MPs blast Post Office leadership

The South African Post Office and Postbank leadership made a presentation to parliament this week in which they described institutions in disarray and losing money. MPs excoriated them.

Democratic Alliance MP Natasha Mazzone told Post Office leadership that the auditor-general’s report on the entity was one of the worst she has seen.

Mazzone was addressing a meeting of the portfolio committee on communications & digital technologies on Wednesday.

Post Office and Postbank representatives presented their 2022/2023 annual and financial reports at the meeting.

The auditor-general’s report on the Post Office raised concerns about its assets, its ability to pay debts, lack of support for social grant transactions, accounting inefficiencies, supply chain management and more.

Post Office CEO Nomkhita Mona attributed the downfall of the company, which hasn’t made a profit since 2006, to several factors.

These included payment of social relief of distress grants which caused “untold damage to the business”, Covid, the separation of Postbank and robberies.

She said since 2021, 488 employees had been dismissed, with 203 of those dismissals related to fraud or theft; 188 of those dismissals occurred this financial year, she said.

R2.2-billion loss

The Post Office had a total loss of R2.2-billion in the latest financial year, she said. Mona said the organisation had a turnaround strategy, but Mazzone was sceptical. Mazzone said she is regularly phoned by workers who are stranded because they visit a post office to collect money and it is closed or has run out of cash.

The Post Office is under business rescue. ANC MP Lesiba Molala questioned why the committee could not hear from the business rescue practitioners on progress. “The South African public wants to know,” he said.

Department of communications deputy director Omega Shelembe responded that the business rescue plan report is expected in November.

Postbank

In Postbank’s report, CEO Nikki Mbengashe said the bank has a performance rating of 21% for achieving its goals of:

• Becoming a retail and business bank;
• Financial sustainability;
• Enhancing organisational productivity; and
• Increasing accountability.

“I don’t see a clear way forward. What I see is yet another failed entity,” Mazzone said about this failure to meet goals. “This has a financial impact that could dramatically affect the lives of the most vulnerable South Africans.”

Mbengashe also told the committee that Postbank currently has 10 million active customers, although it is losing them. It is not currently allowed to take on new customers due to a variation notice. (This is a notice issued by the Reserve Bank to Postbank indicating irregularities.)

She added that Postbank loses more than R35-million/month because of the Post Office/Sassa contract that was ceded to Postbank in October 2022. “If this operating model is corrected, this could change,” she said.

Molala presented concerns about the Postbank’s disciplinary numbers. Mbengashe reported Postbank has dismissed five employees, held six disciplinary processes and suspended two employees. Four employees have voluntarily resigned.

But Molala said Postbank presentations since 2021 had indicated about R86-million lost in fraud. He questioned how only five employees had been implicated.

Mbengashe responded that investigations are continuing.

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