Eskom's exemption from reporting irregular, wasteful and fruitless expenditure and criminal conduct losses set off alarms, amid persistent scepticism over government pledges on ending rolling blackouts. Badly timed, it followed the electricity minister's PR tour of power stations -- and the further deterioration of a bleak electricity outlook.

Eskom is exempted from reporting irregular, wasteful and fruitless expenditure, and losses from criminal conduct, until 31 March 2025, according to Finance Minister Enoch Godongwana's Government Gazette notice dated 31 March 2023.

It was the response to Eskom board chairperson Mpho Makwana's request in a letter dated 9 March which shows awareness of the impact on auditing and financial accountability of the troubled power utility whose R400-billion debt is SA's biggest risk.

"Those particulars will no longer be subject to a full statutory audit by the Auditor-General South Africa. As such, the threat of a qualified audit for reasons relating to PFMA [Public Finance Management Act] non-compliance will be alleviated. This will provide relief to Eskom in circumstances where its financial position is constrained and the cost of borrowing is a major concern in its financial recovery efforts."

Irregular, wasteful and fruitless expenditure is incurred by non-compliance with rules and regulations on procurement and spending, and penalties are incurred for such. These categories provide important insights into institutional health, and the Auditor-General considers these in making audit findings.

But that's changing, as the National Treasury on Monday evening said Eskom's exemption was a new approach as it and the Auditor-General...