The SABC is insolvent, Business Day reported on Wednesday. The public broadcaster reportedly tabled its annual report in Parliament on Tuesday showing the auditor-general had given it an adverse opinion. The auditor-general reportedly noted that the SABC was commercially insolvent at the end of March.
The SABC reportedly recorded a loss of R1.1-billion in the 2016/17 financial year, compared with a R593-million loss in the previous year.
The losses were attributed to the controversial 90% local content policy which former chief operating officer Hlaudi Motsoeneng implemented. The plan has since been scrapped. The public broadcaster is reportedly also struggling to collect licence fees.
According to Business Day, the auditor-general, Kimi Makwetu said the SABC did not have adequate internal controls to identify and record irregular expenditure, resulting in the understating of irregular expenditure.
SABC interim board chairperson Khanyisile Kwenyama reportedly told Parliament that the 2016/17 financial year "had all the hallmarks of an institution under enormous financial, political and leadership strain..."
According to Fin24, advertising and sponsorship revenue also dropped, while operational expenses remained the same."The fact that operational cash was used to fund capital expenditure projects, the cost of delivering on broadcaster's public service mandate and the rising cost of sports rights contribute to the pressure being placed on the organisation's cash reserves," according to the auditor-general's report.