March 17, 2025, Pretoria – Freedom Park acknowledges the recent media coverage concerning its
financial performance (South African heritage site lost R1.5 billion and is hopelessly insolvent, March
10, 2025). The article brilliantly articulates what Freedom Park is and stands for. This is highly
commendable and welcome. However, certain aspects of the reporting require clarification,
particularly regarding the R1.5 billion cumulative deficit and the comparison between revenue
and expenditure.
Clarifying the Reported “Deficit”
The reported R1.5 billion deficit over five financial years (2019/20 – 2023/24) is a
misinterpretation of how public institutions such as Freedom Park are audited by the Auditor General.
This figure does not reflect an actual financial shortfall but rather an accounting treatment in
compliance with Generally Recognized Accounting Practice (GRAP), which the Auditor
General uses.
The following are key considerations:
- Heritage sites like Freedom Park are long-term public investments, requiring a broader
assessment beyond conventional revenue-expenditure models. - The deficit is largely a result of GRAP 13 (Leases), which requires the full recognition oflong-term lease commitments upfront. This is an accounting principle rather than an actual cash expenditure. The Department of Public Works and Infrastructure (DPWI) owns the land on which Freedom Park is located. Thus, whereas this is a government department to public entity arrangement, the lease value must still be reflected. Hence, at face value the lease value may seem as though it is actual money that Freedom Park is liable for.
- Heritage sites like Freedom Park are long-term public investments, requiring a broader
assessment beyond conventional revenue-expenditure models.
Revenue vs. Expenditure – Context Matters
The comparison of 2023/24 revenue (R136.78 million) against expenditure (R394.30 million)
lacks critical financial context:
- Non-cash expenses such as depreciation and lease-related accruals significantly impact the reported figures but do not affect operational cash flow. Thus, there was no real extra funds spent or that had to be carried over to the current financial year. Again, what seems to be extra expenditure is only the calculating-in of depreciation and lease-related accruals.
- Government funding is allocated based on operational needs and approved by the National Treasury and the Department of Sport, Arts, and Culture, ensuring transparency and oversight.
- The maintenance and preservation of heritage sites are cost-intensive but essential investments in safeguarding South Africa’s history.
Commitment to Financial Accountability
Freedom Park remains committed to fiscal responsibility, compliance with the PFMA (Public
Finance Management Act), and transparent financial reporting in accordance with accounting
principles and instruments such as GRAP.
As a national heritage institution, Freedom Park’s impact extends beyond financial figures—it plays
a vital role in preserving South Africa’s history, culture, and identity.
Issued by:
Dr Jane Mufamadi
Chief Executive Officer
For further inquiries, please contact:
Ms. Tebogo Ramutloa | Email: tebogo@freedompark.co.za | Tel: 012 336 414
