R1.4bn wasted: Sapo’s epic failure

THE SA Post Office (Sapo) has been declared financially “unsustainable” and riddled with systemic mismanagement after receiving its fourth consecutive failed audit opinion from the Auditor-General of South Africa (AGSA), sparking outrage from MPs who demanded answers on why the failing institution keeps consuming public money.

AGSA’s damning report, presented to Parliament’s Standing Committee on Public Accounts (Scopa) on June 11, exposed:

• R152 million lost to fruitless and irregular spending in 2023/24, with R136 million dismissed without repercussions.
• A dismal 13% achievement rate on performance targets, despite a R381m bailout from the Unemployment Insurance Fund (UIF) for staff salaries.
• R86 million paid to business rescue practitioners (BRPs) and advisors since 2023, with little progress to show.
• No stable leadership, severe staff shortages, and repeated violations of the Public Finance Management Act (PFMA).

AGSA officials delivered a stark verdict: Sapo is being propped up by taxpayer funds. “Costs keep outstripping income. Debts are mounting, and the organisation isn’t earning enough to survive,” said AGSA’s Makhai Motshekga. ActionSA’s Alan Beesley was more blunt: “It’s time to pull the plug. Sapo cannot be saved.”

The BRPs, brought in July 2023, have already burned through R86m, including payments to consultants, tax experts, and lawyers. The EFF’s Ntombovuyo Mente-Nkuna demanded answers: “Who are these advisors? What have they actually fixed? We can’t keep throwing money at a sinking ship.”

AGSA’s Nathan Lawnet said the BRPs — from firms SNG and Legae — were “qualified” but admitted survival depends on “new income sources and partnerships,” which still don’t exist.

MPs pressed AGSA on Sapo’s unaccounted-for assets, with Mente-Nkuna noting rural branch closures force grant recipients to travel far. “How many buildings does Sapo still control? Why aren’t they helping our communities?” she asked. AGSA confirmed Sapo owns properties and old equipment, but said almost nothing has been upgraded in years.

Postbank’s separation from Sapo — required by banking laws — has created confusion. Though Postbank is now audited independently, it still depends on Sapo’s failing systems. ANC’s Gijimani Skosana warned: “Postbank once helped fund Sapo. Now, both are drowning.”

Wasteful spending continues unchecked, with R200m squandered since 2021. Mente-Nkuna slammed the impunity: “R136 million just written off? Who checked this? Who was held responsible?” AGSA admitted probes were lacking, blaming write-offs on debt settlements, not internal crackdowns.

Scopa Chairperson Songezo Zibi criticised the BRP system, calling it “one of South Africa’s most profitable sectors.” He mocked Sapo’s reliance on dying mail services: “When did you last post a letter? The model is obsolete.”

AGSA demanded immediate action, including:

• Appointing permanent executives.
• Enforcing strict accountability.
• A high-level discussion with the Communications Minister and the Treasury.

With Sapo’s debts ballooning and public anger growing, MPs pledged to haul in the Minister and BRPs for answers. As ANC’s Ntando Maduna said: “Taxpayers are bankrolling failure. This stops now.”