Auditors not positive about Post office’s future

2015-01-29 00:00

CAPE TOWN — The Post Office’s current annual report shows it was in the red by over R358 million in the previous financial year and had lost millions through fruitless and wasteful expenditure, losses due to crimes and unlawful expenditure.

The annual report was delivered four months late in Parliament yesterday.

The Post Office expects a loss of R1,3 billion at the end of March. Because of these and other reasons, independent ­auditors are of the opinion the institution may not be a running concern at the end of the current book year.

On the positive side, the Post Office lists more assets than liabilities, with total ­assets at March 31 last year standing at R2,438 billion. This makes the Post Office a solvent institution on paper.

The annual report states the Post ­Office has developed a new business model with the aim to reduce the high fixed cost structures. This will enable the ­organisation to free up R1,5 billion over the next three years.

The amounts in the financial report were compiled before the ongoing strike by contracted post office workers last year, at the end of which the Post Office board also resigned.

Since then Telecommunications and Postal Services Minister Siyabonga Cwele has placed the organisation under ­administration.

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