SABC blows R1.5bn

Financial mismanagement continues to ravage the SABC, with its latest annual report showing a failure to account adequately for R1.5-billion spent on consultants for services that could have been provided by its own staff.

What is likely to shock South Africans is that about R913-million in TV licence fees that SABC officials claimed to have collected cannot be backed up with evidence.

Tabling the public broadcaster's annual report yesterday, Communications Minister Yunus Carrim said auditor-general Terence Nombembe had slapped a disclaimer on the SABC's financial results.

This means Nombembe was unable to express an opinion on the veracity of the corporation's financial statements because he "could not obtain sufficient [and] appropriate audit evidence".

The latest audit outcome suggests the broadcaster slid back after obtaining a clean audit in the 2011-2012 financial year.

The litany of financial transgressions uncovered at the SABC include:

• Supporting documents for the hiring of consultants and other service providers at a cost of R1.5-billion could not be produced;
• A further R106-million was spent irregularly as proper tender procedures were not followed;
• Tax payable to the SA Revenue Service was understated by more than R47-million; and
• No provision was made for any financial liability the SABC might incur despite being a defendant in a number of lawsuits.

The revelations do not augur well for the broadcaster. Its executive management was instructed in 2009 to tighten up its financial controls after it was granted a R1.4-billion loan guarantee by the National Treasury.

In the annual report, SABC CEO Lulama Mokhobo admits that the broadcaster failed to meet performance targets attached to the government's loan guarantee. She said the corporation was more than R600-million below its revenue targets.

She attributed this to the underperformance of key revenue streams , with sponsorships coming in R368-million lower than the target and the sale of content R62-million below budget . Advertising revenue was also under target by R190-million.

She said, however, that this failure had not affected the SABC's cash flow.

Mokhobo vowed next year's audit report would show improvements.

A n industry expert said the annual report showed that the SABC' s problems were far from over.

DA MP Marian Shinn said her party would ask parliament's portfolio committee on communications to convene a meeting with Carrim at which he would be asked to present a plan to solve the SABC's problems.

Shinn called for the removal of Hlaudi Motsoeneng as the SABC's chief operating officer. Under Motsoeneng's tenure, management, staffing, financial and editorial crises had escalated, she said.

Carrim said he had established a task team to strengthen financial controls at the SABC.

"On behalf of the shareholder, our department will also exercise far more strategic oversight over the SABC. A turnaround will not happen overnight. But if all the relevant parties cooperate, there will certainly be improvements over time," he said.

Kate Skinner, a broadcast policy researcher, said: "The annual report indicates serious financial management problems at the SABC. The financial situation is far from sorted despite assurances from SABC leadership that the finances had been turned around."

PROGRAMMES THAT LEAVE A LOT TO BE DESIRED

• THE SABC failed to reach a deal with Cricket SA and had no live broadcasts of the Proteas' Test series against New Zealand.

• The corporation embarrassed itself in parliament again when it revealed it had spent R10.8-million on legal fees to resolve disputes over the dismissals of its executives and another R19.5-million on corruption investigations.
• The public broadcaster has for a while been running "power bulletins" from Eskom, asking viewers to switch off certain appliances, when most of the time they should be switching off their TV sets thanks to the endless reruns.

It claimed to have spent R758-million on producing new local content last year. Though SABC1 seems to be faring better in terms of commissioning new shows, sister channels SABC2 and SABC3 still air old seasons of American Idol, The A-Team, The Dr Oz Show, Brothers & Sisters, The Cosby Show and others.

• A licence fee hike of 6% kicked in at the beginning of this month.
• Perhaps the public broadcaster's biggest achievement has been keeping money-spinning soapie Generations going. - Andile Ndlovu