When to Hire an Accountant

Most accountants will tell you they could have saved their small business clients a lot of time, money, and headaches. That is if those clients hadn’t waited so long to ask for help. Bottom line is that there are several key times in the course of your business when you don’t want to wing it without an accountant.

Forming Your Business

The formation of your business is one of those key times. An accountant can:

  • Help you write your business plan. If you’re not looking for funding, though, do you even need a business plan? If you’re planning to lease office, retail, or manufacturing space, your landlord may require one. Plus, it’s a good idea to have a direction and goals for your business rather than playing it all by ear.
  • Advise you on your business’s entity structure. Although most businesses start out as sole proprietorships, your particular business type or personal financial situation might mean another entity structure makes more sense. At the very least, you should probably consider creating an LLC as a freelancer for legal and financial protection. An accountant can help you with this!
  • Help you get all the appropriate licenses. Sales tax permits, business licenses, employment accounts… oh my! Every state—and in some cases, every city—has different requirements for business. And different industries have different requirements, too. An accountant can help you untangle all of the red tape and make sure you start your business on the right (read: legal) foot.
  • Help you set up your bookkeeping software. At the risk of losing my bookkeeper’s membership card, I’ll let you in on a little secret: Most small businesses don’t need to engage a bookkeeper on an ongoing basis right away. There comes a point where you’ll want to outsource or delegate yoursmall business bookkeeping, but up until that time you can probably handle your own bookkeeping and hire a bookkeeper to do periodic reviews of your work.

That said, you don’t want to try to set up your own business accounting software, no matter how easy that software seems to be. An accountant can help you set up your chart of accounts correctly and might even train you on how to use your software, especially if they’re a QuickBooks ProAdvisor. And if your accountant doesn’t offer this service, they probably know a bookkeeper who does.

Compliance and Tax Issues

Even if your business plan is written, you have all the required permits and licenses, and your bookkeeping software is new and shiny and ready to go… you’re not quite ready to go forward without an accountant.

There are still dozens of compliance stumbling blocks to overcome. Don’t try to wing it without an accountant if you have:

  • Complex sales tax issues. Sales tax compliance in the US is quickly becoming a nightmare. If you’ll be shipping your products out of state—or in some cases, even within the same state—you’ll want to make sure you are in compliance with all the applicable tax laws. There are apps to help with this on an ongoing basis, but you’ll want an accountant to help you get everything set up.
  • Complex payroll issues. Wage and labor compliance issues can sink even the most profitable businesses. As with sales taxes, there are apps and programs that can help you with compliance on an ongoing basis, but you’ll want an accountant to look over your shoulder at least quarterly.
  • Other reporting requirements. These can be requirements for creditors or licensing agencies. Even those complex tax issues mentioned above can lead to other tax liabilities in various states. If you are required to report on your financial position for credit or credentialing, or if you do business in more than one state, you’ll want to continue working with an accountant.

When You Can Go at Things Alone

Now you can DIY your accounting, right?

Well, sure. But do you really want to? Remember that statistic that 89% of small businesses credit higher success to working with an accountant? 89% is a big number. So, although you can run your small business without hiring an accountant, you should really consider all of the other benefits you’d gain by joining the vast majority of business owners who partner with a finance professional—and reap the rewards.

Why You’d Want to Partner with An Accountant Year Round

Most accountants want to speak with their clients well before the end of the year. Remember, tax time is too late to start planning for your small business taxes.

But tax planning isn’t the only reason accountants want to meet with their clients before the end of the year. There are certain compliance issues—such as payroll tax underpayments—that are much easier fixed before the final reports for the year are filed.

How Accountants Can Help Every Small Business

If your business is growing—and we certainly hope it is!—meeting with an accountant quarterly can help in a number of ways. Quarterly meetings with an accountant can help you make sure:

  • You’re growing smartBelieve it or not, growth can sometimes tank your business. Regular meetings with an accountant can help you avoid growing too fast or in the wrong way.
  • Your quarterly tax payments are sufficient. As your income increases, so does your tax liability. The estimated tax payments you started with may not be sufficient if you experience a significant surge in business. Regular meetings with an accountant can help you avoid a nasty underpayment surprise at tax time.
  • You can see past your own blind spots. Although small business owners know their businesses better than anyone, sometimes it’s hard to see the forest for the trees. An accountant can help you take a big picture view of your business, which is vital for continued growth.

do-you-need-an-accountant-for-a-small-business

When It’s Actually Okay to Wing It

Sure, we’ve just spent the last however-many words telling you that there’s basically no situation in which you won’t want to have a year-round relationship with a certified personal accountant. And we stand by that! Almost always, at least.

There are a few exceptions to the rule when you probably can manage things on your own… You might not need an accountant if:

  • Your business is a hobby. If your “business” is really a hobby that brings in a little bit of cash on the side, you probably don’t need an accountant. You still have to keep track of your income and expenses for tax-reporting purposes, though. A simple spreadsheet can suffice for this.
  • You are a freelancer. If you are a freelancer with only a few clients, you can probably wing it without an accountant. As is the case with a hobby business, you do need to keep track of your income and expenses. Don’t rely on 1099s to report your income for the year, and avoid the temptation to “guesstimate” your expenses.<
  • Your tax situation is extremely simple. If your business is a sole proprietorship and your personal tax situation is simple, you might be able to wing it without an accountant, especially if you understand theaccounting formulas and tools at your disposal.  If you decide to go this route, though, make sure to use the best self-employed accounting software.

Now, Go Find a Small Business Accountant

Every small business benefits from working with an accountant, but it’s not always absolutely necessary. Even if you decide to wing it without an accountant, seeking occasional advice is still a good idea. It might cost you a few hundred dollars, but that’s a small investment in light of the impact an accountant can have on your small business.

And if you want to be among the 89% of business owners who see a bump from working with a financial pro, then start your search for an accountant now.

Billie Anne Grigg
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The South African economy slipped into recession during the second quarter of 2018, shrinking by 0,7% quarter-on-quarter (seasonally adjusted and annualised). This followed a revised 2,6% contraction in the first quarter of 2018.

The widely recognised indicator of recession is two (or more) consecutive quarters of negative growth (real GDP quarter-on-quarter). South Africa experienced its last recession during the 2008–2009 global financial crisis with three consecutive quarters of economic decline.

The 0,7% downturn in the second quarter of 2018 was a result of a fall-off in activity in the agriculture, transport, trade, government and manufacturing industries.

Agriculture production fell by 29,2%1 in the second quarter of 2018, following a 33,6% slump in the first quarter. This was largely driven by a decline in the production of field crops and horticultural products. Continued drought conditions in Western Cape and a severe hailstorm in Mpumalanga, resulting in extensive crop damage, also placed additional pressure on production in the second quarter.

The transport industry contracted by 4,9%, largely a result of decreased activity in both land and air transport. Industrial action within the industry, combined with a decline in freight transport, contributed to the slowdown.

The trade industry experienced its second consecutive quarter of negative growth, falling by 1,9%. Subdued sales in both motor and retail trade contributed to the decline. South African household consumption expenditure fell in the second quarter of 2018 compared with the first quarter of 2018, in line with the fall in retail trade sales. Households spent less on products such as transport, food, beverages and clothing.

Government activity decreased by 0,5%, largely as a result of falling employment numbers in the civil service.

Manufacturing was the third industry to record a second consecutive quarter of negative growth, following in the footsteps of agriculture and trade. Manufacturing activity fell by 0,3%, driven by a fall in the production of electrical machinery, transport equipment (including motor vehicles), and products within the furniture and ‘other’ manufacturing division.

Mining, construction, electricity, finance and personal services experienced positive growth, but not enough to lift overall economic growth out of negative territory. Mining’s growth rate of 4,9% was largely spurred on by a rise in the production of platinum group metals, copper and nickel. Construction activity increased by 2,3%, driven by a rise in non-residential buildings and construction work activities.

 

For more information, download the latest GDP report and media presentation here.

1 Unless otherwise stated, growth rates are quarter-on-quarter, seasonally adjusted and annualised, and in real (volume) terms.

Similar articles are available on the Stats SA website and can be accessed here.

For a monthly overview of economic indicators and infographics, catch the latest edition of the Stats Biz newsletter here.

 

Source STATS SA

According to the figures from the Quarterly Employment Statistics (QES) survey, released by Statistics South Africa, the total number of jobs reported in the second quarter showed a decrease of 69 000, bringing the total number of persons employed in the formal non-agricultural sector of South Africa to 9 748 000.

Job losses were reported in the community services industry, with 67 000 jobs shed. These jobs were mainly casual work and were observed in the extra-budgetary account sub-sector that employed staff due to next year’s national election registration drive.

The mining industry continued to shed jobs for the fourth consecutive quarter with 2 000 jobs lost in the second quarter of 2018, while the manufacturing industry lost 13 000 jobs. There was a slight decrease in the transport industry, with 2 000 jobs shed. Moderate gains were reported in the trade and business services industry with the adding of 7 000 jobs each, followed by the construction industry with a slight increase of 1 000 jobs. The job level in the electricity industry remained unchanged in the reference quarter.

Year-on-year, formal sector jobs rose by 13 000 in the second quarter of 2018 compared with the same period of 2017.

There was a decrease of R5 billion in gross earnings from the previous quarter. The total amount of gross earnings paid for the quarter was R627 billion. The decreases in earnings were led by the business services industry with R12 billion. This was followed by the mining industry with R699 million.

Increases in earnings were reported by the community services industry with R3,5 billion. This increase was followed by the transport industry with R2,3 billion; construction industry with R1,1 billion; manufacturing industry with R570 million; trade industry with R307 million; and electricity industry with R94 million.

Average monthly earnings were measured at R20 176 in the formal non-agricultural sector of the economy in May 2018. This is an increase of 1,6% compared with February 2018. A year-on-year increase of 3,7% was reported from R19 444 in May 2017 to R20 176 in May this year.

There was a year-on-year rise in gross earnings by 4,5% from R600 billion in the June 2017 quarter to R627 billion in the June 2018 quarter.

For more information, download the Quarterly Employment Statistics, Q2:2018 report here.

Source STATS SA

Only after you have registered as a taxpayer, you can register on eFiling.

Unsure whether you are registered or not? Ask your employer, or call our SARS Contact Centre on 0800 00 7277 or visit your nearest SARS branch to find out.

Top Tip: SARS won’t provide your tax number to another person, unless the person is your tax practitioner or has Power of Attorney (POA) to conduct your tax affairs.

Click here for help and more information SARS.

 

Source SARS

As life gets busier, people have less time to commute to and from meetings. Luckily, with today’s technology the commute can be eliminated altogether and all you require is an internet connection to speak to your fellow colleagues.

Virtual meetings can be convenient if used correctly and it allows people from all over the globe to take part.

The Journal of Accountancy provides some tips on how to successfully interact in virtual meetings:

Utilise video to foster engagement. By using the webcam and seeing attendees facial expressions, the meeting can be more personal which will make it less likely that someone zones out from the conversation.

Set out an agenda and state the agenda in the beginning of the meeting. By sticking to an agenda you are able to stay on track and maximise the use of everyone’s time.

Use resources such as sharing documents or presenting a few slides. By making it more interactive it will increase the productivity of the meeting.

Make notes as you would in a normal meeting. It is likely that by the end of the meeting you would have forgotten most of what was said. By making notes you are able to review what is expected of you.

Set out some parameters for the meeting and do not allow the discussion to veer into anything that would not be permitted in an office meeting. Loud noises and interruptions should be avoided. The timeline should be strict and people should join the meeting on time as they would in person.

Eliminating painful driving time can make life a lot easier for busy individuals. By using these tips, virtual meetings should be a breeze.

 

Source Accounting Weekly

Accounting apps market grows, but jury is out on effectiveness

The market for accounting apps in Australia has recorded more growth. Some are convinced of efficiency gains, while others believe the market is beyond saturation point.

New research from Xero, released today, shows that businesses that used connected apps grew revenue by 5.5 per cent compared to the 3.6 per cent revenue growth for businesses not using apps in the 2017–18 financial year.

Further, Xero found businesses that used at least one app in 2017–18 increased employment by around 40 per cent more than businesses that did not use apps.

However, the vast amount of apps on the market have divided opinion, with Change Accountants and Advisers managing director Timothy Munro believing that accounting firms will struggle to navigate the heavily populated space.

“From my perspective, they are way too many add-ons and that’s not a criticism of the add-ons,” said Mr Munro.

“Anyone is welcome to come up with a great idea and get out there and sell it but the Xeros and the MYOBs and the Quickbooks out there are trying to push all these add-ons and I think that accountants are thinking, ‘hey I should be getting into these add-ons’ but they are not focusing on the bread and butter which is the compliance.

“There are very few add-ons that small-to-medium accounting firms can adequately help with so we just focus on one or two but there are 600 to 700 out there and there’s no way a small to medium sized accounting firm can understand what they all do, let alone support and recommend them.”

Mr Munro’s comments echo those of KPMG technology lead, Fleur Telford, who earlier told Accountants Dailythat clients were “overwhelmed” by the amount of apps on the market.

“There are just so many apps on the market now, and we are hearing that people are overwhelmed when they’re considering what is right for their business,” she said.

On the flip side, Sequel CFO chief executive, David Boyar believes competition produces positive outcomes for the industry. He notes there was still a large segment of the market that have yet to adopt any apps.

“You still got 30 per cent of Australian businesses still using paper BAS, so there’s still massive opportunity for Australian businesses to grow and to make their businesses more efficient to cut out a lot of the manual clerical work in the business and then use that time to either grow the business, look after their own mental health or do something else,” said Mr Boyar.

“You’re talking about a really pointy end of innovation and there are a lot of people who are going to try and enter that space and I think competition’s great, let them compete because we as the consumer are going to win.”

Getting it right

For Mr Munro, an effective approach in his business is being proficient with a capped number of apps.

“Far too many firms try and implement something for a client where they don’t have good experience in it, they are not going to make any profit on it and the clients are not going to have a good outcome,” he said.

For accountants who don’t have a firm grip on what’s available for them in the market, and then how to use the products, their network of advisers can come into play.

“Sometimes just having a base awareness of the apps that are out there is good enough and you can tell your client to look at a certain product,” said Mr Boyar.

“If you’re an accountant that is not tech savvy and doesn’t want to be tech savvy, the best option is to build a network, build your own community of advisers and find people who you can refer your clients to.”

Future proofing

Late last year, Smithink founder, David Smith, said he’s finding a number of niche products being developed as add-ons to core accounting software aren’t lasting long past start-up phase.

With that in mind, accountants need to be aware of the potential for disruption, particularly where they are using an app that is new to the market or not tied to an established software vendor.

“A lot of these businesses don’t last long. They are little start-ups, they give it a go, they fade away,” Mr Smith told Accountants Daily at the time.

“You don’t want to train your staff and spend all of that effort to get yourself up to speed, and then it may not keep advancing, or people may not invest in it.”

 

Source Accounting Weekly

I came across an article in an accounting magazine about growing your business through referrals, but started falling asleep when the author got into psycho-babble about projecting positive body language. This is the kind of stuff you get in Cosmopolitan magazine: smile often, have an open body posture, make eye contact and pay attention to non-verbal gestures, such as tone of voice.

What the hell is this? Are you trying to get a date?

If that’s how you’re going to win clients, then I think the game is a bust.

This is a subject I know something about. Some years ago I started writing a blog about a particular aspect of the law: how to defend yourself against blood-sucking banks, and all the devious ways their creepy lawyers had invented to side-step the law. I wrote just like this. Aggressive, mocking, outraged, sometimes funny. I quickly figured out which articles people like to read:

  1. Humanise the story: put a real human being at the centre of it, and tell their tale of misery in dealing with the banks, how they were evicted from their homes for falling three months into arrears, or had their car repossessed. Nearly everyone can identify with this, since there is hardly a soul on the planet who hasn’t hit a financial wobble. And, truth is, most people think the banks are a worthy target for abuse (whether right or wrong).
  2. Tell the reader something about the law they don’t know. Here I was guided by the best lawyers in the business. Make the reader feel they can fight back, that they have rights even if they owe the bank money, that that can regain some of the dignity that is stolen once you enter litigation with lenders.
  3. Connect with the reader at an emotional level. Make them angry or make them laugh. This is a call to action. The reader wants to do something, to move from effect to cause. They want to feel part of a like-minded community. They only feel weak when they are alone.

This became my style guide. My inbox flooded with emails. To this day I receive emails from people who trip up on articles I wrote years ago. I don’t give legal advice but I can refer them to a network of people who can.

Getting attention

Here’s the point I am trying to make to you, dear accountants: if you want referrals, never mind about your body language or having to fake a smile. You must have something unique to offer.  You have to capture your share of that mysterious and elusive commodity: attention. You do that by being really attentive to the clients you already have. Shower them with love, and then tell them straight: you are expanding your practice and are on the lookout for new clients. You ask them for referrals. Don’t be shy. You’re the master of business turnaround, or IT, or whatever.

Because you know in your heart of hearts that you are better at your job than anyone else around. If you don’t, you need to cultivate that belief. You know you can solve that guy’s problems and save him money.

Money talks

When you talk like that, you have someone’s attention. Money talks. When you can show someone a way to save money, or make more money, the deal is all but sealed.

While you pay special attention to the clients you already have, you want new ones. That takes a different approach. I wrote about it here. You need to send out professional-looking newsletters, create a blog, update it with content regularly, promote it on social media. That’s not hard to do. But if you push out dry, turgid prose without offering any new insights, you will kill it off in no time. Don’t be shy to hold a strong opinion on something. Like Markus Jooste of Steinhoff did nothing wrong. Every press outlet in the country is beating up on this guy. That’s cowardly. Maybe someone should stand in his corner and offer a different viewpoint. Maybe it’s true, maybe it isn’t, but I don’t enjoy seeing a man being kicked when he is down.

Become an opinion leader

Promote yourself as an opinion leader. Don’t be afraid to be contrarian, but don’t be contrarian for the sake of it. Believe me, you will get noticed.

Put out communications in the form of newsletters and blog posts. Write great headlines, and great ledes (opening sentences): punchy, arresting and devoid of froth. Humanise the story: relate the events of a client that you just helped avoid bankruptcy. Talk about the effect it had on his wife and kids. Get the emotional juices flowing.

Specialise in something

Specialise in something and let people know how great you are at it: like detecting fraud, showing how working capital is squandered, or better budgeting for a more profitable business. There are a hundred ways you can do this.

My accountant has been my friend for decades. He will always be my accountant because he has become a buddy. I refer others to him. I don’t make any money out of this. I do it to help people.

Try this out and thank me later at Christmas with a bottle of Jameson.

 

Source Accounting Weekly

 

In an article by Helena Wasserman featured in Business Insider SA, taxpayers are alerted to the top 18 mistakes one could make on a tax return.

Are you preparing to file your own tax return now that tax filing season is open? SARS is waiting for returns according to Wasserman, and she urges tax filers not to make these common mistakes.

1. Bank account declaration must be true.

Filers who declare that they do not have a bank account in SA could incur a R16,000 administrative penalty if the statement is found to be false. This advice was given by Gratia Snyman of Gautax, a Joburg-based tax and accounting service.

2. Non-declaration of investments.

SARS has its finger on the pulse in respect of investments. Investment houses provide information directly to SARS. If you fail to declare any investment, SARS will penalise you!

3. Not filing a return when you have to.

Marc Seivitz, director of the online tax assistance service TaxTim advises that individuals are under a misconception if they believe they don’t have to file a return if they earn under R350,000.

Seivitz says: “This is incorrect, there are very limited circumstances for when taxpayers do not need [to] file their return. We always advise taxpayers to file anyway just to ensure they are always fully compliant with SARS.”

Also important to note is anyone under 65 who earned more than R75,750 in the past tax year from any source must have a tax number.

4. Pension contributions information.

The information regarding pension contributions should already be reflecting in your IRP5. Don’t make the mistake of duplicating this information.

5. Declare all income.

Sars requires taxpayers to declare all income irrespective of whether it has been taxed by an employer.

6. Avoid numerical errors.

Pinky Ndaba of Durban-based firm Professional Accountants and Tax Consultants says arithmetical mistakes are a big contributor to taxpayers not getting a refund or, conversely, having to pay in large sums of money to SARS.

7. Unnecessary Typos.

Ndaba also advises that incorrect spelling of names when compared to identification documents may result in the system kicking you out and rendering the return incomplete.

8. Keep all records updated.

SARS relies on information obtained from other departments such as Home affairs to verify taxpayer identification information. Make sure you update your records as changes happen.

9. Double check your IRP5.

Make sure your employer has correctly populated your IRP5 before you attempt to file. If there are any errors, the employer will have to correct these and resubmit via EasyFile.

10. Declare rental income.

According to Snyman, property transfer attorneys submit full information to SARS. If you don’t declare rental income, SARS will find you and issue a penalty!

11. Claim your tax-free reimbursement for business travel.

There are specific criteria to be met but taxpayers must remember to claim a reimbursement for tax-free business travel. On the contrary, if you do opt for a travel allowance, ensure your employer provides a letter with an explanation of the calculation of the fringe benefit.

12. Keep proof of medical expenses.

In order to claim a refund for expenses not covered by your medical aid, you will need supporting documents as proof of payment.

13. Married in community of property? Avoid doubling up.

Both spouses need to declare all interest earned, capital gain and losses and rental income for properties. According to Snyman, if you have indicated to SARS you are married in CoP, the system will calculate the split.

14. If you earn a salary, don’t claim fees.

Individuals may not claim professional subscription fees if they earn a salary not mainly derived from commission.

15. Get a Tax-free savings account.

Individuals should not miss the opportunity to save in a tax-free savings account. Invest up to R33,000 per year and pay no tax on interest, dividends and capital gains.

16. Claim in respect of donations.

Individuals may claim up to 10% of their taxable income for donations to public benefit organisations (PBOs). As long as they obtain a valid s18A certificate and a PBO number required for a tax return.

17. Don’t neglect to declare an investment in a venture capital fund.

Joon Chong, tax partner at law firm Webber Wentzel says, “An investment in a Section 12J venture capital fund can be claimed as a deduction.”

18. Avoid spending your tax refund too quickly.

Snyman warns taxpayers not to allocate their refund based on the estimates received from SARS. It would be prudent to wait for a final completion letter first.

 

Source Accounting Weekly

The number crunchers at the DA have tallied up the amount of irregular, fruitless and wasteful expenditure in government departments and state-owned entities (SOEs) and it comes to a staggering R100,9 billion.

Earlier this month the DA put the figure at about R76 billion. But that was before it had sight of the “serial mismanagement” offenders at SAA, SA Express and Denel. As those reports dribbled in, the figure shot to more than R100 billion.

To put that in some kind of perspective, this is equivalent to 6,7% of total revenue budgeted for 2018/19.

An analysis of 2017-18 financial reports submitted to Parliament by government departments and entities has revealed irregular expenditure of R72,6 billion.

One has to sympathise with the Auditor General who has to wade through the thicket of graft and misspent money year after year.

To get a sense of how bad things have gotten, take a look at just one government-owned entity, the Passenger Rail Agency of SA (Prasa). Its latest annual report for 2018 shows:

  • Irregular spending of R24,2 billion
  • Fruitless and wasteful expenditure of R1 billion
  • A net loss for the year of R925 million.

The AG issued Prasa with a qualified audit opinion, due to the large amount of dodgy spending, and the unclear accounting of passenger fares. Despite spending all this money, the entity achieved only 21% of its performance targets.

“Prasa’s results are a slap in the face to all those commuters who queue for hours attempting to catch trains that never arrive. With fuel prices sky-rocketing and 9.6 million unemployed, the neglect of the train system that provides vital links to jobs clearly shows that the ANC does not care about the daily struggles of South Africans,” says DA spokesperson on Access to Jobs, Geordin Hill-Lewis.

“Prasa also joins the list of departments and entities that the AG has expressed serious uncertainty over their ability to remain a going concern. There are now eight entities and one department at risk of financial collapse, in addition to the commercially insolvent SABC,” These are mind-boggling figures that in the private sector would result in mass firings or jail sentences. In the revolving door public sector, this is the result of cadre deployment and a culture of insouciance. When there are no consequences for mismanagement, mismanagement continues.”

Fruitless and wasteful expenditure across all state entities and departments came to R4,1 billion. This is money that could have been saved if reasonable care had been taken. For example, the SABC spent thousands of rands transporting board members to Cape Town for the SABC Board Inquiry‚ but then refused to appear before the inquiry. Easy when it is other people’s money.

This R4,1 billion is enough to fund the salaries of over 22 000 police officers or 21 000 nurses. Or 100 new schools.

The DA says irregular expenditure across all departments and government entities stood at R42,8 billion. The figure for the most recent year is double that of the previous year and does not include all departments and entities as some are yet to table their report. Irregular expenditure occurred when expenditure was not properly managed and was sometimes an indicator of corruption.

Eskom had the largest sum of irregular expenditure of all departments and entities with R19,6 billion‚ followed by Sanral (R10,5 billion)‚ Transnet (R8,1 billion)‚ Department of Water and Sanitation (R6,2 billion) and the SABC (R5 billion).

However‚ this is not the full picture, says the DA. “The Auditor-General also highlighted departments where irregular expenditure was identified that was not included in their reported figures.”

The Department of Police was cited for not including irregular expenditure of R968 million in its financial statements‚ leading to a qualified audit opinion.

The AG certainly has one of the toughest jobs in the country, documenting and investigating spendthrift government entities. We are repeatedly told that efforts have been made to clean up management at Eskom, SAA and other SOEs, yet the results continue to shock and amaze. To loosely paraphrase former UK Prime Minister Margaret Thatcher, we are fast running out of other people’s money.

 

Source Accounting Weekly