Cape Town - The beleaguered SA Post Office (Sapo) racked up a net loss of R2.2 billion and a liability position of R6.5bn in the 2021/22 financial year, Auditor-General (AG) Tsakani Maluleke’s office told MPs on Wednesday.
The net loss finding is attributed to the state-owned company not disclosing all its indicators of “material uncertainty” in financial statements, the AG said.
“Material uncertainty” is accounting-speak to refer to conditions that could cast serious doubt on an entity’s ability to address issues raised by the AG and is an indication that Sapo may not be able to properly realise or manage its assets.
The AG recommended that management prepared accurate financial statements. The AG found that Sapo’s financial health remained a serious concern, that planned strategies weren’t enough to turn the Post Office’s fortunes around in the next year, and that at the root of this was instability on Sapo’s board.
Furthermore, the turnaround plan is still at “conception level”, the AG said, and government funding would mitigate the situation.
The AG’s report was tabled against the backdrop of Finance Minister Enoch Godongwana snubbing the Post Office for a bailout, to the chagrin of unions.
AG business unit leader Andries Sekgetho appeared before the standing committee on public accounts (Scopa) to present the audit outcomes for Transnet, the SABC, Sapo, Postbank and the Passenger Rail Agency of SA.
AG senior manager Joyce Nkonyana said Sapo, littered with resignations in its finance department, had repeat disclaimer findings on issues that were not dealt with by officials – from 2019/20, 2020/21 and 2021/22.
She urged Scopa to call the accounting officer to account before the committee.
ANC MP Bheki Hadebe said: “The report paints a picture of an entity with significant financial losses and no sustainable income, an entity that has severe financial distress.”
DA MP Alfred Lees asked whether there was a possibility of Sapo being forced into liquidation for non-payment. Sekgetho said: “The R2.2bn is not just the losses suffered as a result of criminal conduct. The overarching principle is that the institution is not making a profit.”
Meanwhile, AG senior manager Surette Taljaard said the SABC potentially had a R1.5bn bill of irregular expenditure and would have to trigger a process of consequences against officials.
The Treasury’s guidelines stipulate that the consequence management process had to be concluded within three months of irregular expenditure being registered, but this had not been done, the AG said.
The broadcaster also incurred R3.3 million in fruitless and wasteful expenditure, a result of interest in late payments and the R1.5m rental of unoccupied space, a contract that ended in October 2022, and an impairment of content amounting to R5.5m.
The AG reported that of the SABC’s R3.2bn bailout of 2019, there was R917m left as at March 2022, with some funds having been spent on boosting local content creation.
As with the previous financial year, the SABC remained on the qualified audit due to irregular expenditure.
AG officials said despite the SABC incurring losses, it still had sufficient assets and cash at hand to meet short-term liabilities.