Durban — The government has come under fire for granting troubled Eskom an exemption from disclosing irregular, fruitless and wasteful expenditure on its annual report and not annual financial statements.
The power utility was granted a partial exemption by the National Treasury from the Public Finance Management Act on March 31 until March 31, 2025.
The treasury said the exemption would enable Eskom to continue to fund its balance sheet and still maintain accountability, transparency and reporting requirements in its annual reports and annual financial statements.
“If the exemptions were not considered, it would place pressure on the fiscus and limit the SOE’s borrowing powers.”
The Organisation Undoing Tax Abuse (Outa) said Eskom’s exemption went against the Public Finance Management Act (PFMA) that regulates the financial management of government departments and public entities.
Outa CEO Wayne Duvenage said, “Exempting Eskom from complying with certain sections of the PFMA sends a clear message that the government is not serious about transparency and accountability when it comes to Eskom’s financial management practices.”
African Democratic Change (Adec) leader Visvin Reddy said SOEs were already under scrutiny for their poor management and wasteful expenditure.
“The exemption granted to Eskom will have serious implications on investor confidence and credit ratings, which will ultimately negatively impact the economy.”
Reddy said it was the government’s responsibility to be transparent with the public about wasteful, irregular and fruitless expenditure.
“This decision raises suspicions and undermines trust in the government’s ability to manage the country's finances.”
The public had a right to know how their tax money was being spent, he said, and any attempts to hide irregularities in expenditures only serve to undermine the country’s democracy.
The DA spokesperson on finance, Dr Dion George, said it was unacceptable to hide material financial information from auditors in the hope of obtaining a better audit outcome.
This exemption further eroded confidence in the already battered economy, he said.
“The government is unable to manage any state-owned entities’ responsibly and this attempt to hide the extent of that dysfunction cannot be tolerated. Hiding information only serves to promote corruption,” said George.
Eskom acting group CEO Calib Cassim said: “Eskom will abide by the conditions and monitoring requirements imposed by the National Treasury.”
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