Correspondence from auditing regulator confirms Council inaccurately represented both the status of its investigations and the scope of its mandate
The Independent Regulatory Board for Auditors (IRBA) has directly contradicted a claim by the National Bargaining Council for the Road Freight and Logistics Industry (NBCRFLI) that IRBA investigations had cleared the Council’s financial affairs, undermining the credibility of its response to concerns over billions of rand in workers’ benefit funds.
ISS recently raised serious questions over the Council’s financial reports, including concerns about the potentially problematic accounting treatment of R2.59 billion in workers’ benefits, and whether its published financial statements provide sufficient transparency over how those funds are accounted for and administered. In response to these issues, the Council has defended itself by repeatedly relying on the public assertion that the matter had effectively been cleared by IRBA.
In its recent statement, the NBCRFLI noted: “ISS failed to mention that it reported the same allegations to the Independent Regulatory Board for Auditors (IRBA), after IRBA investigations found no wrongdoing insofar as the Council’s financials are concerned.”
This claim that prompted ISS’s legal representatives to approach IRBA directly and ask the regulator to confirm whether the Council’s characterisation was accurate.
IRBA’s response was unequivocal. The regulator said that the Council’s statement is “inaccurate”, and the relevant matters remain at different stages of its investigative and disciplinary processes. Certain aspects of the process are still under consideration and have not yet been finalised.
Significantly, IRBA further stressed that it does not investigate the financial statements of entities. Its mandate concerns the audit work performed by registered auditors and whether that work complied with applicable auditing and ethical standards.
According to IRBA, the Council’s statement therefore “does not correctly reflect either the status of the relevant matters or the scope of the IRBA’s investigative mandate.” The regulator further indicated that it would correspond directly with the NBCRFLI regarding the issue and the statement contained in its media release.
ISS Managing Director Arnoux Maré says the IRBA correction strikes at the heart of the Council’s attempt to dismiss the concerns raised.
“In a desperate attempt to dispute our analysis and questions, the Council resorted to invoking the authority of an independent regulator, telling workers, employers, the media, and the public that IRBA had investigated these matters and found no wrongdoing. This was blatantly false, and if the Bargaining Council can misrepresent something as fundamental as the findings of an independent regulator, then stakeholders should ask what else it may be misrepresenting.
“Every other assurance it has provided must now be scrutinised, because it is clear that stakeholders cannot rely on the explanations being given to them.”
Maré further emphasises that the responsibility for the Council’s financial reporting rests with the Council itself, and cannot simply be transferred to its auditors.
“An external audit does not transfer responsibility for the accuracy of financial statements or disclosures from management to the auditor. The Council is still responsible for explaining how workers’ money is accounted for and answering the substantive questions raised by its own published financial statements.”
He notes that ISS has also received complaints from drivers and other workers who say they are struggling to access benefits they believe are due to them, including leave pay.
“That makes transparency around these funds even more important, because behind every line item is a worker waiting for money they believe is owed to them to cover ordinary household expenses, school fees, or other costs. These issues have a direct impact on people’s lives.
“The Council needs to start putting the facts on the table. If it is confident in its financial position, it should have no difficulty publishing by early next week a clear, fund-by-fund account that shows exactly what each fund holds, what it owes, whether it is fully funded, and whether it can meet every obligation to workers,” he concludes.
