JOHANNESBURG – National Treasury said it would continue to work with the Office of the Auditor General to develop a revised irregular, fruitless, and wasteful expenditure framework to assist state-owned entities (SOEs) such as Eskom.
After initially granting Eskom an exemption from reporting wasteful expenditure in its financial statements, Treasury declined the request on Wednesday.
Fifty-six comments were received that formed the basis for the National Treasury declining Eskom’s request.
If it was granted, the exemption would have meant that Eskom was at a lesser risk of being granted qualified audit opinions.
But National Treasury said while it has turned down the power utility’s request, there is a need to revisit how SOEs should disclose their finances.
The department said it is of the view that SOEs are facing legitimate technical challenges regarding compliance reporting and that these challenges need to be addressed.
For this to happen, it said it would take into consideration the comments made by industry experts and engage with the AG.
It said once the consultation process has been completed, a framework, which will form part of the Public Finance Management Act, will then be implemented in 2024.