Why Eskom has been spared from irregular spending reports
exempt Eskom from having to report irregular spending for three years in its financial statements to avoid harming the company’s credit rating.
Exempting the company from reporting those costs in its financial statements may reduce the risk of a qualified opinion from the utility’s auditors and in turn protect the company’s credit rating, according to the treasury.“The consequences of a qualified audit for Eskom are severe,” Makwana said in a 9 March letter to Godongwana released by treasury.
Reporting transparency and accountability won’t be compromised, while risks that could arise if these transactions are reported in the annual financial statements will be mitigated, national treasury said in a statement on Monday. National treasury in February announced it would take over R254-billion of Eskom’s loans as the company isn’t earning enough to cover its debt-service and running costs. As a result, the country is experiencing regular rotational blackouts.