DA calls for accountability on SAPO financial chaos

25 February 2015

The DA calls on Telecommunications and Postal Services Minister, Siyabonga Cwele, to ensure that accountability prevails for those responsible for the financial chaos at the South African Postal Offices (SAPO), following a parliamentary briefing yesterday revealing that the entity is in a state of terminal decline.

There is an urgent need for financial controls that will address supply chain irregularities, and ensure that previous directors of the South African Postal Offices (SAPO), where appropriate, are held liable under the Companies Act, with stringent action.

Systemic issues such as a lack of automation systems, outdated information systems, labour relations issues and ongoing corruption continue to plague the entity. 

If the government had not intervened in December with a R1,6 billion guarantee, the SAPO would have been given an adverse finding by the Auditor-General. 

That the entity was allowed to continue trading even though it was clearly unable to do so from a cash flow perspective alone is a clear breach of corporate governance. While the DA welcomes the Board's resignation late last year, these directors of the SA Post Office left the entity after driving it into an abyss of financial disaster. They must be held to account for their dereliction of duty. 

Fruitless, wasteful and irregular expenditure accounted for R137 million, and the Chief Financial Officer has been placed on leave while an investigation is underway.

With a posted loss of almost R360 million for the 2013/14 financial year and a projected R1.3 billion for 2015, it is critical that corruption, maladministration and a lack of effective financial control is immediately addressed. 

A report by the Public Protector and several investigations by the SIU also remain outstanding. As a result, it is difficult to ascertain whether the individuals responsible for corruption have been identified and prosecuted, or whether the systems failures that allowed this to occur have been rectified. 

While the DA supports the Administrator, Dr Simo Lushaba, in his work to devise a turnaround plan and oversee its implementation, swift and decisive action must be taken against those responsible for the critical state in which the SAPO finds itself.

Statement issued by Cameron MacKenzie MP, DA Shadow Deputy Minister of Telecommunications and Postal Services, February 25 2015

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