Prasa berated for wasteful spending
CAPE TOWN — The Passenger Rail Agency of SA (Prasa) incurred R550m in irregular expenditure in the 2014-15 financial year, according to the auditor-general, who criticised management for failing to prevent fruitless spending.
The auditor-general’s report went to Parliament last week.
This year, Prasa has suffered a series of blunders linked to its acquisition of multibillion-rand Spanish-made locomotives that are supposedly not well suited to SA’s rail infrastructure. It has also been investigated by the public protector and auditor-general.
The debacle has claimed the scalps of CEO Lucky Montana and lead engineer Daniel Mtimkulu, who was exposed as a CV cheat. Prasa has roped in the South African Qualifications Authority to verify academic credentials.
Auditor-general Kimi Makwetu’s report said Prasa’s management had flouted the Public Finance Management Act and failed to prevent wasteful expenditure. “Fruitless and wasteful expenditure to the value of R19.9m was incurred due to interest and penalties on late payment of creditor accounts and payments to employees and consultants.
“The accounting authority did not take effective steps to prevent irregular expenditure, as required by the act. Irregular expenditure to the value of R550m was incurred due to noncompliance with laws and regulations and the agency’s supply-chain management policy.”
Prasa chairman Popo Molefe said the board was reviewing the parastatal’s performance targets, as it was displeased with the 201415 performance. He said although the agency had received its ninth consecutive unqualified audit, it faced persistent challenges.
Prasa acting CEO Nkosinathi Khena said underfunding for longdistance passenger rail services had led to losses of R1bn in the rail business.