Although the national office of the ANC has struggled with cash flow constraints for the greater part of its term, Gauteng province has delivered a glowing report of its financial records.
Provincial treasurer Parks Tau’s books have been ruled as clean by two audit firms, in a report he delivered to delegates at the Gauteng provincial conference on Sunday morning.
According to the document, SNG Grant Thornton and RSNT Accounting found that the current ANC administration in Gauteng presented solid financial management of the organisation’s financial affairs throughout its term in office. This is likely to be a huge boost to the profile of Tau, who is also the member of the executive council for economic development in Premier David Makhura’s cabinet.
According to SNG Grant Thornton, the financial statement presented a fair financial position of the province and was in line with international reporting standards for small, medium and micro enterprises.
RSNT Accounting, which audited the province’s books for the 2019-2022 period, has also concluded that all material items tested were successfully traced to the financial records. It found that all payments selected in its testing of the financial books were properly authorised and could be traced back to the relevant financial records of the ANC.
Despite the glowing financial reports, the province has struggled with staff salaries, which have swallowed more than 50% of its operational bill. Tau said the ANC in Gauteng had had to reduce its staff complement as it has struggled to meet its obligations in that regard. This left the province with no option but to hand over the salary obligations to Luthuli House, the ANC’s national headquarters.
In August 2021, before South Africa’s local government elections held in November, the ANC had to beg employees who had downed tools following months of delayed salary payments, to return to work. At the time, the party was in danger of missing a deadline to submit its candidate list to the Electoral Commission of South Africa (IEC).
The ANC’s financial crisis was laid bare at a national executive committee meeting in 2021, where treasurer-general Paul Mashatile proposed a 50% staff cut as well as crowdfunding.
The ANC has blamed the Political Party Funding Act — which it ironically championed into existence — as the root cause of its financial troubles and Mashatile was reported to be lobbying other political parties to have it amended.
The law regulates the public and private funding of political parties with the aim of ensuring transparency and trust between the public and parties. It requires all political parties to disclose donations above R100 000 to the electoral commission and also sets restrictions on their sources of funding.
According to the law, political parties may not accept donations above R15-million from a single donor. It also prohibits donations from foreign governments and their agencies, foreign persons and entities, organs of state and state-owned enterprises. Parties are obliged to disclose fully, within three months of the financial year-end, all money received, including funds and membership fees and how those funds were used. The regulations compel the IEC to make political party disclosures available to the public on a quarterly basis.
With less than the required majority to amend the Act in Parliament, the ANC has sought alliances with other political parties, including the Economic Freedom Fighters and the Democratic Alliance, to have it amended.
Times Live previously reported that Mashatile had proposed amending the Act to increase the upper limit on donations to between R50m and R100m a year from a person or entity or alternatively, doing away completely with an annual upper limit for donations to political parties. Mashatile also proposed an increase in the upper limit on donations from foreign entities to not exceed a certain percentage of total party training and policy research budget, TimesLive reported.
In his report, Tau supports this call, recommending that the Act be reviewed as the ANC’s main revenue is derived from the allocations at the legislature. Tau notes that some of its financial difficulty has been because donors are uncertain about the implications of the funding Act relating to disclosure and that some donors have expressed a desire to fund activities in specific regions.