Alexkor proves the dire need for Minister Gordhan to either act or resign
26 May 2021
Due to its own incompetence regarding its capacity to finalise its auditing duties, State-owned entity Alexkor, a failed mining company, published its annual report for fiscal 2019/20 seven months after the due date.
It is exactly for this reason that I introduced the Public Finance Management Act Amendment Bill last year, so that Ministers such as Pravin Gordhan can be held accountable for not submitting audited annual reports timeously.
As expected, the failed SOE received a disclaimer of opinion for the second consecutive year, with the Auditor-General’s office specifically noting that there are material uncertainties that cast significant doubt on the group’s ability to continue as a going concern.
This is not surprising considering that Alexkor’s internal accounting systems are an abysmal failure and incongruent with basic accounting standards. For instance, no reviews of the residual values and useful lives of property, plant and equipment were undertaken at each reporting date, the entity had no proper record of inventory, and failed to provide appropriate audit evidence regarding its cash flows as well as its contingent liabilities. The latter omission is especially egregious considering the fact that Alexkor’s debts make up almost 75% of its total assets.