC

"The incomplete migration from the generally accepted accounting practice (GAAP) to the International Financial Reporting Standards (IFRS), coupled with a significant lack of capacity and training among finance managers, resulted in inadequate systems to maintain records," Mokhobo said.

She was responding to AG Terence Nombembe's issuing of a disclaimer opinion on the SABC's annual report tabled in Parliament, citing financial mismanagement and inadequate controls as the reasons for issuing the disclaimer.

Mokhobo was explaining the shocking results in the SABC's annual financial report. She said the SABC had previously used a system of recording and reporting on its financials that was a hybrid of that used by the auditing firm KPMG and that in use by Nombembe.

"When the AG assisted us, we found that his system was much wider and deeper and was not what we had previously used," she said.

The AG found that the SABC was unable to provide documentation to account for more than R1.5bn in expenditure.

"Caught off guard"

"Caught off-guard is not the right word. The stark differences in how they do their testing threw us. We were quite surprised at the intensity and we didn't realise the level of intensity until the closing processing," said Mokhobo.

She said the SABC had also suffered a huge loss of skills in the finance department and had inherited problems dating back to before 2008.

Mokhobo said the SABC would exercise fiscal prudence when its government-guaranteed loan was paid off at the end of September.

"The SABC has made R330m in profits after taxes and we will be paying off the government guaranteed loan at the end of September," she said.

Mokhobo said the partial financial freedom would not translate into careless spending but would be invested in turn-around strategies including training staff in its financial department.

Meanwhile, the Democratic Alliance said it planned to ask that President Jacob Zuma to refer the report to the Special Investigating Unit (SIU) for further investigation.

"It is unacceptable that the SABC is unable to account for TV licence fees of almost R1bn. South Africa cannot be expected to continue paying licence fees to fund the SABC, if this funding will simply disappear into the ether," DA spokeswoman Marian Shinn said in a statement.

Source: Sapa via I-Net Bridge