AG Report exposes Communication Department’s self-inflicted deterioration

Issued by Natasha Mazzone MP – DA Shadow Minister of Communications and Digital Technologies
16 Oct 2023 in News

Note to editors: Please find attached soundbite by Natasha Mazzone MP

The Office of the Auditor General recently presented its findings to the Portfolio Committee on Communications & Digital Technologies (DCDT) and laid bare a very bleak picture.

As previously revealed, the SABC reported a financial loss of R1.1 billion for 2022/23, having not turned a profit since 2012. It again obtained a disclaimer audit opinion. Also of concern, the SABC has since 2018 remained technically insolvent and unable to pay its bills on time. While the standard payment period is 30 days, the SABC paid its bills on average 115 days after they become due. This speaks to the immense cash flow constraints the Public Broadcaster faces”. As the DA sought to sound the alarm, the SABC once again finds itself in bail-out territory.

The SABC, however, is the tip of the iceberg in a failing DCDT department. The South African Post Office (SAPO), which is currently under business rescue, reported irregular expenditure of R156 million and wasteful expenditure of R153 million. It lost R138 million to fraud and reported a net loss of R2.2 billion! SAPO was bailed out again in the 2023/24 National Budget to the sum of R2.4 billion and looks to receive R3.8 billion more in the Medium-Term Budget Policy Statement in November. While SAPO will receive R6.2 billion of taxpayer funds this year, around 7 000 workers will still be retrenched.

The situation is no better at the South African Postbank, which Government seeks to turn into a State Bank. It also obtained a disclaimer audit opinion, accumulating more than R2 billion in financial losses. Its finances were also deteriorated by SAPO, which owes the Postbank more than R3 billion. The AG also flagged the Postbank’s IT vulnerabilities, which were the cause of September’s SASSA-grant “glitch”.

The Postbank’s security has been an issue for several years and saw the Reserve Bank in 2021 threaten to remove Postbank from the national payment system. In response to a DA Parliamentary Question in September, Minister Mondli Gungubele sought to reassure that the issue had been resolved, which of course was not the case. The DA has been unequivocal in its rejection of a State Bank, and the AG’s report once again demonstrates why.

In the interest of transparency and accountability the DA calls for regular progress reports for the Portfolio Committee to monitor whether entities are achieving desired outcomes, recovering potential funds, and curbing financial losses to address the identified material irregularities.

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