Management collapse to blame for Post Office losses

Sapo leadership face an angry Scopa. (Duncan Alfreds, Fin24)
Sapo leadership face an angry Scopa. (Duncan Alfreds, Fin24)

Cape Town – The Parliamentary Standing Committee on Public Accounts (Scopa) has blamed a management collapse for losses at the South African Post Office (Sapo).

Post Office chair Dr Simosezwe Lushaba faced an angry Scopa on Tuesday, having to account for losses at the state-owned entity which climbed to R1.4bn.

Some of the loss has been blamed on a four-month strike at mail sorting centres, but committee members rejected this.

“In the organogram, who was striking? Was internal audit at the time and intact? Why did management not do what they were supposed to do?” Mkhuleko Hlengwa fired at Lushaba.

“The Post Office had several strikes in 2014; my understanding is that it had four strikes. I arrived as the administrator at the last strike - it was the workers at the mail centres, sorting centres at the Post Office that were on strike,” Lushaba responded.

“Chairperson, my understanding is yes, it was intact. When I joined on the 7 November it was intact. I never got any information that prior to that there were any disturbances in internal audit,” he added.


READ: Post Office grilled at Parliament hearing

Hlengwa highlighted that no-one in senior management was on strike, indicating there was no acceptable reason for the delays in submitting financial statements on time.

“We need to call a spade a spade and a shovel a shovel. There was a collapse,” he said.

“When I joined Sapo on the 7 November, the management systems had collapsed. In effect, there wasn’t adequate management of the organisation,” Lushaba conceded.

He added that senior management positions were not filled, resulting in a lack of accountability for finances at Sapo.

“Management systems at Sapo had collapsed and the performance reports come from management and that limits the ability of internal audit if management does not provide them with the necessary reports on time,” a visibly stressed Lushaba said.

Hlengwa insisted that management collapse and the failure to account for an Asset register at the organisation was a more important factor in the losses than striking workers.

“The people who’re supposed to do that, they are not on strike. They’re at work. What are they doing? Are they peering out of the window checking who’s striking and not doing what they’re supposed to be doing?

“We must entrench accountability as a norm, and consequences as part of that norm,” Hlengwa said.

Government rescue

READ: Post Office boss vows to reign in reckless spending

“Chair I agree with the honourable Hlengwa, the points he is making are correct. The assets and liability committee - Alco - was no longer meeting at Sapo. Those are some of the charges that we preferred to the CFO.

“There is no asset management. We don’t even have a warm body that is responsible for asset management under the CFO,” said Lushaba.

Government has allocated R650m to Sapo as well as a state guarantee of R2.7bn for the organisation to recapitalise itself and return to profit by 2018, as promised by new chief executive Mark Barnes.

Sapo owes its landlords about R80m and Lushaba said that money would be used to get the organisation back on its feet.

“We are still in the process of raising funding so that we can plug the holes in as far as the capacity and resources are concerned,” he said.

- Follow Duncan on Twitter

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