The airline South African Express has withdrawn its 2010/11 financial statements that were presented to and approved by Parliament last year.
Briefing the Portfolio Committee on Public Enterprise on issues that were raised by the Auditor General on the previous year's annual and financial report, Chief Executive of South Africa Express, Inati Ntshanga, said the financial statements were inaccurate and unreliable. The airline had indentified weaknesses in oversight of controls as the major problem. Therefore "in reviewing the financials, inclusive of all accounts and balances, it did not just correct the two known errors," he said.
The committee expressed concern at the state of affairs at the airline and the direction in which it was going. Ms Connie September said "if that is the case Parliament has been misled and unfortunately the Committee must do what the Public Financial Management Act requires asks us to do in this instance".
Members queried why the problem was not picked up by the internal auditors and the board audit committee.
During the meeting SA Express chairperson Ms Lilian Boyle gave a report back on the Sizwe Ntsalubua VSP Forensics investigation that was reported last year in November after a whistleblower alerted the organisation in August, about an irregularity. Ms Boyle said after the investigation, "I can tell you that the board is convinced that at no stage was there intention to defraud, cheat or harm the company. What has taken place, sad to say, is the same problem as at many South African companies: the lack of accounting skills and comprehension. I think problems have become compounded over time."
The board was convinced there is nothing more serious than sloppiness and carelessness. "These areas we can fix and these problems will not recur," Ms Boyle said.
Members refused to accept the explanation by South Africa Express. Natasha Michaels said "I don't think the South African public deserves an excuse of 'ignorance was the cause'. I think it's a sad state of affairs when you come before the committee and tell us it was sloppiness and lack of oversight, I find the excuse worrying".
Ms September suggested that it was the duty of the committee to ensure the matter was resolved, and to fix Parliament’s record. The annual report had been submitted and therefore there had to be confirmation that it had now been withdrawn.
"We cannot be found wanting on the laws that we make and pass. It has been confirmed in this meeting that Parliament has been misled," September said.
Members recommended that South Africa Express appear before the committee twice per quarter.
