Cape Town - The Passenger Rail Agency of SA (Prasa) has continuously failed to prevent irregular, fruitless and wasteful expenditure.
The standing committee on public accounts (Scopa) was briefed by the auditor-general on Prasa’s financial performance for the 2022/23 financial year and a number of governance-related issues, at Parliament yesterday.
Business unit leader responsible for the Prasa audit, Corné Myburgh, said there had been improvement in the financial performance of Prasa, and that this was mainly as a result of management and concerted efforts to ensure the asset register was “fixed”.
“For the first time, I think since 2017, they were in a position to provide us with an asset register that we could actually audit and conclude on, during the 2022/23 year.”
“In the previous year, 2021/22, they’ve only managed to achieve 19% of their indicators. Whereas in the previous financial year, 2022/23, they managed to improve that to a 59% improvement. Yes, there are still concerns in terms of performance and how they go about and specifically the impact on the citizens, but we did see a significant and a marked improvement in what they have achieved.”
An area where no improvement had been noted was in terms of compliance, specifically related to supply chain management, where proper processes were not followed to ensure procurement was fair and equitable.
“And then relating to that, because of the increase in the irregular expenditure, we also note that they didn’t necessarily implement the necessary consequence management.”
The presentation found that, historically, Prasa had not implemented the appropriate consequence management, which resulted in a culture of impunity towards transgressions of laws and regulations. This then resulted in unacceptable levels of irregular, fruitless and wasteful expenditure.
Criminal conduct resulted in material losses amounting to R14.8 million due to a cybersecurity attack and R21.2m embezzled by an employee who was subsequently dismissed.
Instability at the board/executive management level over the years had had a detrimental impact on governance and service delivery.
As at March 31, 2023, 70% (seven out of 10) executive positions were occupied by acting incumbents.
Irregular expenditure incurred during the year increased from R3.3 billion in 2021/22 to R3.8bn in 2022/23.
The main cause of irregular expenditure was due to supply chain management non-compliance.
Fruitless and wasteful expenditure for 2021/22 was previously reported as R274m and restated during the year under review to R302m.
A number of Prasa officials, including senior officials, remained on suspension at year-end, after having been suspended for protracted periods of time.
This had multiple negative impacts on the entity, including overburdening an already stretched staff complement as well as the incurrence of fruitless and wasteful expenditure as employees continue to receive salaries without carrying out their contractual duties.
In this regard, fruitless and wasteful expenditure for the 2022/23 financial year amounted to R36.6m as employees were suspended for a period exceeding six months.
Cape Argus