An unqualified audit and a clean audit are not the same thing, and the gap between them is where Airports Company South Africa spent part of its year. The company that runs OR Tambo, Cape Town International and King Shaka published its annual report on Wednesday. The Auditor-General accepted that the financial statements are fairly presented. How some of the money was spent is the part it would not sign off.
Irregular expenditure is the term for that, and it is narrower than it sounds. It does not mean money was stolen, or that anything was bought at the wrong price. It means the rules governing how a state-owned company must buy things were not followed, and once a rand lands in that column it stays there, reported again in every set of results, until the entity resolves it or writes it off.
Why the number keeps climbing
ACSA's total reached R400.3 million for the year to March, up from R333.1 million. Only R146.6 million of that was newly incurred, a little over a third; the rest is older spending still working its way through. The Auditor-General singled out a contract for explosive trace detectors bought three years ago through an emergency process instead of the normal one, and its diagnosis of the cause was flat: management did not put adequate preventative measures in place over procurement and contract management.
ACSA has appointed a chief procurement officer to work through the backlog and the new cases, reporting to the audit and risk committee of the board. It also disputes the reading that irregular expenditure amounts to corruption.
The company underneath the finding
This is what makes R400 million awkward rather than routine. ACSA does not queue for bailouts. It made R1.2 billion after tax for a third year running, and it paid company tax of close to R800 million rather than drawing anything down.
The airports themselves are near full recovery. Revenue rose 11.6%, to R8.81 billion, helped by a tariff increase and more people flying. Departing passengers reached 20.58 million, about 98% of the pre-Covid level, with international and regional traffic already past it.
That money is going somewhere. Borrowings came down over the year and the cash pile went up, and ACSA is now in talks with the airlines and the regulating committee to lift its capital programme from R21 billion to R37 billion by March 2031, with R15 billion of it in the first three years, on runways, jet fuel pipelines and faster security scanning. The procurement rules that produced this year's finding are the rules that money will be spent under.
