Times Of Swaziland: ESWACAA INCURS E1.348 BILLION LOSS

ESWACAA INCURS E1.348 BILLION LOSS
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Stanley Khumalo on 12/05/2022 09:04:00


MANZINI – Eswatini Civil Aviation Authority (ESWACAA) has an accumulated loss
of E1.348 billion.
This is one of the findings of the Auditor General, Timothy Matsebula, which he
said threatened the ability of the parastatal to sustain delivery of services to
the public and achieve its mandate. He said the indications of the existence of
material uncertainties included a net deficit of E162 206 790 and accumulated
loss of E1 348 832 659. Matsebula also said ESWACAA had not remitted taxes
amounting to E12 335 642 to the Eswatini Revenue Services (ERS) and had current
liabilities which exceeded its current assets by E17 514 632.
The findings by the AG are published in his Compliance Audit Report for the
Financial Year ended March 31, 2021.
Matsebula said he reviewed the audited financial statements and audit report to
management of ESWACAA for the financial year ended March 31, 2021, as required
by the Public Enterprises (Control and Monitoring) Act 1989, PEU Circular No. 3
of 2008, and Section 21 (2) of the Audit Act of 2005. Upon doing so, he said his
findings were communicated with the Principal Secretary (PS) in the Ministry of
Public Works and Transport, Thulani Mkhaliphi, through a report referenced
C37/23, dated March 18, 2022.  He reported that the PS responded through letters
dated March 24, 2022 and April 27, 2022 referenced WT/ADM/06. However, he said
it remained unresolved that the Civil Aviation Authority incurred a net loss of
E162 206 790 for the year ended March 31, 2021 and a net loss of E176 912 022 in
the year ended March 31, 2020. As such, Matsebula said the accumulated deficit
stood at E1 348 832 659.00 as at March 31, 2021. “This means that the entire
investment made by the shareholder (government) is at risk of being drained and
the shareholder might be indebted to rescue the public enterprise,” said
Matsebula.
He raised a concern that ESWACAA was reliant on the subvention grant from
government and in the financial year under review, the parastatal received a
subvention grant amounting to E124 099 661 which indicated a decrease of E10 281
791 (8 per cent), from the previous year’s subvention of E134 381 452. The AG
said Mkhaliphi concurred with his observation and the latter stated that
ESWACAA’s reliance on the subvention grant from government was correct. He
said the PS further stated that this was true for most of the civil aviation
authorities all over the world particularly within Africa and ESWACAA was
advised that the reduction (from the allocation in the Appropriation Act 2021)
was necessitated by changing government priorities in the wake of the COVID-19
pandemic.
“The Authority suffered a reduction of about E7.5 million in landing,
overflight, parking and permit fees while airport tax collections were reduced
by about E2.3 million as a result of the reduced activity that was necessitated
by the effects of the COVID-19 pandemic,” the AG reported. Matsebula reported
that the PS further stated that they were convinced that with the relaxed
restrictions, a timely and full release of the government subvention and the
improved aviation activities ESWACAA should post better financial results,
beyond the 2021 financial year, this item had been a source of concern even to
the parastatal’s leadership hence the special mention of its ongoing concern.
Furthermore, he said Mkhaliphi said among the expenditure controls that had been
implemented by ESWACAA in the financial year ended March 31, 2022 to improve the
situation, included a restructuring, as recommended in a job skills audit report
that was released in 2019. He said this exercise resulted in the merging of
three directorates into one, while the fourth was incorporated into an existing
one. Matsebula said the directorates that were merged into one (now corporate
services) were legal services, human resources and marketing.  He said the
fourth was the Air transport directorate which was incorporated into the flight
safety standards directorate. This restriction, he reported, would result in
reduced manpower costs.
“All the Authority’s vehicles were ‘surrendered’ to the pool. These
include the vehicles that were dedicated for use by the four directors and those
that were used for staff travel to and from work,” he reported.
Matsebula said this initiative should result in reduced vehicle maintenance
costs, hence an improvement in the operating deficit. The AG said the response
of the PS was acknowledged; however, the issue of unsustainable service delivery
and threats towards the ability to achieve its mandate still remained a concern.