The appointment of a permanent board at Passenger Rail Agency of South Africa (Prasa) is at an advanced stage, Transport Minister Fikile Mbalula has said.
The minister was on Tuesday answering questions in Parliament.
Mbalula said the appointment of a permanent board would go a long way in "restoring stability" at the entity. Prospective board members would undergo an interview process before being appointed.
His remarks come after the Auditor General of South Africa Kimi Makwetu gave the entity a disclaimed audit opinion for the 2018/19 financial year.
A disclaimer of opinion is given when the auditor general is given insufficient evidence to formulate an audit opinion.
In the audit report, Makwetu pined the regression of the entity's audit outcome on instability of executive management and a lack of accountability by senior management to address findings made by the AG over years.
Mbalula told members of Parliament that he had written to the interim board asking why they had failed to comply with their fiduciary obligations with regard to the Public Finance Management Act. He said he would evaluate the board's response before determining the "correct" course of action.
Prasa this year appointed a permanent chief financial officer for the first time since 2014. A group executive for human capital and a group chief procurement officer have also since been appointed. The appointment of a chief executive officer and other executive positions will happen in due course, with the "necessary urgency", Mbalula said.
He added that the priority is to rebuild capacity at Prasa.
The entity has come under scrutiny for not spending its budget allocated for required capital projects. Mbalula gave assurance that once the appropriate executives are appointed, Prasa will have the capacity to spend on capital projects.
The AG had also flagged the issue that there must be consequence management for the appointment of unqualified employees.
The board previously approached the South African Qualifications Authority to conduct a verification process regarding the qualifications of managers. The process, concluded in May 2018, found that of the 864 relevant qualifications, 61% or 524 could be verified while 39% or 337 could not be verified, the minister said.
To address the skills gap, the board has planned an employee verification process, including a qualification and skills audit to be completed by July 2020. Mbalula stressed there would be action taken against "failing management".
"We are strengthening governance control," he said. Prasa also intends to address matters raised by the AG, including corruption – irregular expenditure and irregular awarding of contracts. The AG's report revealed that Prasa's irregular expenditure for 2019 grew by R3.037bn to R27.2bn.
While high courts in both Pretoria and the Western Cape have ordered that Prasa reinstate contracts with private security providers, the entity will be appealing the judgments. Prasa cut ties with the companies concerned because the contracts were irregularly awarded, as revealed in former Public Protector Thuli Madonsela's report Derailed.
During his replies Mbalula emphasised that the AG declared these contracts were irregularly awarded.
Prasa is reconfiguring its approach to security and wants this service to be insourced, in future.