Public Protector nails Post Office financial management

23 February 2016 - 17:42 By Natasha Marrian

Public Protector Thuli Madonsela has found that the South African Post Office’s procurement of its headquarters in Centurion‚ Pretoria‚ was not fair, transparent‚ or cost effective. Public Protector Thuli Madonsela on Tuesday released a damning report into flawed procurement processes at the South African Post Office (Sapo)‚ dating back to 2010‚ adding to the woes of yet another state entity.The Sapo board of directors has been directed to recover the amount of R22 million for rental payments‚ after Madonsela found that the acquisition of a 10-year lease for a building in Centurion to house the Sapo headquarters was “tainted by procurement irregularities and corruption”.She released her report — titled Postponed Delivery — into an investigation of a 2010 contract worth about R161 million entered into by the embattled post office.The Communication Workers Union lodged the complaint in 2011‚ alleging that there was maladministration by the post office in the leasing of the Eco Point Office Park in Centurion to accommodate its head office. The union also alleged that there had been maladministration in the procurement of catering services‚ the procurement and use of labour brokers and a corrupt relationship between service providers and certain employees.According to Madonsela’s findings‚ the process was flawed from the outset — the business case that highlighted the need for new facilities included “misrepresentation of facts and falsified information” regarding the structural defects of its old offices.In violation of the Public Finance Management Act‚ the relocation to the Eco Point office park was not captured in the post office’s strategic plan for that financial year. The board had failed to ensure that a competitive bidding process‚ which “could not be justified”. Madonsela commended the board for acting against officials who were at the centre of the transaction‚ based on a KPMG report. However‚ it failed to expeditiously review the deal.The post office incurred fruitless and wasteful expenditure through renting parts of the office park amounting to R2.37 million per month for a 10-month period‚ Madonsela found.She said that the allegation around the irregular procurement of a catering company was also substantiated‚ but the allegations around the irregular use of labour brokers were unsubstantiated...

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