SAA out of business rescue but still not on stable ground

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The auditor general report noted that national carrier is fully-funded by equity or bailouts, but inefficient governance is keeping it on choppy waters

Lost your password? Please enter your username or email address. You will receive a link to create a new password via email.Audit outcomes for SAA have regressed mainly because of poor management and governance that the airline failed to establish after exiting business rescue in 2021. have regressed mainly because of poor management and governance that the airline failed to establish after exiting business rescue in 2021.

“When you look at the restart plan or the expansion plan, the entity is still delayed, and the main cause of that is that there is a lack of funding. The entity is fully funded based on the capital injection. There are no loans so the entity struggled to get the funding to fund the expansion plan,” said Thato Kunene, the senior manager responsible for the SAA Group audit.

“So this disclaimed audit opinion paints that SAA has an environment that is failing to implement robust financial management systems and credible records and also we have noted that the action plans are not actually prepared by management to address some of the qualification areas that we had.” Mango was placed under business rescue in July 2021 after receiving R420 million from the 2020 medium-term budget, but Kunene said there were no prospects to revive the airline.

He said a disclaimer of opinion audits on the financial statements rendered them not reliable for purposes of decision-making and recommended that the board and management stabilise the governance and internal capacity of SAA, and fill vacant executive positions with skilled staff to improve financial outcomes and business operations.

“For the first time, I think since 2017, they were in a position to provide us with an asset register that we could actually audit and conclude on during the 2022-23 year,” Myburgh said. Ilza Dippenaar, who was part of the Prasa audit team, said the agency had “emerged from years of disclaimed opinions”.

Myburgh alluded to compliance concerns, specifically related to supply chain and procurement processes.

 

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