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Review of SOE's for Prioritization by SCO A During the 2016/17 Oversight Period

This presentation discusses the review of State-Owned Enterprises (SOEs) and other public entities for prioritization by the Standing Committee on Appropriations (SCO A) during the 2016/17 oversight period. It includes a list of identified SOEs and their track record of audit opinions, irregular expenditure, unauthorized expenditures, fruitless and wasteful spending. The presentation also highlights the positive side of certain entities and concludes with recommendations for better governance and financial management.

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Review of SOE's for Prioritization by SCO A During the 2016/17 Oversight Period

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  1. Presentation by: Musa Zamisa & Phelelani Dlomo August 2016 A Review of SOE’s for Prioritization by SCOA During the 2016/17 Oversight Period Research Unit

  2. LIST OF IDENTIFIED soe’s and other public entities 1. PASSEGER RAIL AGENCY OF SOUTH AFRICA (PRASA) 2. SOUTH AFRICAN POST OFFICE (SAPO) 3. SOUTH AFRICAN AIRWAYS (SAA) 4. SOUTH AFRICAN EXPRESS (SAX) 5. SOUTH AFRICAN BROADCASTING AUTHORITY (SABC) 6. INDEPENDENT DEVELOPMENT TRUST (IDT) 7. COMPENSATION FUND (CF) 8. CENTRAL ENERGY FUND (CEF) 9. NATIONAL DEVELOPMENT AGENCY (NDA) 10.SOUTH AFRICAN SOCIAL SECURITY AGENCY (SASSA) 11. BROADBAND INFRACO 12. SHELTERED EMPLOYMENT FACTORIES (SEF)

  3. Track record of Audit opinion

  4. Irregular expenditure, unauthorized, fruitless and wasteful

  5. 6

  6. 12

  7. 13

  8. Passenger Rail Agency of South Africa (prasa)

  9. Passenger Rail Agency of South Africa (prasa)

  10. South African Social Security Agency (Sassa)

  11. South African airways (SAA)

  12. BROADBAND INFRACO

  13. South African Broadcasting authority (sabc)

  14. SHELTERED EMPLOYMENT FACTORIES - 1943 • Employment service Act of 2014 - provide work opportunities for persons with disabilities; (textile and woodwork factories) • The agency received a qualified audit with findings, • Irregular expenditure of R16.5 mln, • Repeat findings, around the predetermined adjectives, • Repeat findings around the non compliance with legislations, • New findings on expenditure management and disclosures, • Repeat findings of the usefulness and reliability of the performance information submitted, • Some limitations in the submitted AFS or material misstatements – hence qualified audit,

  15. POSITIVE SIDE OF ENTITIES/SOE’s • INDUSTRIAL DEVELOPMENT CORPORATION (IDC) • TELKOM • SENTEC • SMALL ENTEPRISE FINANCE AGENCY (SEFA) • DEVELOPMENT BANK OF SOUTHERN AFRICA (DBSA) • DENEL NB: Note, this only looks at financial management, governance, compliance and not performance targets.

  16. conclusion • Governance issues are prevalent - non compliance with SCM, PFMA, Treasury Regulations, • The importance of SOE’s / Public Entities for gvt to achieve its mandate, • Non compliance with Section 55 (1), 38 (1) of the PFMA, • Irregular expenditure should be prevented at a planning stage (APP), or at non compliance stage, • Irregular, fruitless and wasteful expenditure has financial and non-financial impact • Lack of consequence management for transgressors remains a problem, • Link the HOD’s and managers contracts to the sound financial controls, • Government guarantees (Section 66 of the PFMA) - the implications, • Instability – the staff turnover levels is a great concern, • The Presidential Review Commission - recommended the inter- borrowing mechanism for SOE’s, - level of interest manageable & exchange rate,

  17. THANK YOU !!

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