South Africa: NW SCOPA calls for NTI turnaround strategy

The North West legislature has called on the provincial Transport Department to urgently provide a turnaround strategy for the beleaguered Northwest Transport Investment (PTY) Ltd.

The Standing Committee on Provincial Public Accounts (SCOPA) made the call during a virtual Public Finance Management Act public hearing with the department and the provincial entity.

Department administrator Mathabatha Mokonyama, who was also seconded as Acting Chief Executive Officer at the entity, did not submit annual financial statements for the 2018/19 and 2019/20 financial years.

“The department sought the assistance of the Office of the Accountant General from Provincial Treasury, who assisted only for the provisional liquidators, who by then had assumed the role of the board, to refuse to sign the statements off, citing further investigations. 

“Post liquidation, two meetings were held with the Office of the Accountant General, one of which had the AGSA [Auditor-General SA] participating, wherein it was agreed that the former will assist to finalise the 2018/19 annual financial statements and advise on the way forward in relation to 2019/20 and 2020/21.

"A process to repatriate the annual financial statements back to GRAAP [generally recognised accounting practices] has started,” said Mokonyama.

He said the gap between revenue and expenditure, as well as assets and liabilities, continues to grow bigger at the struggling provincial transport entity. 

“As at 31 July 2020, North West Transport Investment (PTY) Ltd spent R246.8 million against the total actual revenue of R177.5 million, indicating revenue shortfall of R69.3 million.

“The one creditor, J and J Automotive, had commenced with the liquidation process for being owed R19 467 584.58, plus interest, at the North Gauteng High Court and the matter, if not resolved will be heard on 9 October 2020. Seven more creditors, including the AGSA, have issued letters of demand for moneys owed,” Mokonyama said.

The Provincial Public Accounts Committee said third  party payments to bodies like SARS, Pension Fund (Old Mutual) and medical aid managers were also not paid in the period leading to the provisional liquidation due to financial mismanagement, which included high bus rentals, under collection of revenue, aging fleet (resulting in fewer buses available for operations).

“EXCO, seating as shareholders resolved that SARS and the Pension Fund be paid by the provincial government,” Mokonyama said.

An estimated R60 million, said Mokonyama, could be generated from the disposal of these non-core assets at no cost to the NTI for those invited to manage the disposal.

SCOPA chairperson Job Dliso said although the entity had challenges of liquation due to none payment of creditors, a turnaround strategy would assist it to benefit the communities in the North West province and enhance service delivery.

“We need a concrete plan that demonstrates the department is determined to revive the provincial entity. We cannot continue to put money on an entity that is not generating any income, hence we need a turnaround plan and there must be value for money.

“SCOPA is worried about lack of evaluation and monitoring, and the failure of the personnel at the entity to do their work on reviving it. We need to be provided with the remuneration policy of senior management and the salary bill of the entity.

"There is lack of internal control, non-compliance on supply chain management policies and regulations. The entity does not have critical senior management personnel, as the CFO and CEO left the entity in a dire situation to operate effectively,” said Dliso.

He said the Provincial Public Accounts demands the entity to submit a list of all creditors with amounts owed, with a clear plan on how to pay off those creditors.

“They must also submit a list of service providers with the starting and ending period, and cost pre- and post-liquidation. We need a litigation report, and all forensic investigation reports and a plan to implement its recommendations,” said Dliso.

He said the Committee needs a list of disciplinary cases on supply chain management transgressions and officials implicated, and how to implement consequence management. – SAnews.gov.za



This story has been published on: 2020-09-16. To contact the author, please use the contact details within the article.



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