- Auditor General raises concerns over continued losses despite improved revenue
BY MBONO MDLULI
MBABANE – The Sincephetelo Motor Vehicle Accident (MVA) Fund has been urged to accelerate the implementation of its turnaround strategy after the Auditor General raised concerns over the institution’s continued operating deficits despite recording revenue growth during the 2024 financial year.
The concerns emerged during deliberations by Parliament’s Public Accounts Committee (PAC), where the Auditor General highlighted the Fund’s unfavourable financial performance and questioned its long-term sustainability if corrective measures are not urgently implemented.
According to the Auditor General’s findings, the MVA Fund Group reported a deficit of E35.4 million for the financial year ended March 31, 2024, compared to a deficit of E96.8 million recorded in the previous financial year.
While the figures indicate a significant reduction in losses, the Auditor General noted that the institution continues to operate at a deficit, raising concerns about its future financial stability.
The Fund’s separate financial statements also reflected a deficit of E26.5 million, an improvement from E88.1 million reported in the previous year.
Operating Costs Outpacing Revenue Growth
The Auditor General attributed the continued losses primarily to a sharp increase in operating expenses.
According to the report, operating costs increased by approximately 24 percent, rising from E124.3 million in the 2023 financial year to E154.5 million in 2024.
Although revenue also increased substantially by approximately 24 percent, growing from E169 million to E211 million, the increase was not sufficient to completely offset the rising expenditure and eliminate the deficit.
The Auditor General noted that the persistent operating losses raise concerns regarding the Fund’s ability to sustain its operations over the long term if effective interventions are not implemented.
Turnaround Measures under Scrutiny
During the committee proceedings, concerns were raised regarding the Fund’s going concern status and the effectiveness of proposed measures aimed at improving its financial position.
The Auditor General advised management to provide an update on turnaround strategies intended to generate additional revenue streams while simultaneously reducing operational costs.
The objective of the proposed interventions is to stabilise the Fund’s financial performance and strengthen its sustainability.
However, the Auditor General indicated that the response submitted by the Controlling Officer was not entirely satisfactory.
According to the Auditor General, the strategies presented were largely proposals that had not yet been fully implemented at the time of the review.
“The proposed strategies are noted, however they remain plans at this stage and their effectiveness cannot yet be assessed until implementation takes place,” the Auditor General observed.
Call for Action
Members of the Public Accounts Committee emphasised the importance of moving beyond planning and ensuring that corrective measures are implemented without delay.
They noted that while the reduction in the annual deficit is encouraging, sustained improvements will depend on the Fund’s ability to contain costs, increase efficiency and diversify its revenue base.
The Committee is expected to continue monitoring the Fund’s performance and implementation of the proposed turnaround strategy.
Financial analysts note that the reduction in losses from the previous financial year demonstrates progress, but stress that long-term sustainability will require disciplined financial management and successful execution of cost-saving and revenue-enhancing initiatives.
The Auditor General has urged management to provide clear evidence of implementation and measurable results in future reporting periods as part of efforts to restore the Fund’s financial health and strengthen public confidence in the institution.
In response, MVA CEO Khangeziwe Mabuza pleaded with the PAC to be patient with them, as they had already come up with a turnaround strategy, which was yet to submit the strategy to Cabinet for adoption, subject to the approval of the board. She assured the MPs that retrenchment was not one of the ways to turn around the company, but she mentioned that the strategy would be shared after
