The department said the embattled utility’s exemption from disclosing irregular expenditure was to prevent it from receiving qualified audit opinions.
JOHANNESBURG – National Treasury said the exemption that it granted Eskom did not mean that the power utility should not take appropriate steps to prevent irregular, fruitless, and wasteful expenditure.
The department said that the move was meant to prevent the power utility from receiving qualified audit opinions, among others.
National Treasury further said the exemption granted to Eskom would enable it to continue to fund its balance sheet and still maintain accountability and transparency.
On 31 March, Minister of Finance Enoch Godongwana issued a gazette that exempted the power utility from disclosing irregular and fruitless expenditure in its annual financial statements for three years.
The move was widely criticized by opposition parties and industry experts.
However, National Treasury said that Eskom would still have to report fruitless and wasteful expenditure in its annual report, but not in its financial statements.
This meant those particulars would no longer be subject to a full audit by the Auditor-General (AG).
Eskom said the exemption would alleviate the possibilities of a qualified audit opinion by the AG, which might, in turn, lead to the power utility’s downgrade by rating agencies.
But some opposition parties said the exemption might open doors for widespread corruption at the embattled power utility, something National Treasury dismissed.
Source: Eyewitness News