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Explainer: Eskom & Transnet exempt from reporting expense irregularities in financial statements

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Finance minister Enoch Godongwana has granted Eskom an exemption from regulations under the Public Finance Management Act (PFMA) that require state-owned companies to disclose any expenditure that does not comply with the provisions of the act. According to a notice in the Government Gazette of March 31, Eskom & Transnet will be exempt from disclosing in its annual reports for three years, starting from the financial year that runs until end-March 2023 in an attempt to restore Eskom’s balance sheet through debt relief and enable the utility to borrow again to invest in new transmission infrastructure for the former. In this conversation, Khaya Sithole, Accountant & Academic, and SOE Expert & Development Economist & Executive Director at SE Advisory, Dr Bheki Mfeka, join Lerato Mbele to discuss whether these exemptions from the PFMA can stop SOEs from getting qualified audit opinions and what impact it has on accountability for outputs and outcomes.            

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