SOUTH AFRICAN POST OFFICE IS COMMERCIALLY INSOLVENT, A-G TSAKANI MALULEKE FINDS

AUDITOR-General Tsakani Maluleke has officially declared the SA Post Office to be commercially insolvent. Reports emerged yesterday that Maluleke conferred the struggling post office to a growing list of collapsing parastatals with irregular expenditure of over R200 million, as well as fruitless and wasteful expenditure exceeding R26m. Maluleke allegedly said that there was no evidence that officials behind the irregularities had been held to account. She was said to have been constrained by the post office’s “poor status of the accounting record” and grossly inadequate internal controls with no proper record keeping to ensure that complete, relevant, and accurate information was accessible and available. In January, former chief executive Mark Barnes accused the government of interfering with the institutions’ turnaround strategy, which had led to financial difficulties at the post office. Barnes left Sapo due to a fundamental difference with the government on the future strategy, and direction of the post office, particularly the location of Postbank, which he saw as a crucial solution to some of the post office’s financial woes. The post office has received R8 billion in bailouts from the government but last month it was reported that the post office was temporarily closing 53, or about 3.7 percent of its branches, due to payment disputes with its landlords. Another parastatal, the SA Land Bank, recently defaulted on its debt obligations despite Finance Minister Tito Mboweni committing R7bn in recapitalisation over the mediumterm to help put the bank on a stable and sustainable development path. The post office incurred more than R1.7bn in losses while its liabilities are in excess of its R1.5bn-worth of assets, for the 2019/2020 financial year. |