Parliament, Thursday, 30 January 2025 – The Portfolio Committee on Electricity and Energy has expressed grave concerns over the continued governance and financial challenges plaguing Eskom, as highlighted in the latest audit report presented by the Auditor-General's Office and auditing firm Deloitte.
The audit findings paint a bleak picture, with Eskom receiving yet another qualified audit opinion for the 2023/24 financial year. Persistent material misstatements in Eskom's financial statements have required extensive audit interventions to improve their quality. Additionally, significant internal control deficiencies have hindered Eskom's ability to prevent material non-compliance findings over multiple years. The reports also indicate qualified audit opinions on irregular expenditure, fruitless and wasteful expenditure, and losses due to criminal conduct. There are widespread breakdowns in supply-chain management and procurement processes, including the abuse of deviation procedures.
Compounding these issues is the inability to quantify the full extent of the creation of illicit prepaid electricity tokens due to these control weaknesses, along with a failure to implement recommendations and address repeat audit findings over successive years.
Committee members raised important questions regarding the ongoing financial irregularities, accountability measures and the effectiveness of internal controls. The committee expressed concerns about the reported irregular expenditure, with the Auditor-General (AG) confirming that these irregularities stem from inadequate internal controls and a lack of compliance with procurement processes.
Accountability measures were also a focal point of discussion, as members posed questions about the enforcement of accountability for financial misconduct. The AG emphasised that while findings of irregularities have been reported, the pace at which investigations are conducted remains a significant concern.
Clarification was also sought on the implications of criminal activities, including the generation of illicit prepaid tokens. Deloitte indicated that existing systems have vulnerabilities that enable such activities, reiterating the urgency of strengthening IT controls and monitoring mechanisms to prevent further occurrences.
The committee also discussed Eskom’s financial viability, in particular the alarming report indicating that liabilities exceed assets by approximately R50 billion. The AG stressed that without substantial improvements and adherence to recommended actions, the entity risks insolvency, which could have dire consequences for service delivery.
Members inquired about the status of implementing the AG’s recommendations from previous audits. Responses indicated that while some progress has been made, many critical recommendations remain unaddressed.
The committee expressed deep frustration at the lack of accountability and consequence management within Eskom, which has allowed these problems to persist. Members stressed the urgent need for Eskom's leadership to instil a culture of performance, transparency and integrity to address the entrenched governance and financial challenges.
The committee will engage directly with Eskom's management and board during its next meeting on 31 January 2025 to ask for clear action plans and timelines for resolving the audit findings.
Committee Chairperson Ms Nonkosi Mvano said, “The people of South Africa cannot continue bearing the brunt of Eskom’s failures. Decisive action is needed to fix the utility’s operations and finances and hold those responsible for the current state of affairs accountable.”
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON ELECTRICITY AND ENERGY, MS NONKOSI MVANA.
For media inquiries or interviews with the Chairperson, please contact the committee’s Media Officer:
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