PFMA 2019-20 Report

on national and provincial audit outcomes 53 The number of auditees that submitted quality financial statements increased – the bar still remains low with only 49% of the auditees being able to give us financial statements without misstatements. Of the 196 auditees that gave us poor financial statements, 97 could correct all the material misstatements we identified – resulting in 74% The following 11 auditees had still not submitted their financial statements for auditing by the cut-off date for inclusion in this report of 30 November 2020: AUDITEES REASONS FOR NON-SUBMISSION State-owned entities South African Airways Air Chefs Mango Airlines SAA Technical South African Airways did not submit financial statements due to material uncertainties around its going concern. The entity has been under business rescue since 5 December 2019, following a board resolution. Air Chefs, Mango Airlines and SAA Technical did not submit financial statements due to the ongoing business rescue proceedings at South African Airways and interdependencies of the subsidiaries within the group. The financial statements of Mango for 2018-19 are also still outstanding and for South African Airways, SAA Technical and Air Chefs, both the 2017-18 and 2018-19 financial statements are outstanding. South African Express Airways Operations were disrupted following the entity being placed under business rescue and subsequently in provisional liquidation as of 9 June 2020. LMT Holdings SOC Limited (subsidiary of Denel) LMT Products SOC Limited (subsidiary of LMT Holdings) LMT Products has been under business rescue since September 2019. LMT Holdings decided to discontinue its operations due to the interdependency it had with LMT Products. Other national public entities Compensation Commissioner for Occupational Diseases Inadequate financial systems and internal controls resulted in inaccurate financial information, which led to the late submission of financial statements for a number of years, resulting in a backlog that dates back to 2011. Significant progress has been made in addressing the backlog and the financial statements for 2018-19 were submitted on 1 February 2021. North West provincial public entities North West Transport Investments Atteridgeville Bus Services North West Star The North West Transport Investments group was placed under provisional liquidation in 2018-19, resulting in uncertainty on the accounting framework to use. There was also a lack of capacity to prepare financial statements within the group. of the auditees receiving unqualified audit opinions. This means that if we had not identified the misstatements for the auditees and allowed them to correct these, 51% of the auditees (72 departments and 124 public entities) would have published financial statements that were not credible.