South African Express’s finances are so precarious that the auditor-general has flagged the airline’s ability to meet its obligations to creditors without going into the red.
This came out during a sitting of the standing committee on public accounts on Tuesday, when the departments of transport, home affairs, environmental affairs and public works, as well as the airline, had to explain why they have not tabled their 2015-16 annual reports.
Public Enterprises Minister Lynne Brown, the shareholder representative, has petitioned Parliament for an extension because the airline is awaiting a government guarantee before it can finalise its financial statements. Chairman of the committee Themba Godi told Business Day that Auditor-General Kimi Makwetu was concerned about South African Express’s ability to pay creditors without being liquidated.
The Department of Transport’s fight with technology company Tasima about the management of the electronic national administration traffic information system is holding up its annual report.
The committee is satisfied with the Department of Home Affairs’ explanation for not submitting its report on time. Home Affairs Minister Malusi Gigaba has written to Parliament to explain that some of his department’s assets do not have documents supporting their value.
Gigaba said on Tuesday that the auditor-general would send the department’s final audit report by Friday, which would enable it to table its 2015-16 annual report in November.
Environmental Affairs Minister Edna Molewa is challenging Makwetu’s finding against her department, hence the delay in tabling its annual report.
The Department of Public Works and its entity got a three-year exemption from complying fully with Generally Recognised Accounting Practices, but the auditor-general is concerned about the department’s ability to meet the standards when the deadline lapses.
The office of auditor-general will present its side of the story on Wednesday.
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