The Standing Committee on Public Accounts (SCOPA) was today briefed by the Auditor-General South Africa (AGSA) on the financial audit outcomes of the Passenger Rail Agency of South Africa (PRASA).
AGSA told the committee that while PRASA has improved its performance and compliance, moving from disclaimers to unqualified audit opinions over the years, there were still some findings in the agency’s audits. The AG reported that there is still much improvement expected for the agency to sustain the unqualified audit opinion.
The AG attributed the improved audit outcomes to the successful implementation of a multiyear audit action plan that systematically addressed matters that previously resulted in disclaimed and qualified audit opinions on the annual financial statements.
“In 2024-25, PRASA fully reconstructed its contract register – required for accurate disclosure of commitments and delayed and halted infrastructure projects under construction – thus, resolving prior year audit qualifications,” said AGSA’s Ms Ilze Dippenaar.
AGSA also noted there were no steps taken at PRASA to prevent wasteful expenditure and warned that failure to prevent irregular expenditure and fruitless and wasteful expenditure and resources not being used economically reduce critically needed funds for mandate execution and erode trust in the entity’s ability to responsibly manage allocated funds.
“The lack of consequence management may lead to a culture of non-performance, wrongdoing and lack of accountability; and the material uncertainty related to going concern indicates that PRASA may struggle to service its own operational costs and fulfil its mandate.” Ms Dippenaar told SCOPA.
AGSA also reported that there was limited progress made in performing investigations into irregular and fruitless and wasteful expenditure, and that investigations are being conducted or coordinated by Internal Audit, which did not have enough capacity to deal with the magnitude of the balance in a speedy manner.
Explaining the impact of lack of effective consequence management in relation to ongoing multiyear contracts, Ms Dippenaar said if these were appropriately dealt with from a consequence management and resultant condonation or write-off perspective, PRASA could have avoided having to report irregular expenditure amounting to R4 925 million in 2024-25 and R4 751 million in 2023-24, respectively.
AGSA recommends that a credible action plan should be developed and actioned to address irregular, fruitless and wasteful expenditure and enforce consequence management; and progress should be measured and monitored against this plan.
It is also important, AGSA recommends, to monitor progress to permanently appoint officials in senior management and fill critical units, especially supply chain management, with sufficient and skilled employees. “Progress on PRASA’s infrastructure rebuilding programme should be monitored, especially in relation to signalling infrastructure as well as delayed and halted infrastructure projects.
“The entity’s turnaround plan in relation to information technology should be closely monitored to ensure sound financial management is enabled through automated controls and cybersecurity can be ensured,” said Ms Dippenaar.
She also said measures must be taken to improve the financial management disciplines to improve financial health and quality of financial reports through regular processing and reconciling of transactions.
In welcoming the improved audit outcomes, SCOPA also resolved to invite PRASA to respond to a few issues raised in the AGSA report, on the overhaul audit outcomes, the rolling stock issue and irregular expenditure. “We will invite PRASA to submit a list of irregular expenditure with a breakdown of the amount, and where the process is including consequence management,” said SCOPA Chairperson Mr Songezo Zibi.
The committee will also invite the Special Investing Unit to discuss several issues related to investigations at the PRASA.
Sakhile Mokoena
18 March 2026
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