NHC cannot account for R59m in its books

The National Heritage Council (NHC) has failed to provide sufficient evidence to account for R59.4 million in its financial statements, earning it a qualified audit opinion for 2025/26.

The council has also failed to identify any officials who have faced disciplinary action over the audit findings.

In a written response to Africa Daily, Tebogo Shilakwe from NHC confirmed that the Auditor-General of South Africa (AGSA) had questioned prepayment balances and adjustments for errors dating back four years.

"The matter relates to prepayment account balances and prior-period error adjustments amounting to approximately R59,416 million. The prior-period error adjustments relate to transactions spanning a four-year period, necessitating a comprehensive review of historical financial records to establish the accuracy, validity and completeness of the affected balances.

"The audit query arose from the need to substantiate and reconcile the prior-period adjustments relating to these balances. AGSA requested specific supporting information to substantiate the R59,416 million adjustment," Shilakwe said.

The council also admitted that the documentation it submitted did not satisfy the auditors.

"The challenge was therefore not simply the absence of financial records, but the extensive work required to trace the historical transactions across the four-year period, identify the relevant components of the adjustment and ensure that the supporting information directly corresponded with the amount under audit. The NHC acknowledges that the information provided did not sufficiently address the specific audit requirements to the satisfaction of AGSA," Shilakwe said.

The Council blamed the nine days it was given to correct its financial statements for its failure to resolve the issue.

"AGSA afforded the entity a second opportunity to adjust its financial statements in response to the findings identified. The second set of adjusted Annual Financial Statements (AFS) was subsequently submitted on 19 July 2026. However, this opportunity afforded the entity only nine (9) days to account for the entire four-year prior-period population and to identify, isolate and reconcile the R59,416 million from the overall population," she said.

The council has since appointed an external service provider to reconcile the disputed balances.

Africa Daily also asked what consequence management measures had been taken against officials responsible for the financial management failures.

The NHC did not identify any official who had been disciplined. Instead, it pointed to training, capacity-building and increased management oversight.

"As part of its administrative accountability measures, the NHC is strengthening management oversight by requiring relevant managers and responsible officials to account for the audit findings relating to their respective areas of responsibility. Officials are expected to provide explanations for identified shortcomings, implement corrective actions and report on progress within agreed timeframes," Shilakwe said.

She said that disciplinary action would be considered if further reviews established wrongdoing.

"Where the review of identified weaknesses establishes negligence, misconduct or failure to discharge assigned responsibilities, the NHC will consider further appropriate action in accordance with its internal policies, applicable employment frameworks and relevant legislation," she said.

The audit findings extended beyond the council's financial statements.

The AGSA also raised concerns about how the NHC reported its performance, including using evidence from the previous financial year to claim achievements for 2025/26.

"The AGSA raised concerns regarding the use of evidence from the previous financial year to substantiate achievements reported for 2025/26. This included activities relating to G20 participation and World Heritage Site readiness assessments. Management explained that these activities formed part of ongoing intergovernmental processes spanning more than one financial year. The NHC is reviewing the supporting documentation to distinguish prior-year activities from achievements specifically attributable to 2025/26," she said.

Auditors also found discrepancies between the council's actual achievements and what it reported in its annual performance report.

"Findings were raised regarding discrepancies between actual achievements and those reported in the APR, including instances of overachievement without sufficient explanation," she said.

Other problems included performance indicators that differed between planning documents and the annual report, as well as indicators that were not clearly defined.

She attributed some of these weaknesses to "capacity and resource constraints" in its performance management unit.

The council said it submitted an audit action plan to Internal Audit, its Audit and Risk Committee and the Department of Sport, Arts and Culture in October.

It aims to resolve "the majority" of the findings before the AGSA begins testing its 2026/27 records on 16 January 2027.

The AGSA presented its findings to the NCOP Select Committee on Education, Sciences and Creative Industries on 27 October.

It told the committee that the NHC received a qualified opinion because it had failed to provide supporting information for certain transactions and account balances.

The audit comes amid wider governance turmoil at the heritage body.

In October, the NHC confirmed to Africa Daily that its chief executive, Dr Manetsi, had resigned.

"Yes, Dr Manetsi resigned effective 19 September 2026. He indicated ill health as a reason for his resignation and Council appointed Adv Tshepo Maake to act," she said.

The council also confirmed that one of its members had lodged a grievance against chairperson Tau Masemola.

"There has been a grievance lodged by one Council member and it is being processed through the appropriate Council processes," Shilakwe revealed.

A separate whistleblower report concerning the chairperson was also sent to the Minister of Sport, Arts and Culture.

"There was a whistleblower report signed as 'Friends of the NHC' which was sent to the Minister. We are not privy to any other information as DSAC is attending to the matter. The whistleblower was sent to the Deputy Chairperson of Council, the DSAC Minister, Public Protector, Public Service Commission, Speaker of Parliament and Chairperson of the Portfolio Committee," Shilakwe explained.

At the time, the council maintained that no expenditure involving the chairperson had been declared irregular.

"There has not been any expenditure declared as irregular expenditure," she said.