State Capture hears Nkoni Incorporated, PWC secured irregular tender from SAA

The State Capture Commission has heard that auditors Nkoni Incorporated and PricewaterhouseCoopers (PWC) secured irregular tender worth R69 million at SAA for five years.

PWC Auditor, Pule Mothibe told the Commission that the two auditing firms continued to do business with the national carrier despite not having a legal contract in place.

Between 2012 and 2015 Nkonki and PWC gave South African Airways (SAA) clean audits despite noticing instances of non-compliance.

Commission Chair Deputy Chief Justice Raymond Zondo says it is concerning that PWC continued to work for SAA for five years despite having a one year contract only.

“If PWC’s genuine understanding was that when this letter of appointment said that you are appointed for one financial year, it actually didn’t mean that? Does it mean five years because of all the reasons that you have given?  So, I just have this concern on how do you accept an appointment on a letter that says one year, but based on your understanding, this is for five years, but you don’t point out to say change this letter because you and I know that it’s for five years.”

In the video below, the State Capture Inquiry: 16 July 2020

PWC has taken full responsibility for not reporting governance and compliance failures at SAA in its report as required by the Public Finance Management Act.

The firm’s auditor Pule Mothibe is testifying before the Commission of Inquiry into State Capture in Johannesburg.

Mothibe says he engaged with the airline’s compliance office following the detection of irregular and wasteful expenditure. He has, however, told the commission’s Chair and Deputy Chief Justice Raymond Zondo that they did not escalate the matter.

“While controls were implemented, they did not identify all the issues. We picked up deviations when we performed our work. We informed the audit committee involved with governance, but we did not complete the final step hence the concessions that we have made in that supplementary statement. At that time, I had reviewed the work that had been performed  and it was my view we had done sufficiently,” says Mothibe.

In the video below, the State Capture Inquiry: 16 July 2020