Auditor-General Tsakani Maluleke has found that the South African Post Office is commercially insolvent.
The Auditor-General says for the financial year 2019 to 2020, the Post Office Group incurred losses of over R1.7 billion while its liabilities exceeded its assets by R1.5 billion.
In the latest Post Office annual report, the Auditor-General gave the group a disclaimer opinion.
This is because she could not obtain enough audit evidence to confirm the reasonableness of management’s assessment of the group’s viability for the foreseeable future.
“I was unable to obtain sufficient appropriate audit evidence due to the poor status of the accounting records,” explains Maluleke.
The Auditor-General has found that management did not implement proper record keeping to ensure that complete, relevant and accurate information is accessible and available to support credible financial and performance reporting.
The group incurred irregular expenditure of over R200 million as well as fruitless and wasteful expenditure exceeding R26 million.
The Auditor-General adds that she could not find any evidence that action had been taken against officials that had caused the company to incur both irregular as well as fruitless and wasteful expenditure.
The group’s internal controls have also been found to be grossly inadequate.
CWU on Post Office increases
In September last year, the Communication Workers Union (CWU) hit out at the management of the Post Office for reneging on an agreement made earlier in 2020.
The CWU says the Post Office had agreed to a 6.5% salary increase in May 2020, backdated to April 2020. It says the agreement further stated some casual workers would be given permanent positions.
But the Post Office said it is financially constrained due to the effects of the COVID-19 pandemic.
CWU calls for resignation of some Post Office board members: